Wärtsilä, CSIC and MHI in Joint Venture

Wärtsilä, China Shipbuilding Industry Corporation (CSIC) and Mitsubishi Heavy Industries (MHI) are establishing a joint venture to manufacture large, low-speed marine engines in China. CSIC will hold 50% of the joint venture, Wärtsilä 27% and Mitsubishi 23%. The investment will total around 75 million euros, spread over several years. Production is scheduled to start during the fourth quarter of 2008. The joint venture will be called Qingdao Qiyao Wärtsilä MHI Linshan Marine Diesel Co Ltd (QMD). The start-up of the joint venture is subject to final approvals, which are expected to be received by the end of October 2006. Central to Wärtsilä's growth strategy

Strong demand in China The Chinese shipbuilding industry is growing rapidly and currently requires more engines than can be manufactured locally. As China has set itself the target of being the world's leading shipbuilding country by 2020, demand for low-speed engines is increasing correspondingly. QMD will primarily serve Chinese shipyards, it will also be able to export engines to other shipbuilding markets such as Europe and India. Co-operation continues The QMD joint venture continues the co-operation started by Wärtsilä and CSIC in 2005 to produce auxiliary engines. With MHI Wärtsilä is co-operating in the form of a strategic alliance to develop two-stroke marine diesel engines. Two-stroke engines with Wärtsilä and MHI licences The QMD factory will produce large marine engines for Chinese shipyards. It will develop, manufacture and sell a new generation of energy-saving and environmentally-friendly low-speed two-stroke marine engines under licence from Wärtsilä and MHI. The factory will be built in the Shanghai area, where CSIC is setting up a marine industry cluster.

Local supplier network The QMD factory will use local suppliers as much as possible. It will thus do much to add both to the local economy while channelling the transfer of technology that will support local companies in raising and maintaining their production to world-class standards. The technological importance of QMD factory will also be enhanced through its use by Wärtsilä and MHI for the research and development testing of new engines, further emphasizing its technological importance.