Wärtsilä and China State Shipbuilding Corporation (CSSC) have signed an agreement to establish a joint venture for manufacturing medium and large bore medium speed diesel and dual-fuel engines. The CSSC Wärtsilä Engine (Shanghai) Co. Ltd factory will be located at Lingang, Shanghai and is expected to have its first engine ready for delivery by the end of 2015. The company will in particular target the growing offshore and LNG markets, as well as the market for very large container vessels. The Wärtsilä share of the joint venture is 49 per cent and the size of Wärtsilä’s equity investment is approximately EUR 12 million (USD 16.2 million).
The new joint venture company, CSSC Wärtsilä Engine (Shanghai) Co. Ltd, together with two other already existing Wärtsilä joint ventures for medium speed engine production, will now be able to offer the most complete portfolio of Wärtsilä branded medium speed engines in China. According to the press report, it will also be the first China-based company able to manufacture locally large bore medium speed diesel and dual-fuel engines, with the benefits of faster delivery times and competitive pricing.
When in full production, the company will manufacture Wärtsilä 34DF and Wärtsilä 46DF dual-fuel engines as well as conventional marine engines. With LNG becoming increasingly popular as a marine fuel and dual-fuel capability being of increasing importance for both economic and environmental reasons, Wärtsilä’s dual-fuel offering is a major consideration for Chinese yards.
“This agreement marks an historic moment for our two companies, and it opens the door to exciting new opportunities. China is today the largest shipbuilding nation on earth, and CSSC is the largest shipbuilding company in China. Wärtsilä offers the marine industry’s broadest scope of products, solutions and services, and through this joint venture our two companies can deliver leading edge engine technology that can improve efficiencies and lower operating costs for owners and operators everywhere,” says Jaakko Eskola, Senior Executive Vice President & President, Ship Power, Wärtsilä Corporation.
“This investment demonstrates Wärtsilä’s commitment to supply competitive engine products to its customers in China. Furthermore, it is fully aligned with the central government of China’s 12th Five-Year Plan to significantly increase environmental efficiency and the locally produced content of marine equipment,” adds James Han, President of Wärtsilä China.
“It is a great honour to sign this joint venture agreement with Wärtsilä. Wärtsilä is the leading innovator and the technology leader in developing economic and environmentally sustainable solutions. We look forward to a bright future together,” says Wu Qiang, Vice President, CSSC.
CSSC is one of the largest shipbuilding groups in the world, with ten yards in China accounting for approximately 25 per cent of the country’s newbuild capacity.