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Joint Venture for Major Engine Factory In China

Posted on September 27, 2006

China Shipbuilding Industry Corporation (CSIC), Wärtsilä Corporation of Finland and Mitsubishi Heavy Industries Ltd (MHI) of Japan are preparing for the building of a joint-venture factory in China for the manufacture of large low-speed marine diesel engines. The joint-venture agreement is being signed by Qingdao Qiyao Linshan Power Development Co Ltd (QQLPDC) and Panda Shinco Holding BV (PSH). The joint venture is subject to final official approvals which are expected to be received at the end of October 2006. QQLPDC is jointly owned by Yichang Marine Diesel Plant (YMD) and Shanghai Marine Diesel Engine Research Institute (SMDERI), both being underlying units of CSIC. PSH is jointly owned by Wärtsilä and MHI. Under the terms of this agreement, QQLPDC and PSH will establish the company Qingdao Qiyao Wärtsilä MHI Linshan Marine Diesel Co Ltd (QMD) in China. QMD will be dedicated to the research and development testing, prototype manufacture, production and sale of large low-speed two-stroke marine diesel engines.

The QMD factory will be located in Qingdao, Shandong province, close to the Beihei shipyard in the Haixiwan shipbuilding area where CSIC is establishing a marine industry cluster. The QMD factory is planned to start production in the fourth quarter 2008. QMD will be dedicated to the research, development, prototype manufacture, production and sale of a new generation of energy-saving and environmentally-friendly low-speed diesel engines using the advanced technology of Wärtsilä and MHI. QMD will also be dedicated to the manufacture, assembly, testing, sale and maintenance of low-speed two-stroke marine diesel engines under licence from Wärtsilä and MHI.

QMD will concentrate on engines of 500 mm cylinder bore and larger while YMD will continue manufacturing engines of smaller bore sizes. Thus QMD will be capable of building the full range of large marine engines, today extending up to 960 mm bore. Initially the factory will have a capacity to build engines of about 880 MW/year (1.2 million bhp/year) with planned development to increase capacity to about 2600 MW/year (3.5 million bhp/year).

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