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January 11, 2006

Wartsila signs Brazilian license agreement

Wartsila has signed an engine license manufacturing agreement with NUCLEP (Nuclebras Equipamentos Pesados S.A.) in Brazil.

The agreement grants Nuclep the right to manufacture certain types of Wartsila's most modern electronically controlled common rail two-stroke marine diesel engines between 50 and 68 cm bore size at its premises in Itaguai with a targeted annual output of six to ten engines. The first delivery of a Wartsila engine is scheduled for beginning of 2008.

"This agreement will create new opportunities for us in the growing Brazilian shipbuilding market. We are looking forward to cooperating with Nuclep," says Ole Johansson, President and CEO of Wartsila Corporation.

"Since marine engines have not been manufactured in Brazil since 1996, this agreement represents an important milestone for Brazil," says Nuclep's President, Mr Jaime Wallwitz Cardoso.

The Brazilian Government is investing in the rehabilitation of the national ship building industry.

In 2005 Petrobras launched a bid for twenty-six new vessels for its subsidiary Transpetro as part of the "Program of Expansion and Modernization of the Brazilian Shipping."

The Brazilian Government and the Brazilian shipyards are also discussing the possibility of constructing vessels for international customers.

This increased demand of the Brazilian shipbuilding industry for two-stroke engines has led to the agreement with Wartsila, enabling Nuclep to supply locally produced two-stroke engines of highest technical standard to the Brazilian shipyards for the upcoming shipbuilding projects. Nuclep will acquire technical assistance and training of personnel as well as marketing and production support from Wartsila.

Nuclep is a state-owned enterprise established in 1975 to manufacture heavy equipment for Brazil's nuclear power plants. Today it manufactures a broad product range--including the pressure hulls for Brazil's first domestically produced submarines.

The factory is well-suited to support the shipbuilding industry. It was built near the sea so that large nuclear plant components could be transported via its own private marine terminal.

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