Caterpillar calls the deal "a significant milestone" that "demonstrates Sanmar's view that Cat power solutions are not only best-in-class today, but are likely to remain so for the foreseeable future."
The LOI covers the supply of Cat propulsion engines and generator sets to Sanmar for the shipbuilder's newbuilding program over the coming three years.
At least 84 propulsion engines and 86 generator sets are expected to be supplied between now and 2018. These will include 26 Cat C32, 22 Cat 3512C and 36 Cat 3516C propulsion engines plus 86 Cat C4.4 generator sets.
The engines will primarily power tugboats with bollard pulls of between 60 and 85 tonnes.
Caterpillar has a long relationship with Sanmar.
"The profile of the tugboat sector is changing," said Cem Seven, Sanmar's Managing Director. "Consolidation means there are fewer but larger tugboat operators which are increasingly focused on bigger, more powerful vessels to meet the very best standards on sustainability. Demand is shifting to more innovative tugboats which are capable of meeting the designed bollard pull more efficiently. This is what the Cat engines help us to provide to our customers."
Mark Harrison, Caterpillar Marine Regional Sales Manager, said: "We are delighted to have this seal of approval from one of the industry's leaders. Our strategy is to focus of designing products to help our customers be successful. For tugs, that is high reliability at increased engine power with quicker acceleration while at the same time providing lower fuel consumption, lower emissions and increased sustainability. Cat marine engines have proven over many years to deliver this to our customers in the tug boat segment."
Levent Altun, Group Manager at Borusan, Caterpillar's dealer in Turkey, added: "Even with the latest design features including advanced control and monitoring systems, Cat engines are renowned for ease of operation and straight forward maintenance. Together with the company's world-wide network providing constant customer support, Cat marine engines and after-sales services are a perfect blend of state-of-the-art technology and sound human relations."
Sanmar now provides vessels for many of the world's leading tug operators and recently built and commissioned a second shipyard in Turkey to handle the growing demand.
This year, Sanmar achieved delivery of 25 tugboats to owners from ten different countries, setting a new company record.