JULY 24, 2014 — After selling the majority stake in its two stroke engine business to China State Shipbuilding Corporation (CSSC), Wärtsilä is divesting its shares in two-stroke manufacturing joint venture Qingdao Qiyao Wärtsilä MHI Linshan Marine Diesel Co. Ltd (QMD). Wärtsilä's shares in the joint venture will be transfered to the current majority shareholder, Qingdao Qiyao Linshan Power Development Co Ltd, a company fully owned by China Shipbuilding Industry Corporation. The agreement was signed today in Beijing, China.
The value of the transaction is "not significant," says Wärtsilä.
Under the previously reported deal with China State Shipbuilding Corporation (CSSC), the parties will co-operate in two-stroke engine technology, marketing, sales, and service activities. Manufacturing will be delegated entirely to licensees.
"The move to divest manufacturing assets will free up resources and increase our emphasis on accelerating the development of new engines and advanced technologies," says Martin Wernli, Vice President, Wärtsilä Ship Power, two-stroke and Managing Director, Wärtsilä Switzerland Ltd. "In particular, Wärtsilä's unique low-pressure dual-fuel two-stroke engine development, the further expansion of the environmentally friendly Generation X -engines, as well as emission reduction technologies will benefit from this increased focus."
QMD will continue to manufacture Wärtsilä low-speed marine engines under license from Wärtsilä via the new joint venture with CSSC. The currently valid license agreement will not be affected by the transaction.
QMD was established by China Shipbuilding Industry Corporation (CSIC), Wärtsilä Corporation, and Mitsubishi Heavy Industries Ltd (MHI) in 2006. The joint-venture agreement was signed by Qingdao Qiyao Linshan Power Development Co Ltd (QQLPDC) and Panda Shinco Holding BV (PSH). At that time, QQLPDC was 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.