Wärtsilä expands to the Russian railway market

Wärtsilä has signed a joint venture agreement with the Russian company Transmashholding (TMH) for the manufacture of modern and multipurpose diesel engines in Russia. The engines will be used in shunter locomotives and for various marine and power applications.

The two companies will jointly engineer the railway application. Wärtsilä and TMH will also evaluate the possibility of future broadening of the activities of the joint venture to include the development and manufacturing of other diesel engine models.

The value of Wärtsilä’s investment in the joint venture is approximately 30 million euros and production of the engines is planned to start in 2012. The closing of the agreement is subject to the relevant regulatory approvals, which are expected during the coming months.

– This joint venture between Wärtsilä and Transmashholding is a strategically important step for Wärtsilä to broaden its business into the rail market. It offers Wärtsilä a promising opportunity to leverage its high competence and expertise in advanced engine and modern manufacturing technology. This creates the potential to increase sales of Wärtsilä’s products and services beyond our traditional marine and energy markets, says Ole Johansson, President and CEO of Wärtsilä Corporation.

Wärtsilä and TMH will set up a 50/50 holding company. The company will build a new engine factory in Penza, Russia for assembling and testing engines, and for the production of certain larger engine components. Annual production is estimated to reach 250-300 engines. A large share of the production will be targeted toward the Russian market, with a smaller share possibly exported outside Russia.

A new version of the Wärtsilä 20-engine, which is being developed especially for shunter locomotives, will be manufactured in the new factory. Shunter locomotives are used in rail yards to assemble and disassemble trains, and to move train cars.

The joint venture is the latest step in the already established co-operation between the two companies, which began in 2007, when Wärtsilä and Bryansk Engineering Works (BMZ) signing a licence agreement for BMZ to manufacture Wärtsilä low-speed marine diesel engines.

www.wartsila.com