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SCMP Reporter

FINLAND'S Wartsila Diesel Group, which manufacturers marine engines and diesel power plants, sees a strong future in the China market, where shipbuilding activity is picking up.

  So far this year, the group has received orders for 50 auxiliary diesel engines worth more than $200 million from China, according to Georg Ernhrooth, chief executive of the parent company Metra Corp.

  Mr Ernhrooth and other Metra executives were in Hong Kong recently to meet regional clients.

  Wartsila Diesel signed its first co-production agreement with the China State Shipbuilding Corp and China Shipbuilding Trading Co five years ago, covering mainly the company's Vasa 22 type engines.

  ''After a slow start, the agreement gave access to the Chinese marine market and turned out to be very satisfactory,'' Mr Ehrnrooth said.

  The agreement was extended in April this year and amended to include Vasa 32 and 46 series and the Wartsila 25 (Nohab).

 ''The Chinese market has become very important to Wartsila Diesel in the past couple of years and the business in China is growing very fast,'' said Wartsila president Pentti-Juhani Hintikka.

  He said that although the new business has developed in the diesel power plant sector, the extension of the contract means that the group will strengthen its position in the marine market as well.

  The expansion in China created a rapid demand for services and spare parts and the company has opened its first service centre in Shanghai, close to the shipbuilding industry.

  The centre is a joint venture with the Shanghai Marine Diesel Engine Research Institute and ''has substantially increased our capabilities to serve our customers in China'', Mr Hintikka said.

  The centre produced its first engine this year.

  ''Reaction from our Chinese customers has been very positive. Apart from the pure business aspect of serving our Chinese customers locally and on their terms, the concept now implemented adds substantial credibility to Wartsila Diesel as a serious supplier with long-term ambitions in the country,'' Mr Hintikka said.

  Wartsila also has received orders for 15 diesel generating sets, together with auxiliary equipment, worth $800 million.

   For Wartsila Diesel, Hong Kong is the heart of the expanding China market.

  Although the core of the business is in China, for practical reasons operations are concentrated at Wartsilla Diesel (China) in Hong Kong, which is headed by Pertti Hekkala.

  Metra's main businesses are diesel engines, bathroom products and locking and access control devices.

  Wartsila Diesel is the world's largest manufacturer of medium-speed engines and major supplier of high-speed engines.

  The group has production facilities in five European countries, India and the US, supported by a network of sales and service companies around the world.



Finnish firm sees strong China growth