Business

Wartsila to enhance presence

CHENNAI: The euro 3.8 billion Finland-based power solution provider Wartsila Corporation will definitely look at shifting production of more components to India. Giving a clear hint to this effect, Ole Johansson, President and CEO of Wartsila, however, said that “the speed (of making new products) will depend on how the volumes develop.”

In an interaction with The Hindu here, Mr. Johansson said the Wartsila plant at Khopoli near Pune was already making gear boxes. It would also roll out propellers. He said over a long-term “production will shift toward countries like China, India and Vietnam.”

In this context, he pointed out that ship-builders had already moved production of certain components to these countries. Wartsilla has three units in China. A fourth one would come there by the beginning of next year, he added.

Rakesh Sarin, Managing Director of Wartsila India, said his company was active in the domestic industrial segment. The Indian subsidiary, he said, would look for providing power solutions for bigger plants from 25 MW to 300 MW sizes.

With the East-West gas pipeline happening, “we are looking at how we can offer opportunities for entrepreneurs,” he added.

Mr. Sarin said Wartsila had invested around euro 8 million in India in the last two years.

“We have given proposals for further investments,” Mr. Sarin said, without giving details.

Wartsila Corporation had a capex programme of euro 200 million (about Rs. 1,300 crore) for the current year for its entire global operations. In India, Wartsila has a total installed base of around 5,000 MW, comprising power plants and marine engines. The company also had been taking care of the operations and upkeep of 50 per cent of the total 270 power plants it had delivered in India, Mr. Sarin added.

Mr. Johansson said the acquisition of two design companies — one each in Singapore and Norway — had helped Wartsila “step into the value chain.”

On the global meltdown and its fallout on the company, Mr. Johansson said close to 78 per cent of Wartsila’s order book was secured by advance payments.

In the wake of the global financial crisis, it had become difficult to do any guessing on the evolving uncertainty, he said. Around 40 per cent of Wartsila’s revenue came from services.

Marine and power plants contributed the rest. “Growing the services rather than increasing the share of services is our objective,” he added.

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