Under the MOU, the joint venture will invest $400m by 2019 to build an engine factory capable of producing about 200 engines per year upon completion at the King Salman Global Maritime Industries Complex at Ras Al-Khair, Saudi Arabia.
From the joint venture business, HHI expects a wide range of revenues in the form of royalty, engine part sales and technical support services.
HHI will start its first licensing businesses of the proprietary HiMSEN engines, which are medium speed four-stroke diesel engines developed in 2000 with 10 years of R&D investment.
HHI claims that HiMSEN engines are the world’s most selling medium speed engines with 22% of global medium speed marine engine markets.
An HHI official said: “The technology of building quality marine engines is crucial in shipbuilding, power generation and other industrial sectors. As we embarked on our HiMSEN engine’s first licensing business with the establishment of the joint venture, we will accelerate our efforts to expand the business further as our new growth engine.”
On the back of the joint venture, HHI plans to advance into the Middle East’s engine power plant market that is projected to worth $1.54bn by 2026.
The establishment of joint venture is a follow-up of the MOU for New Business Opportunities Collaboration signed in November 2015 with Saudi Aramco for businesses including the maritime yard, marine engine and industrial plant.