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Services operating environment

Wärtsilä Services supports customers in the marine, energy, oil & gas industries, as well as in hydro and industrial related businesses. In 2016, Wärtsilä further strengthened its hydro & industrial offering by acquiring American Hydro, a leading supplier and installer of large equipment upgrades, and a provider of servicing for the hydroelectric and water distribution industries, specialising in consultancy, design, and precision performance enhancements for hydro-turbines and pumps.

Marine customers are generally ship owners, operators, or charterers operating in the merchant shipping, cruise and ferry, navy, or other special vessels segments. Oil & gas customers are typically those either operating ships in the offshore segment or having land based oil and gas installations. Hydro & industrial customers are companies operating in the hydropower, ocean energy, and offshore wind sectors, and customers with specific installations in industrial applications.

The main driver for the Services business is the size and development of Wärtsilä’s installed equipment base. However, the offering and competences are constantly being developed in order to extend the capabilities to multiple brands of equipment.

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The market conditions faced by Wärtsilä’s end customers have a direct impact on the utilisation rate of installations in operation, and dictate the need for services relating to maintenance, lay-down, or re-deployments. Throughout the lifecycle of any installation, there are various maintenance requirements, as well as possible needs for upgrades or life-extension services. Wärtsilä's customers may also face the need for retrofits and upgrades of their equipment based on structural changes to their operating environments, such as changes in the availability or pricing of fuels, the implementation of regulations, or increased safety requirements. The outsourcing of power plant operations and management to a reliable partner is normal practice in the energy industry, and interest for lifecycle solutions in the form of partnership agreements is increasing also in the marine and oil & gas service markets. This is because such agreements further the optimisation of both maintenance and performance, thereby improving operational efficiency, reducing costs, and creating business growth.

Competition and market position

Wärtsilä has a strong position in servicing equipment sold and designed by Wärtsilä. The key differentiators are a truly global presence and the capability to provide support throughout the lifecycle of the installation. Only a few other players are able to provide such a broad services offering globally; these being other Original Equipment Manufacturers (OEM) focusing on their own equipment brands, and service companies with a global or more typically local presence.

Competition is, therefore, mainly local, consisting of parts traders, repair yards, local workshops, component suppliers for spare parts (non-OEM), and field service businesses. The number of local players is quite large; consequently competition is rather fragmented and focused on a limited offering scope. Wärtsilä is constantly developing its global footprint and local operations in order to serve its customers with superior quality, while at the same time meeting the increased demands for a speedy response.

The competition for lifecycle solutions for operating power plants comes from a few regional players capable of offering plant operational services. In the marine market, the competition for lifecycle solutions is even more fragmented with some ship management companies serving this segment. Wärtsilä Services offers a broad variety of options to ensure the best solution for the end user.

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