Power October 2022 140th Anniversary Supplement - 11

GAS ENGINES
Tomorrow Is Already Here Today:
Wärtsilä's Evolution
Finnish company Wärtsilä evolved from humble beginnings as a sawmill into a global
marine and energy powerhouse that is today a model of customer value creation,
decarbonization, and growth amid uncertainty. Driving that triumph over its 188-year
history is a consistent spirit of innovation and flexibility.
POWER
I
n 2021, Wärtsilä once again assessed
its future direction. Throughout
its 188-year history, the Helsinki,
Finland-headquartered technology
and lifecycles solutions provider for the
marine and energy markets had experienced
twists and turns, waves of soaring
growth that were sometimes allayed
by turbulence from faltering markets.
The task facing Wärtsilä executives in
2021, however, entailed first finding
the company's bearing amid the fog of
uncertain pandemic-released recovery
and accelerated pressure on environmental
performance. Then, the company
would need to navigate toward
a target position that would provide
consistent value, all while keeping its
massive workforce-a diverse team of
17,000 energy and maritime professionals
in more than 200 locations across
68 countries-safe and on board.
Executives worked out the answer in
a crucial strategy they called " The Wärtsilä
Way. " The strategy is based on two
themes-transformation and performance-that
leverage the skillsets and
technology expertise accumulated by the
company over its long history to address
current and emerging market needs.
" The Transform theme refers to decarbonization,
creating new business
opportunities by leveraging growth in
electricity generation, balancing power,
and green marine transport, " explained
Wärtsilä President and CEO Håkan Agnevall
in the company's 2021 annual report.
That theme will be crucial to the
company's October 2021 unveiled goal
to become carbon neutral in its operations
and provide a product portfolio
ready for zero carbon fuels by 2030.
" The Perform theme centers around
October 2022 | POWER Supplement
even propelled it into new markets.
The company's history began in 1834
1. Wärtsilä was established in 1834, when
the governor of North Karelia, approved the
construction of a sawmill in the municipality
of Tohmajärvi, Grand Duchy of Finland. This
region in eastern Finland was at the time
an autonomous part of the Russian Empire.
Courtesy: Wärtsilä
leveraging market recovery and growth,
supported by robust execution, continuous
improvement, and the company's
commitment to both financial and sustainability
targets, " Agnevall said. The
company's underlying purpose will also
be vital to the strategy. " Wärtsilä's purpose
to enable sustainable societies
through innovation in technology and
services is well connected to the Transform
and Perform themes, " he added.
The company will also prioritize five
key attributes to achieve that purpose:
emphasized customer value, high-performing
teams, decarbonization, service
growth, and continuous improvement.
All of these attributes will help the company
achieve a revised financial target of
5% organic growth annually and reach a
12% operating margin, Agnevall said.
A History of Resilience
All of this would seem lofty if it were
not for Wärtsilä's record of reinventing
itself time and time again. The company's
long history of innovation-as well
as flexibility in the face of industrial and
social transformation-are foundational
attributes that have kept it thriving
beyond its many transformations, and
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when Wärtsilä was established when
the governor of Karelia county, then a
part of Eastern Finland, approved the
construction of a sawmill by a river in
Tohmajärvi municipality (Figure 1). By
1898, the mill had grown into a larger
company that included ironworks. The
company had expanded significantly by
the 1930s owing to several key acquisitions,
including a machine and bridge
construction firm, two shipyards, and a
paper mill, and it moved its headquarters
to Helsinki.
Wärtsilä says it marked its foray into
the diesel engine era in 1938 as it entered
into a license agreement with
German shipbuilder Friedrich Krupp Germania
Werft AG. While engines were
first delivered under that agreement in
1940, and others with Nohab and Sulzer
in the early 1950s, the company did not
set out to design its own diesel engines
until 1954 (see sidebar " The Technology
Evolution of Wärtsilä's Diesel Engines " ).
According to Jussi Heikkinen, a 40year
Wärtsilä veteran who today serves
as Wärtsilä Energy's Director of Growth
and Development for the Americas,
Wärtsilä took a concerted leap from
marine engines and established a power
plant business in 1986. Following a
pioneering installation in Tanzania " the
business started to grow in a systematic
manner, " first through demand from
India and then from independent power
producers (IPPs) in the U.S., which
proliferated in the 1990s as deregulation
gained steam. These companies
bought " huge power plants of up to
150 MW, some of them were floating, "
Heikkinen noted. Wärtsilä moved into
building them as engineering, procurePAST,
PRESENT & FUTURE
11
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Power October 2022 140th Anniversary Supplement

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