Mitsui Engineering & Shipbuilding Co., Ltd. (MES, president Mr. Takao Motoyama), Hudong Heavy Machinery Co., Ltd (HHM, chairman Mr. Yang Jiafeng), and China State Shipbuilding Corporation (CSSC, president Mr. Chen Xiao Jin) have agreed to establish a joint venture company CSSC-MES Diesel Co., Ltd., for manufacturing and sales of marine diesel engines for cargo and cruise ships and concluded the joint venture agreement on July 5, 2005 in Shanghai, China. Three companies, on the approval of the joint venture project by the Chinese government which is now in process, will immediately set up the joint venture company and will start manufacturing in the latter part of 2007 to achieve an annual production of 1 million horsepower in 2008. The joint venture company eyes the possibility of 3 million horsepower production in the future by expansion of the facility. MES, as a top manufacturer of marine diesel engines in Japan, is now strengthening its production system to achieve 5 million horsepower production annually. The participation to this joint venture is expected to synergize with the diesel engine business of MES as well. CSSC is the biggest shipbuilding group in China and has nine big shipyards under its umbrella. HHM is the No. 1 marine diesel maker in China, with a 60% market share in China. The establishment of the joint venture company will surely keep up with the engine demand by Chinese building of ships which is expected to expand rapidly in the future.