Texmaco signs engine deal

Texmaco signs engine deal

PERTH (Dow Jones): Australia's Orbital Engine Corp. (OE), an engine technology concern, Monday said Indonesia's PT Texmaco Perkasa Engineering has signed a license agreement to manufacture a range of Orbital Combustion Process two-stoke engines.

The Indonesian engineering and heavy equipment company intends to produce 30,000 three-cylinder two-stroke engines within two years, Orbital said in a statement.

The three-cylinder engines will be closely followed by two- cylinder and one-cylinder versions, Orbital said.

"In addition to servicing Texmaco's internal product demands, Orbital views the new engine manufacturing venture as strategically placed to supply low-cost, high-quality OCP engines to independent vehicle manufacturers worldwide," said Kim Schlunke, Orbital Chief Executive Officer.

Orbital will give Texmaco the technical know-how to set up a production plant in Subang, Java, in return for a royalty of between 3 percent and 5 percent on each engine, Orbital company representative Ken Johnsen later told Dow Jones Newswires.