– What are your impressions of this first year as a director of AEM?
– I was appointed on April 17. The year for me was full of action. The company is big but at the same time for me it seemed not integrated enough. All the last year we were learning to interact as a whole body. It may seem funny, but there were lots of things we did for the first time: joint meetings, business trips. Today we finally start getting the feeling, that we are a wholesome company. Thus, OKBM (Experimental Mechanical Engineering Design Bureau named after I.I. Afrikantov, part of AEM) is a traditional developer of reactors meant for icebreakers, submarines etc.

This enterprise, while fulfilling the task, always supplied their own production partly, ordering the other part in other places like “Izhora”, “Krasny Oktiabr”, “Barrikady”. Other enterprises of the AEM group didn’t supply anything. However today we are willing to produce a whole reactor assembly. We are taking part in a tender for its supply and, hopefully, will be able to win. Then we’ll complete the project on a turnkey basis.

The whole chain will be used: OKBM as a project developer, an owner of technology and producer of part of equipment, Energomashspetsstal (Rosatom’s enterprise in Ukraine) – as a supplier of fabricated parts of equipment (this plant has never supplied its production for projects like this before), ZiO-Podolsk – as a producer of pile assembly and additional reactor equipment. This is what is called synergy. From the project design documentation up to full delivery to the client by January 2015 – this term is considered really short for this kind of equipment.

– How big is this order?
– The results of the tender are not yet known, but the approximate sum is RUB1,3 billion: two pile assemblies for the new icebreaker, being built at the Baltic Shipyard for Atomflot. That’s just one of the examples. We now are trying to integrate Energomashspetsstal to all our projects, including its promotion for cooperation with Alstom.

At the beginning of 2012 we signed a contract with them for turbine hall supply to the Baltic plant. EMSS before had never supplied parts either to Alstom or to any other foreign projects, while today it is certified by many foreign buyers, including Rolls-Royce. We are trying to broaden the range of its products, making it supply products not only to ordinary markets (speaking about atomics in the first place).

– Anything else in 2012 to be proud of?
– The company is growing fast. The first pipeline contract was signed in 2006, while today our revenue for 2012 is RUB 52,4 billion. Besides synergy in 2012 we were busy fulfilling our contracts obligations. Unfortunately we all know that passing deadlines in the sphere of machine building is somewhat normal for Russia. Thanks God, it doesn’t affect the quality.

We have some issues today with the deadlines of the contracts signed in 2009-2011, however we still have made some good progress. If in 2012 there still were equipment supplies failing to meet the delivery date, today the situation has changed a great deal. It also refers to our new contracts. Thus, in our contract with Inter RAO, where we deliver equipment for GRES-2 Power Station, we are three months ahead of schedule, which has never happened before. The matter of prices is also quite clear, since we get all our orders though tenders. We constantly have to struggle since there is rivalry. AEM was established to ensure demonopolization, the task is fulfilled successfully. The prices for atomic equipment were decreasing during the last five years.

Joint Production

– How is your joint venture with Alstom doing?
– At the end of 2012 we picked out a site for it. We leased the whole territory of Atommash, all its equipment, converted almost all the personnel (about 2000 people). That’s where we today are producing the reactor for the Baltic NPP, assemblies and steam generators ready-fitted for the station’s unit 4 of the Rostov NPP, make a core melt trap and so on. Now we are signing a contract between AEM-Technologies (manages the affiliate in Volgodonsk) and our Joint Venture for the production of a condenser which previously never had been produced on the plant.

– And what was Atommash doing these days?
– Oil and gas chemistry equipment. For it is also an important direction. We already have twice more contracts with oil and gas chemistry companies then they had last year. Started working intensely with LUKOIL and Rosneft.

– Does oil and gas chemistry play significant part in your stock of orders?
– For now its part in our revenue is small. Atomics are dominating (about 65%), being the most viable, not regarding the prices decrease. However we have to increase the total scope of production, using all the segments. The five years strategy suggests increasing the amount of allied segments, including our presence at the heat market. The modernization program of ZiO-Podolsk first of all is oriented on the heat sector.

In the sphere of thermal power our partner is NEM, one of the world leaders, designing waste heat boilers. Not a long time ago we met and confirmed our mutual intentions to prolong the license agreement. We’ve already completed two projects with them and are looking forward to new ones.

Integration Expenses

– In the AEM structure there are many enterprises, some either of supporting type or crossing their functions. Is it worth while to keep them all?
– We are developing the program to increase the efficiency of the holding. It is necessary to determine the specialization of every company in order to exclude the possibility of internal rivalry and not double investments. Now we already know the assets bundle which is not that useful for us and which we are going to sell. Some can be given out for outsourcing.

Also we are planning some changes – even in specialized sectors there is a need to get rid of some extra legpers. Since sometimes it happens like this: for only one plant there are six legal persons. There is also some compaction plan which today is being worked on. By now we already know that we don’t need that many sites. Only the Volgodonsk one is 700 square meters.

– How the Petrozavodsk site is doing?
– This year we are offloading the first steam generator vessel. We now are also familiar with the main circulation lines, which were traditionally purchased abroad, and with main circulating pumps barrels. The Central Mechanical Engineering Design Bureau (part of AEM) makes pumps, doing a package delivery for our clients. In 2012 the first stage of Petrozavodskmash reconstruction and modernization was completed, allowing us to fulfill production of the whole equipment, except the reactor vessel. The second stage was planned to be reactor production, but today I think, that we are going to do it at the Volgodonsk affiliate.

– Are there any more assets able to join AEM?
– Today we have everything necessary for performing a good job. We have a full pack of assets, may be only except some minor matters. However it may change if the tasks of the market change. India, for example: should they make a decision to build their NPP, the new JV will be needed as well as production site.

– On what local markets might they somewhat soon need a partner? Czech Republic, Turkey?
– We have two plants in Czech Republic: Arako and Chladici veze. While Turkey is more for Rusatom Overseas. For the total scope of equipment for us to supply there we don’t need a partner. In general, provided that the equipment is not critical, its production can be organized on site. However it is impossible to learn to build a pile assembly in a term of plants building. While organizing this type of production for building only four stations is not worth while.