With going global plans made clear, the company is persistent in its goal. In 2014 alone, Atomenergomash received RUB 227bn in orders (+51% y-o-y) and is raising the bar up to RUB 300bn for 2015. A significant portion of this money will come from end-to-end supplies of nuclear and turbine islands for the power plants under construction in Russia and other countries. Contracts have been signed to supply nuclear steam generators for Akkuyu in Turkey, Hanhikivi-1 in Finland and Kursk-2 in Russia. “The more orders and revenue we have, the easier it is to optimize costs,“ adds Andrei Nikipelov. With borrowing costs growing, there is no other way to expand business.
End-to-end solutions
Atomenergomash has made a long way to become an end-to-end supplier of core equipment for nuclear power plants. The process started with building an entire supply and production chain and acquiring new competencies. “Today we are able to manufacture almost any type of equipment for nuclear power plants and provide comprehensive engineering services – from project design to installation and maintenance. In other words, we offer reliable and efficient engineering solutions tailored to the customer’s needs, rather than supply ordinary equipment,” explains Andrei Nikipelov.
An important task was to ensure timely shipments. “Being an end-to-end supplier of nuclear power equipment is a great responsibility. Timely performance is the only way to prove our reliability as a supplier,” continues Atomenergomash CEO.
Efficiency is key
Another strategic goal of the engineering division is operating efficiency. Atomenergomash has adopted the Rosatom Production System (RPS), an ambitious industry project targeting labor productivity, cost optimization, salary increase, new career opportunities and lead time reduction. In 2014 alone, economic benefit from RPS projects reached RUB 354.02m. In its strive to improve efficiency, the company disposes of its non-core assets. Last year the disposal program brought in RUB 3bn in net proceeds subsequently invested in production facilities.
New prospects
Andrei Nikipelov sees the future of Atomenergomash in the development of new businesses, such as ship-building, civil engineering and defense procurement. Its order portfolio in the ship-building industry has increased by 51% to reach RUB 56bn. In addition to the contract made in 2013 to supply a power unit for the flagship nuclear icebreaker, the company signed a contract for two RITM-200 nuclear reactors to be installed on new generation icebreakers. The project involves several engineering companies representing an end-to-end production chain.
The company has ambitious plans to increase its revenue on the heating market. “The heating industry is a difficult market to play – it is shrinking, but we are increasing our share. We are ahead of the schedule in performing our contracts on the heating market. Quality is our strength, our competitive advantage,” stresses Mr. Nikipelov.
As the domestic heating market slows down, Atomenergomash plans to expand into international markets. “We focus on Kazakhstan and other CIS countries having experience in working with our products. We supply equipment for new thermal power plants and offer modernization services for existing heating stations,” continues Mr. Nikipelov.
Another strong point of Atomenergomash is its advanced R&D unit which will become a new industry center for engineering research through the anticipated merger of the Central Research Institute of Machine Building Technology, the Russian Research and Development Institute of Nuclear Power Engineering and the State Institute of Engineering Design. Results of their research will be applied in the heating and petroleum industries. “We will focus on increasing export supplies,” concludes Andrei Nikipelov.
