I would like to present the Public Reporting Materials of the Mechanical Engineering Division of State Atomic Energy Corporation ROSATOM for 2020.
This document covers production, financial, social and environmental issues related to activities of the Mechanical Engineering Division of State Atomic Energy Corporation ROSATOM (the Company, the Division, JSC Atomenergomash, AEM). In 2020, JSC Atomenergomash continued to actively develop and transform its operations to, above all, improve performance and develop new businesses. In 2020, we expanded our ten-year portfolio of orders: as at December 31, 2020, it exceeded RUB 800 billion compared to RUB 756.2 billion in 2019. We also completed corporate restructuring: over the past five years, we have done a huge amount of work to sell assets totalling more than RUB 10 billion.
In 2020, the Division updated its Development Strategy 2030 and continued to work on its strategic goals – to ensure the supply of key equipment under ROSATOM’s roadmaps, improve performance, and increase the share of new products and foreign operations in the revenue.
In 2020, as part of high-power NPP construction projects, we achieved record-setting performance: JSC Atomenergomash has equipment in various degrees of completion for ten power units simultaneously at its enterprises. The Division produced three reactor vessels and 18 steam generators – equipment for Kudankulam NPP (India), Rooppur NPP (Bangladesh), Akkuyu (Turkey) and Kursk NPP 2. The Company is producing equipment under Chinese projects (Tianwan and Xudabao NPPs) at an accelerating pace and turbine building equipment based on the ARABELLE low-speed steam turbine technology.
JSC Atomenergomash is still actively involved in the program aimed at developing the Northern Sea Route. In 2020, the Company signed a contract for the package supply of a nuclear propulsion unit (reactor and steam turbine plant) for the Lider nuclear icebreaker. The Division prepared technical documentation to start the production of the RITM-400 unit to be completed by 2026 under the contract.
The Division is also involved in the implementation of nuclear energy projects – floating power units and SNPPs, with a conceptual design for an optimised floating power unit (OFPU) developed and approved. As early as at this stage, it was confirmed that economic indicators of this unit made it competitive in terms of energy cost both in Russia and abroad. Now, the Division is moving into the next phase – the implementation of the engineering design of a floating power unit with the RITM-200 reactor unit – and actively interacting with potential customers to meet their needs in full.
Non-nuclear businesses of the Mechanical Engineering Division are developed as part of achieving strategic goals in the industry and top-priority national objectives.
I would like to specially recognise JSC Atomenergomash’s contribution to strengthening Russia’s technological independence through import-substituting products for LNG production. In 2020, the Division completed the testing of Russia’s first LNG pump, which plays a key role in large-scale LNG production. The pump was put into operation at a site of Russia’s largest LNG producer. Technical specifications of JSC Atomenergomash’s equipment meet the highest international standards and requirements. The successful tests give the Mechanical Engineering Division an opportunity to receive references and adequately compete with traditional suppliers of such equipment in the global market.
We also continue to create Europe’s first test bed for equipment made for medium- and large-scale LNG plants. The unit is being constructed at a site of JSC Institute of Electrophysical Apparatus and is expected to be completed in 2021. Such a test bed will allow Russia to reduce its dependence on import equipment and contribute to the development of a new sector in the Russian industry.
In the course of its operations, JSC Atomenergomash adheres to the global sustainable development agenda focusing on the idea that the development of the present generation must not disserve the interests of future generations and economic growth must not cause environmental degradation and must be accompanied by progress in solving social problems. Corporate social responsibility became a global and Russian trend, and the Mechanical Engineering Division of ROSATOM promotes this.
As part of the Clean Country federal programme, the Division’s enterprises produce equipment for four waste-to-energy plants under construction in Moscow. In the reporting year, the Company completed the shipment of the core equipment for the first plant and started shipping to the second plant. The project aimed at constructing the fifth plant is expected to be launched soon. In 2020, ROSATOM, one of Russia’s largest industrial companies and a state development corporation entered into a trilateral agreement giving JSC Atomenergomash opportunities to work on 25 similar waste-to-energy projects throughout the country. While implementing the projects, the Division’s enterprises learned how to apply unique cladding technology never before used in Russia, when producing boiler equipment. With the unique technology and the production organised, we have already successfully implemented the first contract for the manufacturing and supply of equipment for the Riverside waste-to-energy plant (United Kingdom).
Marked by the COVID-19 pandemic, 2020 put our humanity and production capabilities to the test. The health of employees is the Company’s absolute priority. To minimise risks, we enabled remote work for employees whose positions allowed that. As for the production facilities, despite the difficult situation, proper work schedules allowed the Division’s enterprises to meet deadlines, so the pandemic did not have a significant impact on the terms of existing contracts. We have made up for lost time quickly.
Since 2021 and in the next few years, we will see a peak in production in the nuclear industry. We are prepared for this: JSC AEM-Technology managing our plants in Volgodonsk and Petrozavodsk is continuing to hire new employees, and we are continuing to implement investment programmes at our plants involved in the production of reactor unit equipment. In the long term, until 2030, we should gradually increase our “external” – non-nuclear – revenue, including from our own products, and reach our target foreign revenue share. This is why it is extremely important for the Company to achieve its strategic objective – to expand product lines within the current scope of the Division’s business.
Consistently achieving goals set and solving large-scale and complex problems, JSC Atomenergomash remains a key element in the development of Russia’s nuclear industry. In 2020, we all faced new challenges that had a huge impact on our lives. Business growth paired with pandemic restrictions became one such challenge. We had to quickly adapt to new conditions, make non-routine decisions. It was hard but we made it – the difficulties united us even more. I would like to thank all the teams of our enterprises, all employees of the Division for their good work, which allowed us to fulfill all our obligations to customers, as well as our partners, and for their trust and meaningful cooperation in difficult situations.
Head of the Mechanical Engineering Division,
Chief Executive Officer of the holding company of the Division,