We waited for this for twenty years
For the first time since the Soviet era in Russia built a large and technologically sophisticated engineering plant, "Power Machines" built "in an open field," a new venture for the production of turbines. A compelling argument for those who still thinks that technological innovation capacious shuttle service can be organized only in partnership with foreigners.
Igor Kostin, General Director of OJSC "Power Machines"
We kind of got used to the fact that they’ve taken up the old Soviet hurt. Built during the Soviet era and hundreds of thousands of factories that have not gone bankrupt, have not collapsed and changed the line, purchased a new home, most of them are more or less fit into the market, many modernized, and some even produce a new product. But, you see, to live in someone else’s house to repair it is not the same as building a new one. And it’s not just pride in the fact that we can build new plants that we have the money — it’s still growth and global competitiveness. It’s one thing to close its market protectionist measures and sing a song about national manufacturers is quite another — to feel free in a competitive field at least its market. But in order to meet the global world players, should at least have an adequate industrial base. And such a base patching up holes in Soviet factories could not create. Once the new plant with the most modern equipment makes sure: now in competition all starts to depend on ourselves, it is our experience, competence, pressure, dedication, intelligence and talent. But a major new plant is expensive — it is at least hundreds of millions and often billions of dollars. The equipment is mainly imported, and sold it in Russia, usually for a large profit. In general, the return on such investments for Russian business is no longer measured by the usual two or three years. And the one who is going to take this step, said the country: it is here to stay, that’s his business and his country.
That is why we are so closely watching those who are ready, do not skimp on good business start-earned billions. And recent years have given us plenty of reasons to be proud. Then came the first of the new Russian oil refinery (TANECO in Tatarstan, a project of the local ruling elite). Here, finally, the national capital built the first cement plant ("LSR-cement" in shale Leningrad region, is a group of that name businessman Andrey Molchanov). Here’s built the first blast furnace (owned by Vladimir Lisin Novolipetsk Metallurgical Plant). Mills-5000, pipe and aluminum plants, hydropower plants, poultry and pig farms — all this we have a punctually. This was launched in Tikhvin first engineering plant for the production of a new generation of rail cars. And one more event: just over $ 240 million to build a plant for the production of power equipment. It is built on the outskirts of St. Petersburg owned Alexei Mordashov by "Power Machines".
However, talk about the revival of Russian power is premature. The intrigue with this plant came easy. The fact that at one time we have instead of national players prevailed the idea of technological transfer, in partnership with major world leaders. Simply put, the surrender of the market in exchange for technology and production facilities in Russia. So, for example, occurred in the automobile industry. So, apparently, was to come in power engineering, where seven years ago started the procedure of sale of shares of "Power Machines" to Germany’s Siemens. But unlike cars, where even AvtoVAZ did not differ much success in the manufacture of turbines in Russia were comparable with global players (Siemens, Alstom, General Electric) products and expertise. Thank God gave up the idea, and "Power Machines" by a Russian strategic shareholder. However, the idea of creating partnerships with foreigners is not dead, because the production of the competence demanded by the market "Power Machines", or did not have the (low-speed steam turbines for the nuclear industry in the Soviet times produced at the Kharkov "Turboatom"), or the competence of these have been lost over two and a more than a dozen years (gas turbine technology). Yet the fate of the Russian power engineering are not addressed in the undercover disputes, and concrete action in "combat" operations. Only the works of their initiators especially preferred not to extend.
The alignment of forces on this front, the formed by 2007-2008, there was such. On the one hand, it was Alexei Mordashov, who has set "Power Machines" task to eliminate gaps in the company’s business, to bring it to a new level of competition, and that to achieve this goal has already spent about $ 700 million. On the other hand, it was Sergei Kiriyenko, led the "Rosatom", which set out to create his own turbine manufacturer in alliance with Alstom. Finally, a second turbine manufacturer in Russia — owned Viktor Vekselberg Ural turbinostroitelny plant. UTZ did not interfere in the global showdown, and focused on serving several hundred turbines set buyers back to Soviet times.
It so happened that a couple of weeks ago, opened just two card hand. The company "Rotek" UTZ control, provided that journalists are able to see the modernized production and talk with key senior managers (see
— "Power Machines" because this new plant is actually under the orders of "Rosatom" built?
— That’s right.
— In this case you have not had firm orders?
— Strictly for the new plant, we have not received them. The fact that we have built production with the expectation that we can do here at half-speed turbine technology. But while the equipment installed and allows high-speed turbines, steam turbines for thermal generation of high power — 500 and 600 megawatts. Moreover, the machines are so versatile that we can here to process large part of turbines. Although, of course, initially the production program of the first stage of the enterprise is designed for the manufacture of two high-speed and low-speed two steam turbines of up to 1,800 megawatts each, and the four generators of the same capacity.
— What is the basic difference between low-speed and high-speed turbines for nuclear power plants?
— The main difference — in the number of revolutions of the rotor shaft. Greyhound technology — it’s 3000, and the low-speed — 1500 rpm. Because the low-speed turbine blades slightly longer under two meters, building speed turbines bulkier and heavier. But all the technical characteristics almost identical: efficiency, maintainability, the period of service. We specialize in historically high-speed units. This turbine has a reduced weight and, accordingly, due to smaller weight — lower costs.
— Do we understand that high-speed turbine has crept up to the limit of its capacity — 1200-1300 megawatts, but the low-speed turbines can be made significantly more power, 1600 MW or even more?
— Speaking of the power of 1600 MW or 1800, the world has no such speed turbines. In "Rosatom", for example, basically planning to build blocks with a maximum capacity of about 1200 MW. For this it is sufficient to power a high-speed turbine, which we have designed. At the same time, there are prospe
cts for increasing the power unit of the reactor, so we designed a new plant with the ability to produce turbines of up to 1,800 megawatts by low-speed technology. That is, we are fully prepared, if necessary, to produce low-speed turbines for the "Rosatom".
— "Power Machines" lost the tender for the second phase of the Tianwan nuclear power plant, the turbine unit, it has not got due to the fact that we do not slow turbines?
— As far as I understand, the main reason for our loss — these are requirements for localization. China insists that the supplier of the equipment was localized in the country. Due to the unavailability of such localization, we, unfortunately, were left without ordering in China.
— In the case of China shows that you are beginning to have difficulties selling high-speed turbines for nuclear power plants, your key export product. According to the same low-speed turbines you do not even references, respectively, abroad such unproven turbine nobody will buy it. So, you have one option for the sale of such turbines — "Rosatom". Only after he made a purchase and start up, you can expect export contracts. What all have potential contracts for low-speed turbines of "Rosatom"?
— It is a contract for the planned Nizhny Novgorod NPP or Kursk, where means the use of low-speed turbine. We are going to actively participate in the tender. For us it is extremely important because it will provide the reference of our new low-speed turbines.
Not everything in the hands of "Rosatom"
— Then there is the issue with the initiatives of "Rosatom", which tries to create his own production of low-speed turbine …
— "Rosatom" professes, as I understand it, the principle of competition. We welcome it in fact — otherwise we as a monopolist could be assured that all orders will be ours, and, therefore, cease to move forward. I have five years as CEO, "Power Machines". And five years we hear that Alstom together with "Atomenergomash" (Engineering Division "Rosatom." — "Expert") Creates a new joint production in Russia. Involve different configurations in different proportions, with perhaps even the third assets, and so forth. Latest information — that the end of the year they are planning to choose a site for construction. We treat this with understanding, waiting, preparing for the competition, but nevertheless our new plant you have seen, and we can show the final draft of the turbine and generator. And they — no.
— In contrast to the "Power Machines" from the joint venture Alstom and "Atomenergomash" already has a firm contract with the "Rosatom" for the purchase of low-speed units. We are referring to the Baltic nuclear power plant under construction in Kaliningrad. But if the station will be built according to plan, the joint venture simply does not have time to make it to the turbine in Russia?
— Looks like it. At first it was assumed that the delivery of the first turbine for the Baltic NPP will occur in 2014. And, incidentally, we were ready for the launch of our new plant, under this contract, and adaptive. Now the time shifted the 2015 th. Let us suppose, if they have time. First, you need two — two and a half years to build the production, design, and get documentation on the turbine. And then you need more than a year to produce the turbine itself. Now the end of 2012, so that, in my opinion, even 2015 is too optimistic scenario. So I think that a large percentage of equipment for the Baltic station will be made not in Russia and abroad, localization get the minimum.
— And then there was the traditional scheme: first, they will develop the assembly of imported turbines and only then — the localization?
— Contract signed by the joint venture Alstom and "Atomenergomash" on the Baltic nuclear power plant, does not imply a complete localization at this stage. Originally called the 80 percent, but now talking about 50. In fact, be even less. We’re going back to our project, we assume 100 percent localization. That is the whole and entire turbine generator will be manufactured here.
Moreover, I can not boast: in the new factory, we have implemented the welded rotors. We purchased an absolutely unique setting for welding, providers themselves say that this set of equipment is not present at Siemens, neither Alstom. Today, we can weld segments rotor, wherein the rotor may even be hollow. That is, we do not need to buy large forgings and so on. We buy their parts, and this, by the way, totally different prices. And they may even be of different grades of steel. That is, we can buy expensive responsible steels where necessary — the center of the rotor, and other steels on the end, and the rotor may be hollow. This lower weight and dimension characteristics and cost, longer life, and of the lower price, of course.
— If you do so all is well, and even the price you are willing to cut, then how to explain the actions of "Rosatom"? Do they want to lower the price of corny below the lower limit? Or do they still have some other motivation?
— They say that the developing competition between manufacturers. However, it must be said that in many countries the priority is given to domestic, local producers. It is unlikely that in France a major tender for nuclear equipment can win Siemens, and in Germany, Alstom. And maybe that’s right. Of course, the economy should be transparent, clear pricing, competitive price. But something has to produce a local player, and not foreigners.
— Most recently made a statement of "Rosatom": state-owned corporation is ready to buy the Kharkov factory "Turboatom" the government of Ukraine, if it will be sold. And this is your only serious competitor in the entire post-Soviet space. Will a "Rosatom" to compete for this asset?
— Definitely. We estimate the "Turboatom" as a strong company with decent turnover. They produce about 2 gigawatts of turbines per year, the annual revenue from them 150-180 million. At the same time, I would emphasize "Turboatom" is different from "Power Machines": it has jurisdiction only for the production of turbines. They have underutilized capacity, we give them the orders of irresponsible production by co-operatives, they make us the price. By the way, we are one of the shareholders of "Turboatom". We have more than 5 percent, and we carefully look at the situation on the privatization of the asset.
— Consider a hypothetical alternative: the tender was announced, but it wins the "Rosatom". In this case, your customer is a key supplier to both himself. You do it then do not need you?
— It is not. I believe that in any case it will depend on the volume of the order of "Rosatom". First, more recently, he declared in the Roadmap purchase of two, three, four units per year. Second, many will define the technical parameters of the equipment, its cost, it is also important things. Thirdly, according to rosatomovtsev themselves, even though the attempt to create a joint venture with Alstom, too, because they need competition. That is, the country should be a place under the sun, not only for the joint venture and "Turboatom" but also for "Power Machines".
In general, it will be difficult to introduce three to four units a year, it’s still a very large amount. So that a certain segment of the market, we hope to maintain, even in this difficult situation.
Foggy way of technology transfer
— In Russia now being built quite a lot of combined cycle gas turbines (CCGT), o
ne of the elements of which are gas-fired turbine. Do we understand that the Russian market is finally passed gas turbines? Or at least put an end to the development of their high-power gas turbines?
— We are studying the situation on the world market power engineering equipment: gas turbines market today is heavily compacted around the world. If before the ten-year term this segment was 30, and even 40 percent of the total generation (atom, steam, gas, hydro, alternative power generation), it is now talking about 10-15 percent of the total world market, which is seen in the next ten years. This is a huge shift seems turbine ceases to be a dominant theme. All of this is replaced by the thermal (coal blocks), hydro and renewable energy. The next question is: how big is the market of gas turbines? Here in Russia I have the answer — I do not know. As I understand it, this is highly dependent on two things: the cost of natural gas and the cost of turbines. I note that now the technology allows to reach rather high efficiency (45-47 per cent) for steam turbines operating at supercritical steam parameters. This is not something that is comparable to gas turbines, but given the relatively low cost of coal steam turbines definitely become a reasonable alternative to gas.
Therefore, we reasoned that we historically looked good in the vapor topics in gidrotematike, nuclear issues. But, unfortunately, in the last 20-30 years are far behind on the gas towards. We did not have your own product, all we had in the last 15 years, this is a license agreement with Siemens on are not the latest model of the gas turbine. Therefore, we have decided for themselves: in the manufacture of gas turbines with a capacity of more than 60 megawatts of creating a joint venture with Siemens. In this venture, our share — 35 percent. Siemens handed back the license for a competitive product, with the latest version. And that is very important for us now "Power Machines" — a preferred supplier of steam turbine and generator complete with a gas turbine from Siemens for combined-cycle plants. With the purchase of the "Red boilermaker" We plan to deliver there is also a waste-heat boilers for combined cycle. That’s in the framework of the joint venture, we have agreed to co-operate with Siemens in Russia and the CIS market.
We have not left the market of gas turbines, we just reformatted our relationship with a German partner, have made them ideal. Nor were the preferred supplier of complete equipment except, indeed, for combined cycle gas turbines. However, I do not rule out the revision of the format in the medium term.
— We do not fully understand your strategy. "Power Machines" — a recognized player of the world market. But in some segments of the company lacked its own work: for low-speed turbines, hydro turbines of low power gas turbine. It was possible to create a global joint venture with one of the world leaders, with the same Siemens. Or try to fill the gaps on their own. It turns out that in one direction (gas turbine) you went to the first path on the other (low-speed turbine) — in the second.
— Our strategy has evolved as follows. In 2007, when we came to the "Power Machines", we realized that the power engineering industry is rather conservative. And even problems with financing, receipt of orders that were 10-15-20 years, fortunately, not much impact on the engineering and design capabilities of the company. We are still able to produce turbines, competitive in terms of efficiency, technical parameters, price. This is supported by our projects not only in Russia, but also in Western Europe, USA, Canada, and so on. In the steam category there is a slight lag. But we are trying through investment in R & D by investing in the production of this lag (I mean the absence of the 2008 tihohodnoturbinnoy line and turbines, designed for ultra supercritical steam parameters) to eliminate. Now, these products have already been created. We’re just waiting for the reference of the tender, where we could implement this project and get the reference, and then actively go on world markets. For gas, unfortunately, came to the conclusion that despite the fact that the Leningrad Metal Works (LMZ, key enterprise "Power Machines." — "Expert") At the time was a pioneer in the creation of a 100-megawatt gas turbine, we have lost 30 years of expertise. Moreover, foreign players due to large investments, primarily government, created a product that is difficult to reproduce. It will be a costly and long. The same Siemens for the development of gas turbines for 340 MW has spent hundreds of millions of euros.
— Then why did you go the other way: roughly speaking, you give a major world player of the market, but have access to all of its technologies in all areas. And accordingly, immediately takes charge.
— First of all, according to our practice, no major global player never goes to such partnership. Typically, the task of the player in the best case, to make a production hub at the site of the partner. I honestly do not believe in a comprehensive co-operation with a major player. If all of a sudden it will take for some reason, I do not think that the "Power Machines" within it could get its potential for development.
Secondly, I do not remember a single case where a foreign partner, getting even a majority stake in a joint venture, would do in the Russian 100-percent localization. It is not present at GE, Alstom and neither "Atomenergomash". 100 percent not be located anywhere, even in China.
— In addition to new products, such as low-speed turbines, you actively go to non-traditional businesses themselves — have bought, for example, a manufacturer of boilers "EMA". Why is that?
— This was the next step after creating new product lines. More and more buyers are guided by the solutions "turnkey". They are not interested in buying the equipment separately, a separate engineering, linking it all by yourself, and we decided to also become a supplier of complete products. Any full supply means in addition to engineering and design decisions still a fairly wide range of products. Accordingly, as part of the strategy for the $ 315 million we bought the "EMA", the manufacturer of the boiler equipment. Then we set up a joint venture with Toshiba for the production of transformers and are now building the plant, the investment in which the order of 5 billion rubles. Who are talking about buying engineering companies or cooperation with one of these companies. So in the short term, we will come to the possibility of delivery of complete solutions of all, with the exception of construction. Construction is not our competence.
— A logical step after creating a new product line and solutions "turnkey" would be the development of the service lines of business. Jack Welch, 20, head of General Electric, has admitted in his book that the company servicing power equipment was more interesting and more profitable than its supply. As this is the case in "Power Machines"? It’s important in terms of security: there exploded at the Sayano-Shushenskaya hydroelectric power station, where some strange figures were repairing.
— As for the service, Jack Welch is absolutely right, and the experience of GE says that the service is a highly profitable business. Moreover, the gas turbine can sometimes give away for free, receiving a long service contract. That is profitable for service companies such as GE and Siemens, is comparable to a profit from the sale of a new gas turbine. Therefore, we believe that the service — it is very promising, it is a worldwide practice, and we are actively trying to go in the direction of long-term service agreements.
What prevents the position of customers?
— Including. If the customer says he is not ready for a long-term partnership with us, we respect his position. Sometimes it takes only a consultation, a planned or unplanned repairs to make, any decisions related to improving the efficiency and productivity of the unit. But the long-term service agreement for us, of course, the most convenient way to communicate. We are in fact in this case, give guarantees on the operation of the equipment. We take service and all repairs itself, the customer receives a guaranteed share, an increase of productivity. I think this is a situation where everybody wins.
— So you do have long-term contracts with "RusHydro" or not?
— Not yet. But now we are working with "RusHydro" quite actively working on it and hope for a positive outcome.