business & opportunities in the chinese nuclear power market · supply chain that can be...
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24 April 2015
Business & Opportunities in
the Chinese Nuclear Power Market
Manchester China Forum November 2014
Arnaud Lefevre [email protected], T+4126 5140517, C: +41 76 588 09 66
24 April 2015
Who is in my league?
• Largest market in the world (26 NPP in construction)
• Largest new projects (6 NPP approved in 2014)
• Largest diversification of Technologies (PWR/ Candu/ Gas Cooled/ Sodium cooled)
• Largest investment in the closed fuel cycle
• Main business agreements with France, USA, Russia and Canada
• Overseas development in Pakistan, Argentina, Romania and UK
• Acquisition of mines in Namibia, Niger, Australia, Kazakstan, and Uzbekistan
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• Large local supply chain (203 leading factories)
• 18 Engineering and Design Institutes
• Involvement in the overall design and manufacturing chain
• However 92% do not have ASME stamp
The home team
Do you fit in my market?
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!
Market versus Strategy
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• 650 Billion CNY of new investments already approved (source CNNC)
• 85% localization rate for Gen II+, and 60% for Gen III
• Services or products? • Supply to EPC,
Research centers, Operators, and local manufacturers
The naughty boy: NNSA
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• Originally a subsidiary of CNNC
• Low budget • Highly political • More regulations with
HAF 604 vs. 601 • New regulations for
non safety products • Control of import:
protectionism
All your friends joined the party
0 20 40 60 80 100 120
Czech
Luxembourg
Romania
Belgium
India
Ukraine
Switzerland
Sweden
Canada
Austria
Spain
South Korea
UK
Italy
Japan
Russia
Germany
USA
France
Czech 0%
Luxembourg 0%
Romania 0%
Belgium 0%
India 0%
Ukraine 1%
Switzerland 1% Sweden
1%
Canada 1%
Austria 1%
Spain 2%
South Korea
2%
UK 3% Italy
4%
Japan 5%
Russia 15%
Germany 16%
USA 19%
France 29%
The bride is waiting…
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CNNC SUFA Technology Industry Co., Ltd. Valve Flowserve (USA) & Darda
Dalian Danai Pumps Co., Ltd. Pump Flowserve (USA) & Darda
Dalian Deep Blue Pump Co., Ltd. Pump Lewa & Moyno Pumps (USA) & Hermetic Pumpen
Dalian Hermetic Pump Co., Ltd. Pump Hermetic Pumpen (GER)
Dongfang Areva Nuclear Pump Co., Ltd. Pump Areva (FR)
Jiangsu Biaoxin Jiubaotian Industrial Co., Ltd. Pipes and pipe fittings Kubota (JAP)
Nanjing Sun Tola Ripple Tube Co., Ltd. Ripple tube expansion joint Technoflex &Tola (JAP)
Shanghai Cable Factory Cable Fujikura (JAP)
Shanghai Yidian Foxbolo Co., Ltd. Cabinets Foxboro (USA)
Shanghai KSB Co., Ltd. Shanghai Electric Pump KSB (GER)
Shenzhen Shiyingda Pipeline Co., Ltd. CNNC 23 Pipes and pipe fittings Spie Thermatome (FRA)
Xi'an Nuclear Instrument Factory Sensor Honeywell (USA)
Yantai Taihai Manoir Nuclear Equipment Co., Ltd. Pipes and pipe fittings Manoir Industries (FRA)
Sulzer (Dalian) Pumps&Compressors Ltd. Pump Suzler (CH)
HOPPECKE Power System (Wuhan) Co., Ltd. Battery Hoppecke (GER)
Pall Filtration (Beijing) Co., Ltd. Pressure vessel Pall (USA)
Shanghai Morimatsu Pressure Vessel Co., Ltd. Pressure Vessel and Heat exchanger Morimatsu (JAP)
Dalian Hitachi Machinert Equipment Co., Ltd. Pressure vessel, Heat Exchanger and Gate Hitachi (JAP)
Dalian Diguo Canned Motor Pump Co., Ltd. Pump Teikoku Electric (JAP)
Increase of localization 2006-‐2014
China 47%
France 23%
Misc 8%
USA 7%
UK 6%
Germany 5%
Japan 1%
Austria 1% Italy
1% Switzerland
1%
China 79%
Germany 8%
UK 5%
France 2%
USA 3%
Japan 3%
Biddings 2006-‐2014
Biddings since January 2013
• 38% of foreign companies listed by the NNSA are established in China ( source DPS)
• 35% of staff change jobs over 2-‐4 years (source: Hays)
• Chinese Employees Witness Average Salary Increase of 8.5% and 14.3% (source: Hewitt)
A local team… but cost are rising
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80% of all foreign firms in China were unionized by the end of 2008.
€ '0 € '500 € 1'000 € 1'500 € 2'000 € 2'500 € 3'000 € 3'500 € 4'000
Sales manager
Office
Transport
Assistant
Casher
Allowance
Misc
None 58%
Office 38%
Rep 4%
• Your website in Chinese ( 33%)
• Technical documents in Chinese (18,8%)
• Newsletter or E-‐ Magazine (16%)
• Member of a lobbying group or Chamber of Commerce (12,3%)
• Use of Wechat and local application (9,6%)
Communicate!!
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UK companies in this market
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UK companies shown in a better way
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• Remodeling of the key players
• Create National Champions
• The education market is burgeoning
• The reprocessing business is not born yet
• ACP100 Supply Chain
Where is the business?
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• 821: Decommissioning of
Military facility in Sichuan, not open to foreign companies
• 401: Decommissioning of HWR with a budget of IAEA
And that is all!
Forget projects in decommissioning
• Three traditional operators looking for foreign and domestic supply chain and experts.
• SNPTC and CPI merger will create new opportunities in the AP1000 and CAP1400 projects.
• Three Gorge group invests in the inland nuclear power plants with each traditional operator (Yangtze Power Co.).
0
5
10
15
20
25
30
35
40
45
2014 2015 2016 2017 2018
CNNC CGNPC Huaneng CPI
CNNC 40%
CGNPC 36%
Huaneng 5%
CPI 19%
Three adults and two toddlers
• CGN has a long history with the Areva and EDF, but the French cannot cover all the needs of the holding. Ex: Ovivo (UK) supplies water treatment systems for Daya Bay.
• CGN needs support in the fuel cycle, such as design and manufacture of line of production of nuclear fuel.
• CGN wanted to export its ACPR1000 and remains constraint to Areva’s IP of the M310 reactor: new solution with the Hualong.
• CGN wants to create a manufacturing for BORON and avoid the monopoly of US firms.
CGN: “I am the cash machine”
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• CNNC covers all the nuclear power market and its EPC, CNPE has good relation with the UK industry. The partnership with overseas nuclear groups is right now the strategy of CNNC.
• Before 2020, CNNC will create a strong supply chain that can be trusted overseas (Ex. IOM, the subsidiary of Invensys, is black listed from future domestic and international projects).
• CNNC needs support in operation management, maintenance, tooling and logistic for its subsidiary CNPO (AMRC could partner with CNPO).
CNNC: “I want your technology”
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• Westinghouse signed a strategic partnership with SNPTC. However, several US companies frustrate SNERDI and SNPEC (Ex. EMD for the RCP, Lockheed Martin for the DCS). SNPTC is the key player for the international market and needs to expand its partnership and need to increase the localization rate.
• SNPTC is looking to acquire mines of uranium, and needs to create an expert team for overseas prospection.
• SNPTC wants to launch its own small modular reactor (a first MOU was signed with Westinghouse).
• Note: Sheffield Forgemasters is a subcontractor of Curtiss-‐Wright Flow Control for the AP1000 in Sanmen NPP and will get orders for others reactors in China.
SNPTC: “would you be my friend?”
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• NDRC plan : SOE go global
• CAP1400 & Hualong • China and Argentina
example • Decommissioning and
waste management • Acquisition of local
manufacturer and service company
Hunt with your Chinese partner
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International prospection
Involve SOE in overseas projects
What can this forum do for you?
Build a consortium Examples: • France China
Electricity Partnership (PFCE)
• Spanish Nuclear Group for Cooperation (SNGC)
• Organization Canadian Nuclear Industry (OCI)
• China Nuclear Energy Association (CNEA)
Budget for Market intelligence
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• You can use an established network
• You can promote directly to the end user
• You meet your peers, partners, buyers and competitors in specific seminars
• You bring back opportunities on UK soil
Increase your brand awareness in China
24 April 2015
Peter Drucker
“Action without thinking is the cause of every failure”