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Atommash

Coordinates: 47°30′26.34″N 42°13′25.09″E / 47.5073167°N 42.2236361°E / 47.5073167; 42.2236361
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47°30′26.34″N 42°13′25.09″E / 47.5073167°N 42.2236361°E / 47.5073167; 42.2236361

Atommash
Company typePrivate
IndustryNuclear engineering
Founded1973 (1973)
Headquarters,
ProductsEquipment for nuclear power plants, electrical distribution, electric motors, energy, gas, locomotives, oil, space
OwnerZAO Energomash–Atommash
Number of employees
21,000 (1989)
2,900 (2009)
Websitewww.atommash.ru

Atommash (Template:Lang-ru) is a multidisciplinary engineering company located in Volgodonsk, Rostov Oblast, Russia. It was established in 1973 as a nuclear engineering corporation. Following privatization and bankruptcy in 1999, the industrial facilities of the enterprise are owned and managed by ZAO Energomash–Atommash, a part of the diversified engineering company Energomash.[1]

Manufacturing

1982, Treatment of the interior part of a VVER-1000 reactor frame.

Being one of Russia's biggest industrial complexes and having 6 million m2 of production facilities, Atommash was equipped with unique imported modern equipment, over 80% of which was purchased in Germany, Japan, France, UK, Italy, Austria, Sweden, USA and other countries, from concerns like Italimpianti, ESAB, Varian Associates, Mannesmann AG. In addition to nuclear machinery equipment, Atommash was capable of producing over 1000 kinds of products. Those types of products included, but were not limited to: non-standard metal equipment of large sizes, various metal containers for energy systems (heat-, hydro-, wind power), metallurgical, mining, oil and gas production and processing systems, including ready for use plants for deep processing of petroleum and its residual fractions on the basis of cleaner technologies and processes, compact mini oil refineries with a capacity of 50 to 500 thousand tons per year, mini-factories for recycling and processing of by-products and waste oil, equipment for the construction industry, including equipment for launch pads for missiles and spacecraft, for sea water desalination plants, containers for transportation and disposal of nuclear waste, railroad tank cars for transportation of liquid gas, biomass energy units for reprocessing of agricultural and animal breeding waste into environmentally clean, high-quality fertilizers and methane, etc.[2]

Atommash was capable of producing equipment and products with a wall thickness of 1 to 400 millimetres (0.039 to 15.748 in), diameter up to 22 metres (72 ft), length up to 80 metres (260 ft) and weight up to 1000 tons. Atommash practiced electron beam welding, automatic welding in narrow cutting, automatic welding of nozzles, welding of large-sized products with wall thickness up to 600 millimetres (24 in). It possessed high-end equipment for heat treatment, welding, non-destructive testing (NDT), laboratories for exceptionally complex material testing and test facilities for finished products.[2]

Atommash exported its production to Germany, USA, France, China, Japan, India, Singapore, Bulgaria, Greece, Turkey, Iran, Cuba, Indonesia and others. The company has its own heavy duty mooring berth on Tsimlyansk Reservoir, which allowed shipping bulky and heavy products, which used to be a natural advantage of Atommash over its domestic competition.[2]

In 2009 Atommash re-initiated the manufacturing of equipment for nuclear power plants. It is the Russia's monopolist for manufacturing of melt localization devices for nuclear power plants.[3]

Volume of production and # of employees[4] / Year 1989 1997 2003 2006 2007 2008 2009
Volume of production, mln. rub. - - - 3137,3 3666,4 3451,8 3800,0
Number of employees 21000 5109 4300 2732 2733 2885 2900

Some of the products currently manufactured by Atommash are: refueling equipment and manipulators, spent fuel storages (dry and wet), depleted uranium shielding, lead shielding, condensers, cranes and lifting equipment, specialised doors, heat exchangers, large ferrous components, pool water purification systems, pressure vessels, storage tanks, pumps, valves, nuclear steam supply systems, pressurizers, reactor control rods, drives and mechanisms, reactor internals, reactor pressure vessel seals, containers/casks handling equipment, hydraulic integrated circuits, packaging design and engineering and more.[5]

History

Soviet period: 1975-1991

1977, builders of the future industrial giant

On May 22, 1970 a state committee for the construction of the plant was assembled. On July 8, 1972, official hiring process for workers and engineers willing to take part in the construction was kicked off. On August 30, 1975 the first stilt of the Production Facility #1 was erected. In 1973 the Politburo of the Central Committee of the Communist Party of the Soviet Union made a decision to establish a major nuclear engineering enterprise in Volgodonsk, Rostov Oblast. There were several reasons for choosing Volgodonsk, and above all, the town's proximity to the country's southern deposits of iron and steel. Equally important was the opportunity to utilize the Tsimlyansk Reservoir and the Volga-Don Canal (which connects the reservoir to the Volga) for shipping raw materials, components and assemblies to the plant and delivery of manufactured goods. Russia's internal waterway system made transportation of heavy and bulky items to the regions of the country and the world through the Sea of Azov, the Black and Caspian seas easier and cheaper. Roads, railways and an airport were created in order to support the plant.[6]

1981, a USSR postage stamp: "From Congress to Congress, the production of Atommash goes on"

Capacity utilization planning revealed that electricity generated by three hydropower stations of Volgodonsk is not sufficient. Therefore, it was decided to build the Rostov Nuclear Power Plant. In November 1974, the USSR Council of Ministers approved the technical design of the first stage of the industrial complex, which was originally called "The Volgodonsk Heavy Machinery Plant" (VZTM). Main tasks for the construction of VZTM (renamed to Atommash in March 1976) for the period from 1976 to 1980 were determined. Atommash started producing equipment for the nuclear energy industry in 1977. The cumulative power capacity produced by the company reached 3 million KW by 1978 and 4 million KW by 1979. In 1981, Atommash produced its first reactor for the second unit of the South Ukraine Nuclear Power Plant.[6]

According to the plan of socio-economic development of the region, a whole new city area (the so-called "New City") was built in Volgodonsk in order to support industrial and economical activities of Atommash. Before the construction of Atommash, the population of Volgodonsk was 35 thousand people; in 1981 there were about 135 thousand people living in the city. The expansion of the city area came together with modern residential areas, nurseries, kindergartens, schools, hospitals, shopping centers, cafes and restaurants, laundries, sporting and fitness facilities, theatres, cinemas and more.[6]

The Chernobyl disaster on 1986 and the Dissolution of the Soviet Union decreased the number of orders for the nuclear equipment, and the company had to expand the assortment of manufactured goods.[7]

First years of the post-Soviet period: 1991-1994

Like most Russian industrial enterprises, Atommash suffered greatly from the collapse of the Soviet Union. In 1991, the enterprise did not have enough finances to pay salaries to the 20,000-man staff. The Chernobyl disaster caused decrease of orders for the nuclear equipment: orders dropped to 15% of the Soviet era volume. The company had two options for survival: find customers outside Russia and/or adopt manufacturing of a broader scope of goods.[8]

Bankruptcy of 1995-1999

According to Decree #1546-p of the Chairman of the Council of Ministers of the Russian Federation Government Viktor Chernomyrdin dated 30.08.1993, in order to preserve unique facilities of Atommash and other industrial companies of Volgodonsk, low-interest earmarked loans were allocated.[9] However, in 1994 those loans were redirected to commercial structures and only then offered as loans to Atommash, but this time at exorbitant interest rates. For example, from July to August 1994, Atommash OJSC was forced to take commercial loans issued by Commercial Bank Doninvest at 216% interest per annum.[10][11]

On 21.05.1996 Viktor Mikhaylov, Russian Minister for Atomic Energy, wrote an official letter D-M-27/4-01 to Vladimir Gusev, the Chairman of the Committee for industry, construction, transport and energy of the Russian State Duma. In his letter, Mikhaylov says that, according to Instruction P-593ns of the Russian Government dated 04.10.1995, the Ministry of Atomic Energy (MinAtom) made a proposal to the Federal Agency for State Property Management (Goskomimuschestvo), Federal Agency for Bankruptcy Proceedings and the Government of Rostov Oblast to convert the "golden share" into an ordinary stock and keep the unsold shares of Atommash OJSC in the federal property for up to 3 years. However, this proposal was not accepted, and the Ministry of Atomic Energy lost all control over the activities of Atommash OJSC. Hence, writes Mikhaylov, having decided to introduce external management on Atommash OJSC and having declined MinAtom's proposal, the three aforesaid agencies - Goskomimuschestvo, Federal Agency for Bankruptcy Proceedings and the Government of Rostov Oblast - took full responsibility for the future fate of Atommash.[12]

The financial recovery plan introduced as of November 29, 1995 by the decision of the arbitrary court, brought no results as jobs continued declining and social tensions were increasing. The Russian Ministry of Atomic Energy proposed the following action plan to save the enterprise:

  • Write off the debt on loans of Atommash owed to the Ministry of Finance of Russia (22 billion rubles), as well as respective interest and penalties as of September 1, 1996.
  • Release Atommash from paying all kinds of taxes to the federal and local budgets from September 1, 1996 to December 31, 1997.
  • Offer an installment plan (layaway) from January 1, 1998 to December 31, 2000 for the current accruals to the budgets of all levels.
  • Sell the unsold 30% shares of Atommash to private shareholders under investment conditions.[13]

However, those actions were not taken. The Arbitrary court of Rostov Oblast appointed Alexander Stepanov the external manager (bankruptcy referee) of Atommash OJSC. At the time, Stepanov was First Vice President (and, since 1996, CEO) of Energomashcorporation (EMK) JSC, a direct competitor of Atommash. Stepanov's appointment was actively lobbied by Tatiana Gramotenko, the Chief agent for bankruptcy proceedings in Rostov Oblast.[14] Several Founders of EMK JSC were direct competitors of Atommash OJSC, which was a violation of the Russian antitrust law. The audit conducted by the Audit Chamber of Russian Federation showed that in a matter of one year EMK, controlled by its CEO Stepanov (at the same time the bankruptcy referee of Atommash OJSC), managed to buy 10.8% share in Atommash OJSC and more than 40% of its debt, which, according to the competition law, clearly poses a conflict of interest.[15]

Governor of Rostov Oblast Vladimir Chub used the letter of MinAtom of Russia №03-2739 from 12.09.1996 in Stepanov's interests. In his appeal № 1/6049 to the General Director of the Federal Agency for Bankruptcy Proceedings Peter Mostovoy, Chub asks to write off, through the reduction of capital surplus, the value of specific fixed assets and objects under construction of Atommash OJSC for an amount of 878 billion rubles.[16] This led to a reduction of company's assets, the book value of which was already drastically reduced. Governor Vladimir Chub had no authority to address the General Director of FABR Mostovoy with a request to approve markdowns and write-offs of assets, which were a legitimate property of thousands of rightful shareholders, of which Russian Federation with its 30% share was the biggest.

Apart from the reduction of the asset value of Atommash, its workshops and equipment were leased to various limited liability partnerships (LLP) on conditions that were extremely disadvantageous to Atommash. LLPs, owned by the corrupt external management of Atommash, obtained strategic raw materials, components and semi-finished products at extremely low prices. Products manufactured by those LLPs on the territory of Atommash, were sold at a profit for the LLPs, while the damage (losses) was reflected on the balance sheet of Atommash OJSC. Colossal non-core assets and vast territories of Atommash, including agricultural companies with their land, were also alienated.[17]

According to the Plan of the Bankruptcy referee of Atommash OJSC Alexander Stepanov, a new company called EMK-Atommash JSC was created (Protocol #3 of the Meeting of creditors of Atommash OJSC of 22.11.1996). The new company had two founders: Atommash OJSC (85,7% of charter capital) and Stepanov's EMK (14,3%).[18] In January 1997, 70% of the assets of Atommash were transferred to EMK-Atommash JSC. Atommash OJSC contributed its liquid assets (fixed assets, current assets, intangible assets) and production assets to the charter capital of EMK-Atommash JSC. Illiquid assets (construction in progress, industrial sites, railways, etc.) remained on the balance sheet of Atommash OJSC. After that, EMK-Atommash JSC stock was transferred to EMK JSC.[15][19]

Alexander Stepanov, now the CEO of "Energomashinostroitelnaya corporatsiya" OJSC and at the same time the Bankruptcy referee of Atommash OJSC, wrote a letter on 05.05.1997 to the First Deputy Minister for Atomic Energy Lev Ryabev, saying he had understood the concern of MinAtom about the financial state of Atommash, and therefore suggested to work together to support EMK-Atommash JSC. In this letter Stepanov tried to convince MinAtom that there was no reason for worries, since the production facilities of Atommash were preserved, technological routines for manufacturing of core production were uninterrupted, and the establishment of EMK-Atommash JSC would not lead to restraint of competition. According to Stepanov's letter, the fact of trading liquid assets of Atommash OJSC for EMK-Atommash JSC stock would give the nearly bankrupt company a chance for a settlement with creditors. At the same time Stepanov, head of both companies, positions liquid assets which Atommash OJSC contributed to the charter capital of EMK-Atommash JSC as long-term investments.[20]

In reality, however, the "Plan of external management and financial recovery on Atommash OJSC for the period from 29.11.1995 to 29.05.1997" did not lead to stabilization. Jobs were cut dramatically, wages were not paid, social tensions were spreading across the entire Volgodonsk city.[13] While the assets of Atommash (through write-offs) and their value (through markdowns) have been reduced sharply, accounts payable, which were growing exponentially, started looking significant in comparison. As a result of the obviously inefficient external management on Atommash OJSC, the Arbitrary Court of Rostov Oblast made a decision to recognize the company bankrupt. Formally, Atommash OJSC was forcibly liquidated as a legal entity on 25.11.1999.

Hence, the bankruptcy of Atommash OJSC was, in practice, carried out in the interests of EMK-Atommash JSC which inherited all liquid assets and production facilities of Atommash OJSC.[21] After the forced liquidation of Atommash OJSC, its unique industrial complex was controlled by several affiliates of EMK-Atommash JSC, including Energomash-Atommash LLC and, finally, Energomash-Atommash JSC of the Energomash group.[18]

The bankruptcy of Atommash OJSC was inspected by the Audit Chamber of Russian Federation at the request of the Committee for industry, construction, transport and scientific technologies of the State Duma of Russian Federation #3.11-21/1312 dated 21.10.2000. This audit showed that, with the complicity of specific officials, the State suffered colossal material damage. In particular, the State lost a 30% stake in Atommash OJSC. The purpose of the bankruptcy of Atommash OJSC was to deprive its majority shareholders - the State itself and Concern YACONTO JSC (Russia, Moscow) - of their property, and therefore, of control over the economic, financial and production activities of the industrial giant. As a result of the Audit, the College of the Audit Chamber of Russian Federation issued a Definition #6(289) dated 22.02.2002.[15]

... we could not save Atommash. Having found itself in free market without the support of the industry, this flagship of nuclear engineering fell into an economic abyss and still cannot recover. It is regrettable that the Atommash team did not rebuff a group of people doing questionable personal socio-environmental career by fighting with the construction of the Rostov nuclear power plant and slandering against the Russian nuclear energy and industry. Today, when the Volgodonsk NPP has been launched, they are cowed. But the harm they did to the citizens of Volgodonsk and the entire Don Territory remains on their conscience - that is, if they have one. <...> I was hurt by the privatization of Atommash which occurred without having consulted the federal Minister, by law and order of the regional governors, who though that people working in the nuclear industry are a milking cow that doesn't require any investments. That's how the country lost its nuclear engineering flagship.

— Viktor Mikhaylov, Russian Minister for Atomic Energy in (1992-1998) interview of 2008, [22]

On 25.12.2009 the Deputy of the Russian State Duma Anatoly Lisitsyn sent a letter (ref. LIS-767/GD) to Vladimir Putin, the Prime Minister of Russia at the time, asking to conduct an independent investigation of the bankruptcy of Atommash OJSC on the basis of the audit conducted by the Audit Chamber and the Definition issued by its College.[23] The Deputy Prosecutor General of Russia Viktor Grin replied on 01.02.2010 to the State Duma that the bankruptcy of Atommash OJSC has been verified by the investigation department of Volgodonsk police. However, the police did not take the materials of the Audit Chamber into account, therefore, their resolution "not to initiate criminal proceedings" was cancelled and another inspection prescribed. The second inspection did not bring any result either.[14] Dissatisfied with the result, on 21.12.2010 the Deputy of the Russian State Duma Anatoly Lisitsyn sent a letter (ref. LIS-1282/GD) to the President of Russia Dmitry Medvedev, asking to order the respective authorities to secure Russia's national interests by assisting the Presidential Control Directorate in their inspection (ref. A8-6296-5 dated 02.11.2010) of the unprecedented premeditated bankruptcy of Atommash OJSC.[24] As a result, on 08.07.2011 President Medvedev issued a Decree (ref. Pr-1948), ordering Prime Minister Putin to consider purchasing the facilities of Atommash so they can be managed by Rosatom and at the same time ordering Rashid Nurgaliyev, Russia's Minister of Internal Affairs at the time, to conduct another verification of the bankruptcy of Atommash OJSC, as per the materials presented by the General Prosecutor's Office and take action as appropriate.[25][26]

Modern period (2000-2012)

The restructured Atommash became multidisciplinary. The company started manufacturing technical equipment including the single, one-of-a-kind items. For example, a 140-ton vehicle for lifting the rocket and putting it on a launcher for the Sea Launch project was manufactured on Atommash.[27]

The footing for a reactor at Bushehr was manufactured at Atommash in 2001.[28]

Since 2002 the facilities are utilized for mass production of gas turbines for small capacity CHP plants (up to 36 MW). By 2003, the number of employees on the company shrunk to 4,300 with the volume of output of 1.4 billion rubles. In 2004, the company's management announced a four-fold reduction in output for the nuclear energy and the orientation of the main production to consumers in the gas industry.[29] In 2009 Atommash re-initiated the manufacturing of equipment for nuclear power plants.

In May 2010, VTB bank (Russia, Moscow) filed a petition with the court, asking to initiate bankruptcy proceedings for "Energomash-Atommash" LLC. As per the petition, the debt of the enterprise to the Bank is 356,5 million rubles (about $12 mln). The total debt of Energomash Group to VTB exceeds 1 billion rubles ($30 million). The total debt of Energomash Group to all Russian banks combined is estimated at nearly 30 billion rubles ($1 billion). Liquid assets, primarily, production facilities of "Energomash-Atommash" LLC were transferred to a new legal entity - "Energomash-Atommash" JSC.[30]

On 18.10.2011 Deputy of the Russian State Duma Anatoly Lisitsyn appealed to Russian President Dmitry Medvedev (ref. LIS-1676/GD)[31] asking to support the proposal of YACONTO LLC, the legal successor of Concern YACONTO JSC and the majority shareholder of Atommash OJSC, to restore the status quo of Atommash OJSC) through the implementation of the so-called "Project-A" or an alternative option as per the letter of YACONTO LLC to the Russian President Dmitry Medvedev (ref. №111018-A01 from 18.10.2011).[32] In his reply from 06.04.2012 №1-13/12160 to the letter that YACONTO LLC sent to President of Russia Dmitry Medvedev on 27.02.2012 (ref. №120227-А01),[33] the Deputy Chief of Rosatom Nuclear Energy State Corporation Kirill Komarov says that Rosatom shares the shareholder's concern about the current state of Atommash, since the facilities of the latter, still one of the biggest power engineering companies in Russia, are used to produce equipment for the nuclear industry.[34] The letter of Rosatom also indicates that "Project-A" is within the competence of the Federal Agency for State Property Management (Rosimushchestvo), since, according to the Decree of the Russian Government N432 of 05.06.2008, Rosimushchestvo is responsible for protection of legitimate interests of Russian Federation when it comes to state property management.[35]

Ownership

After privatization, Atommash was a joint-stock company; 30% of the shares were controlled by the state. The remaining 70% interest belonged to private persons and companies. Concern YACONTO JSC (an industrial conglomerate headquartered in Moscow) was the second largest shareholder of Atommash OJSC after the State itself, holding 28.5% shares as of 1997. The Board of Directors included 9 members.[31][2]

Interesting facts

  • Vladimir Vinogradov, an oligarch who was ranked 12th in the list of the top 20 richest Russians in 1996, worked on Atommash as a construction engineer from 1979 until 1985.[36]

References

  1. ^ World Nuclear Association - Russia's Nuclear Fuel Cycle (Updated 31 March 2012)
  2. ^ a b c d A letter from Russian Ministry of Atomic Energy to a foreign investor of 21.01.1997 translation
  3. ^ Company's official website (rus)
  4. ^ 2006-2009 data from the official presentation of the entperise
  5. ^ International Nuclear Academy - Supplier information
  6. ^ a b c "IA - ATOMMASH" by S. Sadoshenko. Moskva, "Plakat", 1987 (pages 3-6, 10, 38). Library of Congress code DK651.V557 I18 1987
  7. ^ Energomash-Atommash: Company profile
  8. ^ JPRS report: Soviet Union economic affairs - 10 July, 1991
  9. ^ Decree of the Chairman of Council of Ministers of RF No 1546-p dated 30.08.1993 translation
  10. ^ Reconciliation Statement of accounts payable by Atommash OJSC to CB DONINVEST - 22.07.1995translation
  11. ^ A letter from Commercial Bank "Doninvest" to the Board of Directors of Atommash OJSC - 31.07.1995translation
  12. ^ A letter of the Minister for Atomic Energy D-M-27/4-01 dated 21.05.1996translation
  13. ^ a b Letter of the Russian Ministry of Atomic Energy to officials dated 12.09.1996 translation
  14. ^ a b A letter from the Prosecutor's Office of Rostov Oblast to YACONTO LLC dated 15.11.2011 translation
  15. ^ a b c Report of the Audit Chamber of RF on the bankruptcy of Atommash OJSC dated 22.02.2002
  16. ^ A letter of Governor Vladimir Chub №03-2739 from 12.09.1996translation
  17. ^ "Atommash is not ours anymore?" / "Soviet Russia" newspaper, №2 (13364) of 14.01.2010(Russian)
  18. ^ a b "A very illusory investor" / "Novaya Gazeta" newspaper, 17.07.2000(Russian)
  19. ^ "A taste for bankruptcy" / "Nezavisimaya Gazeta" newspaper, 13.12.2011
  20. ^ A letter of A. Stepanov (bankruptcy referee of Atommash) of 05.05.1997(translation)
  21. ^ A Contract Bankruptcy / "Novaya Gazeta" newspaper, #66 of 11.09.2000
  22. ^ Viktor Mikhaylov, Ya - "yastreb" (I am a "hawk"), Rosatom's Institute of Strategic Stability, 4th edition, 2008, ISBN 978-5-7493-1287-4, 408 p.
  23. ^ A letter of the Deputy of Russian State Duma Anatoly Lisitsyn to Prime Minister Vladimir Putin - 25.12.2009 translation
  24. ^ A letter of the Deputy of Russian State Duma Anatoly Lisitsyn to President Dmitry Medvedev - 21.12.2010translation
  25. ^ Presidential Decree of Dmitry Medvedev #Pr-1948 dated 08.07.2011translation
  26. ^ Order of the Russian Prime Minister Vladimir Putin VP-P7-4798 dated 13.07.2011translation)
  27. ^ Atommash targets space/ News of cosmonautics № 24, 1997 (rus)
  28. ^ [Vyacheslav Bondarenko, "Russia: First Segments of Nuclear Power Plant Sent to Iran," ITAR-TASS (Moscow), 12 January 2001].
  29. ^ Atommash turns away from civilian nuclear/ Commersant, №22 (2861), 07.02.2004 (rus)
  30. ^ Atommash will pay for other's debts, "Kommersant" newspaper #85(4383) of 15.05.2010(in Russian)
  31. ^ a b A letter of the Deputy of Russian State Duma Anatoly Lisitsyn to President Dmitry Medvedev - 18.10.2011(translation)
  32. ^ A letter of YACONTO LLC to the Russian President Dmitry Medvedev - 18.10.2011translation
  33. ^ A letter from YACONTO LLC, the majority shareholder of Atommash, to Russian President Dmitry Medvedev - 27.02.2012translation
  34. ^ A letter from Rosatom Nuclear Energy State Corporation dated 06.04.2012 ref. №1-13/12160translation
  35. ^ Federal Agency for State Property Management (Decree N432 of 05.06.2008 avail only in Russian)
  36. ^ "Obituary: Vladimir Vinogradov: Pioneer of private banking in Russia". The Times. July 6, 2008.