Gazprombank sold the industrial site of Izhora Plants to Rosatom

Gazprombank (GPB) closed a deal to sell to Atomenergomash (AEM, the machine-building division of Rosatom) the production facilities of the Izhora industrial site. The bank announced this on August 25.

The release clarifies that the perimeter of the transaction included capacities “involved in the production of equipment for the nuclear industry and petrochemicals.” Other parameters, including the amount, the area of ​​the sold asset and the list of equipment, are not disclosed by the parties.

The source of Vedomosti, familiar with the details of the transaction, clarifies that we are talking about the purchase of an enterprise (land and equipment), and not about the acquisition of the legal entity PJSC Izhorskiye Zavody, which remains with GPB.

The Izhora industrial site is located in the southeast of St. Petersburg in the Kolpino district. This is the second largest industrial area of ​​the city after Shushary with an area of ​​more than 1,000 hectares. But Izhora Plants, which is one of the oldest industrial enterprises in Russia, founded in 1722, owns only a part of this site, according to various estimates, from several tens to several hundred hectares (the representative of Izhora Plants could not specify the size of the enterprise area). Part of the industrial site is occupied by the structures of the OMZ machine-building group belonging to GPB, and part is leased. According to SPARK, more than 200 legal entities are registered at the Kolpino industrial zone.

In 2020, Izhora Plants received 750.8 million rubles. net profit under IFRS against a loss of 27.3 million rubles. for 2019, revenue grew by 37%, to 8.99 billion rubles, follows from the reporting. In the first six months of 2021, the company earned 164.1 million rubles. profit and almost 4 billion rubles. revenue (no IFRS data available for full 2021).

The Izhorskiye Zavody website states that the company manufactures equipment for nuclear power plants (vessels for VVER-type reactors) and petrochemicals, as well as special steels (OMZ-Special Steels is included) and welding consumables (Izhorskiye Welding Materials LLC).

Representatives of GPB, its OMZ group, Rosatom and AEM could not specify which capacities were purchased. But in an interview with Interfax on August 25, AEM CEO Andrey Nikipelov said that as a result of the deal, AEM “has got a branch of AEM-Spetsstal, which provides the machine-building division and other Russian consumers with blanks, and a branch of Izhora, involved in the manufacture of reactor equipment and equipment for oil and gas. Both of them became part of the AEM-technologies subsidiary of Atomenergomash.

The GPB report notes that the transaction took place as part of the strategy of “phasing out investments in non-banking segments.” In mid-June, as Vedomosti wrote, the OMZ group controlled by GPB sold the Czech nuclear engineering company Skoda JS, experts estimated the size of the deal at $50-70 million.

Sergey Grishunin, managing director of the NRA rating service, estimates the current deal to buy out the assets of Izhora Plants at 5.1-5.7 billion rubles.

“The inclusion of the production facilities of the Izhora industrial site in the Rosatom circuit is in the interests of both parties and will effectively solve the strategic tasks of the nuclear industry both domestically and abroad,” said Alexander Stepanov, Deputy Chairman of the Board of GPB, whose words are quoted in the release.

“Rosatom» has been consolidating assets in the field of nuclear engineering on the basis of AEM since the early 2010s. (in Soviet times, these plants were located outside the nuclear industry and began to be assembled into a single division only after the creation of a state corporation). Until this period, Izhora Plants remained the only supplier of VVER reactor vessels. Another large enterprise of nuclear engineering – Volgodonsk “Atommash” – after the collapse of the USSR fell into private hands and was redesigned.

Rosatom tried to compete with Izhora: the production of reactor equipment was launched from scratch at Petrozavodskmash, bought in 2011, the cost of which in 2011 was estimated at 80 million euros. The state corporation later also acquired a stake in Energomashspetsstal in Kramatorsk, a competitor of OMZ-Spetsstal.

And in 2013, Rosatom’s external suppliers lost another segment: the hull equipment for RITM-200 reactors (installed on nuclear icebreakers and floating power units) began to be supplied by the ZiO-Podolsk plant owned by the state corporation. In addition, Atommash also joined the Rosatom circuit. As a result, now AEM has consolidated almost all major assets of nuclear engineering in Russia.

Today, AEM manufactures the main blocks of the reactor compartment of the nuclear power plant, as well as the turbine hall. The perimeter of the division also includes enterprises producing equipment for thermal power engineering, petrochemicals and shipbuilding. Nikipelov said in an interview that from 2018 to 2021, AEM’s investment in “improving the efficiency and expanding the competencies of existing facilities” reached about 26 billion rubles. AEM’s revenue for 2021, according to him, amounted to 106 billion rubles, and this year it should grow to 130 billion rubles.

As Vedomosti wrote in July 2021, AEM Technologies intends to dramatically increase its investment program in the coming years. The company’s CEO Igor Kotov said then that in 2021-2023. it will be 1.6 times higher than the capital expenditures for the previous three-year period (2018–2020) and almost 6 times higher than the investment program for 2015–2017. Kotov explained to Vedomosti that the completion of the investment cycle is synchronized in time with the planned peak in the utilization of production capacities of AEM machine-building plants, which is expected in 2023–2025. It is during this period that the main shipments of equipment for the Akkuyu nuclear power plant located in Turkey and the Tianwan and Xuydapu nuclear power plants in China will fall.

Grishunin adds that Rosatom is consolidating machine-building capacities “to complete the full cycle” of nuclear engineering products. “The Russian company remains the only non-Chinese full-cycle player capable of producing and operating plants of any type, from classic VVERs to fast neutron reactors,” he said.