Could you briefly present your career path ?
I have graduated from HEC School of Management, and started my career in finance, more particularly in control, for Cogema (now called Areva NC). I have been 4 years in Africa, and 6 years in the United States. Then I came back to France, and during 20 years I have occupied several positions. Among others, I was Deputy Financial Director of Cogema, in charge of foreign subsidiaries, and later worked in general management. In 2000, the Mining Business Unit was created, and I was director during 4 years. In 2004, I supervised the activities of Mining, Chemistry and Enrichment. Then in 2006, Anne Lauvergeon offered me to go to Japan as President of AREVA Japan.
AREVA Japan, Toranomon Office
Could you describe the activities of AREVA Japan ?
Japan is a very important and strategic country.
For the last 30 years, the main activity of AREVA Japan was based on sales, and still is today. The overall annual sales is over 600 millions euros, which represent almost 10% of AREVA’s nuclear turnover. What we sell is essentially related to products and services in the fuel cycle (uranium, conversion, enrichment, fuel) and in the back end (reprocessing, MOX ), along with transfer of technology. To achieve this, AREVA Japan provides all kinds of support : logistics, counseling, local contact…
The second activity, more recent, is purchasing. Japan is also a supplier for many kinds of equipments. We work with our strategic partners Japan Steel Works, the world main forger, and MHI, for the manufacturing of equipments that are installed in our nuclear power plants (e.g. the Olkiluoto EPRTM reactor vessel). We have signed a long term agreement with JSW in 2008, which was decisive in JSW decision to invest in new production tools. For this agreement, AREVA Japan took a strong role and we served as intermediaries, in order to coordinate and facilitate the cooperation.
The third activity concerns partnerships, in particular with MHI, started 3 years ago. This cooperation is based on a very practical approach, consisting in finding areas where we both have interests in working together. ATMEA is the first output of this partnership. It is an AREVA and MHI 50/50 Joint Venture, meaning the management is perfectly balanced between Japanese and French side, a somehow unique scheme. We have pursued the partnership on other fields, such as GNEP initiative in the USA, for which we have provided a common proposition with MHI. More recently, we have decided to take a participation in the Japanese company named MNF (Mitsubishi Nuclear Fuel) that manufactures UO2 fuels for PWR (pressurized Water Reactor). And I should not forget to mention the 20 years old cooperation we have with JNFL to whom we transferred our La Hague reprocessing plant technology. On the other hand, Kansai EPCO and Sojitz have taken a participation on GB2 (George Besse 2 Enrichment Plant), up to 2.5%. This reveals another type of cooperation, in which we open our projects to Japanese companies.
The last activity of AREVA Japan is the strategic monitoring of activities in Japan. Being an important player in the worldwide nuclear industry, it is important for AREVA to be well informed on Japanese activities.
Source : AREVA in Japan, press kit
The cooperation with JNFL to build the Rokkasho Reprocessing Plant has been a great success for AREVA. What is the current status ?
On the one hand, we have completed our mission, which was to provide the technology, to train the engineers, supply the equipments. The reprocessing plant is completed, and the main plant has been tested, and works very well. All the guarantees that we gave have been closed. And yet, the plant is not in operation. This is not our responsibility, because the problem comes from the vitrification facility, which uses a Japanese process, which goes through several difficulties and is not yet operable. We are unsatisfied by this situation, because we sincerely wish the success of JNFL in operating the plant, and if there is anything that we can do to help, we are more than willing to do so.
Independently, we will always keep close touch with JNFL, and I believe JNFL thinks the same way, because we still have much to share and improve for our reprocessing facilities.
What was the context that lead AREVA and MHI to work together ?
AREVA has always maintained a partnership strategy. This is based on the idea that although our company offers integrated solutions, we will not systematically do everything by ourselves, and let other companies who are good at that do the job. For example, AREVA could invest in the Creusot, multiply the capacity by 3 or 4 to be able to manufacture by itself all the equipments needed to construct a nuclear power plant, but this is not our strategy, we believe it is best to rely also on other groups who are good in that field, such as JSW or MHI which have very specific know-how. There were other projects in which we worked with MHI, such as Rokkasho Reprocessing Plant. For that we have even built a joint venture, RECO, which has performed very well. We both feel that we are two companies with the same culture.
We know each other quite well, and the basic background was favorable for a broader partnership.
The opportunity was given in 2006 by the purchase of Westinghouse by Toshiba. This was totally opposite to the historical structure of NPP makers in Japan, in which the natural partner of Westinghouse in Japan was MHI. This event created a trauma and lead to significant changes in global alliances. Toshiba, by buying Westinghouse, became an important actor that is capable of producing PWR (Westinghouse) and BWR (Toshiba). Hitachi chose to team up with GE by merging their nuclear division, which was an interesting move. MHI needed therefore to find another international partner, to expand its activity worldwide. It was then natural to begin a broader partnership with AREVA.
Changes in the world’s major makers of nuclear power plants (Source, METI 2006)
The first idea was to find a common project in which we could start working together. This was provided by the necessity in both companies to develop a mid-sized reactor, ATMEA1TM. AREVA and MHI both have their own large size reactor, the EPRTM and APWR but not any mid-sized reactor. The development of such a reactor costs a lot of money, being two companies divides the costs by half, the risks by half, and allows taking benefits of both experience.
ATMEA was in a way the first step in the partnership. Are there any other outputs of the partnership ?
The partnership with MHI is practical, subject per subject. We take our time to know each other, and MNF came like that, very naturally. Initially, Mitsubishi Materical Corporation (MMC) had a factory based in Tokai in the 60s, and produced the fuel designed and sold by MHI, then MNF was funded in 1971. This organization was not satisfactory, and MHI planned to change it. AREVA’s activities, on the other hand, was limited to services in the fuel cycle, but faced great difficulties on the fuel market. By discussing openly these problems (3 years ago, it would have been impossible to even think about it), the idea of having AREVA participate in the company provided a solution for both parties.
MNF shareholders, before(inner ring),and after February 2008 (outer ring)
We will provide MNF with BWR technology, and, with 35% of the global share in the fuel business, we can provide MNF with important support to expand their activities. And for AREVA, we are now producing fuel for the Japanese (and international) market through a Japanese company. It is a very good way to enter the Japanese market.
In the same way, we will soon take participations in Zircoproducts for Zirconium, with Sumitomo and Kobe Steel. (Note : since September 10th, CEZUS, subsidy of AREVA owns 33.3% participation in Zircoproducts, acquired from Sumitomo Metal Industries and Kobe Special Tube).
I think we succeeded because we managed to get ourselves in the Japanese shoes. The companies related to the nuclear industry is far too strategic for Japan to be owned by a foreign country, but in these cases, where the situation is win-win, it works.
Do you have a message for the Young Generation ?
I believe it is interesting for the Young Generation to hear this type of discussion, in order for them to understand the importance of diversity in international groups. Nuclear is today worldwide. 30 years ago, this wasn’t true, and each country was busy with its own domestic market.
My friends, be international. As our president says, “Think Global, Act Local”. It is important to have a global view of the nuclear industry, and at the same time adapt to the local characteristics.
Silvain IKAZAKI and Sébastien PAES
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