| FRANKFURT, Sept 19
FRANKFURT, Sept 19 Siemens' (SIEGn.DE) exit from
its nuclear partnership with Rosatom robs the Russian player of
a famous brand name it badly needs to compete with the likes of
Areva NP , General Electric and Toshiba
Siemens Chief Executive Peter Loescher said on Sunday the
company was giving up its nuclear power business including a
planned partnership with Rosatom in response to the German
government's decision to quit the energy source.
"The (nuclear) chapter is closed for us," Loescher told
German weekly magazine Der Spiegel, declaring Siemens' official
position for the first time since the Fukushima crisis in Japan.
Siemens had kept mum about its nuclear ambitions and on
Rosatom, the Russian state nuclear corporation with which it
signed a memorandum of understanding in March 2009 to form a
nuclear joint venture.
"They (Rosatom's rivals) are all probably happy because the
credibility of Rosatom in the international market would have
been reinforced if they had Siemens as a partner," analyst Bernd
Laux of Cheuvreux said.
"Rosatom is now on its own against Areva, the Americans and
the Japanese," he said.
"The reputation of Siemens is outstanding and is recognised
world wide. It would have helped Rosatom." he added.
The Russian company said it was aware of the reasons
for Siemens' decision. "We understand the logic...It is clear it
is not a slight against Rosatom," spokesman Sergey Novikov told
Reuters in Moscow.
"Siemens has to follow the line of the German
government which decided a total shutdown of nuclear
assets...Rosatom and Siemens will continue to work together in
other fields, including nuclear medicine," he added.
He declined to comment on the potential search for new
Siemens and Rosatom had initially planned to form a joint
venture through Rosatom subsidiary Atomenergoprom in March 2010.
According to analysts, there were indications Siemens would
not just be involved in supplying the conventional island
equipment , as it did with its Areva partnership, but would
also be involved in the main nuclear plant business.
A nuclear power plant has two main parts. The
conventional island houses equipment to convert into electricity
the steam from the nuclear island, where the nuclear fuel is
"From the Siemens point of view nothing has changed. They
are not moving into the active nuclear part of the business --
the bad part, everything that has to do with uranium," analyst
Thomas Langer of WestLB said.
"Some interviews pointed to Siemens going into that part and
whenever I asked around, I never really got an answer," Langer
"One competitor less is a good thing for the rest (of the
industry rivals). But for sure, Siemens will now move very, very
aggressively into other segments of the market, such as gas and
renewables," Langer said.
Atomenergoprom was created by Vladimir Putin, while he was
Russian president, to merge all of Russia's civilian nuclear
assets and help them compete in the global market.
Russia, one of the world's biggest sellers of uranium
enrichment services, has been trying to break into the
prosperous nuclear markets of the United States and the European
Rosatom has a number of existing joint building
projects with other countries that did not involve Siemens,
including China, India, Ukraine, Turkey and Bangladesh.
Competitors include Areva NP, a unit of Areva S.A.
CEPFi.PA; Japan`s Toshiba Corp, which owns U.S.-based
Westinghouse; and GE Hitachi, the nuclear venture of U.S.
conglomerate General Electric and Japan`s Hitachi .
Siemens left its joint venture with Areva NP in early 2009,
unhappy with the fact that it had no say as a junior partner.
At the time, Siemens expected the nuclear market to have a
renaissance as governments sought to cut carbon emissions
But the divorce from Areva was marked by bitter legal
battles, with the French partner suing Siemens and declaring the
latter's partnership with Rosatom violated a non-compete clause.
A court ruled in May that Siemens flouted the joint venture
agreement and told the German conglomerate to pay Areva 648
million euros ($893 million).
The court also banned Siemens from competing with Areva for
four years until 2013, dealing another blow to Siemens'
ambitions in the nuclear field after the Fukushima crisis forced
a sea-change in Germany's nuclear policy.
($1 = 0.725 Euros)
(Additional reporting by John Bowker in Moscow; Editing by