3. Areas covered
• The nuclear power market
provides innovation and
opportunities to Turkish
companies but technology and
cost are increasing rapidly
• The 5 Key Challenges in the
localization process
• 6 Steps to build a sustainable
business
• Ongoing Case Studies
4. The nuclear power market provides innovation and
opportunities to Turkish companies…
... BUT Costs of
Technology, and Human
Resource are Increasing
5. • While revenue continues to
grow, margins decrease due to
regulatory body and operator
requirements
“Capacity factors today can be
90% +. Back in the 1980s, a
capacity factor in the mid 80%
was considered as excellent”
Milton Caplan, The Importance of Innovation to the Nuclear Industry
February 14, 2014
• Increase cost include
commodity price escalation,
engineering, and craft labor
shortages and manufacturing
and shipping constraints.
• Combined with uncertainties
about executing engineering and
construction, overnight cost
estimates (that exclude the costs of
escalation and financing) , etc.
World Nuclear Association, Nucleonics
Leaders in nuclear industry must improve through innovation
6. European Chamber
Survey
CEIBS Survey
Swiss Survey
Rising Labor Costs
✔ No. 1
✔ No. 3
✔ No. 1
Fierce Competition
✔ No. 6
✔ No. 2
✔ No. 2
Economic slowdown in
China
✔ No. 3
✔ No. 1
✔ No. 3
Economic slowdown in
home market
✔ No.2
✖
Slow recovery of global
economy
✔ No. 5 (Lower international demand)
✔ No. 4
✔ No. 4
Government policies
✖
✔ No. 5
✔ No. 5
Legal environment
✔
No. 8 (Biased relations/regulatory
enforcement)
No. 9 (Burdensome regulatory
environment)
✔ No. 6
✔ No. 6
Business it getting tougher and companies are chasing other
markets such as Turkey
European Business in China: Business Confidence Survey European
Chamber, 2013
2013 Business in China Survey & 2013 Swiss Business in China Survey,,
A CEIBS, Swiss Center Shanghai, China Integrated Analysis
7. • 55 new reactors are forecasted
in the Middle East and African
Continent until 2030 and more
until 2040
Sources: IAEA, World Nuclear, IEA, OCDE,
Source: UNCTAD, FDI/TNC database based on data from the Central
Bank of Turkey
• FDI in the Turkish energy market
is just burgeoning while the
electricity market is one of the
fastest growing in the world,
with approx. 9% annual growth
on average, in 2010 and 2011.
Everybody Wants a Piece of the Golden Cake!
Nuclear is still a leading emerging market for investment
such as MENA
8. 1000
600
72
30
Source: Istanbul Chamber of Commerce and Ankara Chamber of Commerce
• “One job created in the Nuclear
industry will create ten other
jobs in other segments “Viktor
Karmatsky, June 8, 2012.
Nuclear Intelligence Weekly
Sources: EDF, NIAUK, State of the World 2013, Dynatom International
Revenue from the nuclear market will become CRUCIAL
for a a specific range of companies
• From a large survey of the 1,000
top Turkish companies in the
energy sector, a small number will
gather into a nuclear cluster,
others will get involved in
construction and non safety
equipment
125000
54000
39000 38000
0
50000
100000
150000
France UK Turkey Germany
Jobs generated in the nuclear
industry
9. But a major challenge is the lack of an experienced human
resource in nuclear
Two examples with VVER: Jordan and Turkey
• Jordan can neither afford the same level of
direct investment in its nuclear power assets
nor the same level of support for educational
and governmental institutions with a role in
nuclear sector.
• Turkey has no operational experience of
commercial-scale nuclear power, and may be
vulnerable to a situation of information
asymmetry in which the regulator may not
have sufficient expertise and capacity to
competently oversee an experienced
Russian project company
John Banks, Kevin Massy, Charles Ebinger
Human Resource Development in New Nuclear Energy States: Case
Studies from the Middle East, Energy Security Initiative, Nov. 2012
10. 1. Erzhong Group
2. Dongfang Electric
3. Haerbin Electric
4. Dongfang Boiler
5. Fangda Carbon New Material Technology
6. Wujian Dongwu Machinery
7. AB Sandvik Materials Technology
8. Aerzen
9. ALFA LAVAL LUND AB
10. Alstom Power Turbomachines
11. Andritz AG
12. AREVA
13. Armaturenfabrik Franz Schneider
GmbH&Co.KG
14. BERNARD CONTROLS S.A.
15. CAMERON INTERNATIONAL
CORPORATION
16. Canberra Industries, Inc.
17. Emerson Process Management S.A.S.
18. Erndtebrücker Eisenwerk GmbH&Co.KG
19. Habia Cable AB
20. Instalaciones Inabensa S.A.
21. KSB Aktiengesellschaft (KSB AG)
22. Manoir Industries
23. NFM Technologies
24. Rotork Control Limited
25. Sandvik Materials Technology
26. SCHOTT Electronic Packaging GmbH
27. Siemens AG
28. Sumitomo Metal Industries, Ltd.
29. Swagelok Corporation
Source: Dynabond Powertech Service
More various, key suppliers are already in Turkey
12. The 5 key challenges that threaten the localization
1. Rising Cost & Lack of
Skills
2. Lack of local regulation
3. Inexistence of Industrial
Park
4. Timid involvement of
Research and the
Industry
5. No Lobbying Group
13. OECD
In the context of serious regional
geopolitical tensions and the sluggish
recovery in Europe, exports are
projected to be subdued and GDP
growth to be relatively weak by Turkish
standards, at 3¼ per cent in 2015 and
4% in 2016
1. Costs of setting up operations in Turkey alone may grow
fast
• Growth has lost momentum in
2014
A conventional mechanical engineer in
Turkey with 20 years of experience
earns a salary of 30,000 Euros
• Lack of skilled labor will require
Investment in human resource
Bureau of Labor statistics, National Careers Service, Onisep, CFHI
The Central Bank of Turkey cut its mid-
point inflation forecast for the end of this
year to 5.5 percent from a previous 6.1
percent, governor
• Inflation rate is decreasing but
still high
Governor Erdem Başçı, Central Bank of Turkey
0
20000
40000
60000
80000
USA UK France China
Average salary for graduated
technician in nuclear industry (€)
14. Cost of Human resource
Payscale
11'409€
22'087€
13'890€ 11'092€
20'436€ 19'361€ 18'444€
84'427€
104'339€
138'647€ 144'678€
148'375€
141'663€
110'681€
'0€
20'000€
40'000€
60'000€
80'000€
100'000€
120'000€
140'000€
160'000€
180'000€
Anadolu
Universitesi
Bilkent University Ege Universitesi Hacettepe
University
Middle East
Technical
University
Yeditepe
Universitesi
Yildiz Teknik
Universitesi
Salary for Engineers from Major Schools
Minimum Maximum
15. Cost of Human resource
Payscale
406'699€
130'621€ 145'483€
110'532€
55'248€
'0€
50'000€
100'000€
150'000€
200'000€
250'000€
300'000€
350'000€
400'000€
450'000€
Bachelor of
Engineering (BEng /
BE), Mechanical
Engineering (ME)
Bachelor of Science
(BS / BSc), Industrial
Engineering (IE)
Doctorate (PhD) Bachelor's Degree Bachelor's Degree,
Computer Engineering
(CE)
Maximum salary range for popular degrees
21'802€
29'693€
17'295€
14'295€
8'972€
'0€
5'000€
10'000€
15'000€
20'000€
25'000€
30'000€
35'000€
Bachelor of
Engineering (BEng /
BE), Mechanical
Engineering (ME)
Bachelor of Science
(BS / BSc), Industrial
Engineering (IE)
Doctorate (PhD) Bachelor's Degree Bachelor's Degree,
Computer Engineering
(CE)
Minimum salary range for popular degrees
16. • The regulator does not have
any regulation to control or
monitor the foreign
competition
• The HAF regulations in China
allow the safety authority to
monitor foreign companies and
support the local industry
2. Lack of Local Regulation and industrial strategy
HAF 604 Union des Forgerons
0
20
40
60
80
100
120
HAF601
HAF604
17. • The creation of a local park
dedicated to nuclear is a
magnet for new ventures and
investment.
• Sinop and Akkuyu do not
have a local supply chain, in
particular a nuclear
industrial park
3. Inexistence of a Nuclear Industrial Park
Areva, signed an agreement with Haiyan
that it would invest 300 million yuan to
establish Areva (China) Nuclear Power
Service which is exclusively foreign-
owned with a registered capital of 100
million yuan in Qinshan Sub district (The
nuclear power operation area of the
China Nuclear City). This company to be
established will offer main services to the
local enterprises, and also to other
nuclear power enterprises in China.
Haiyan Government
Haiyan
Haiyang
Taishan
18. • The interaction between the
academic and industry is
essential to fasten the applied
research
Since its creation, the PNB gathers
160 entities. More than 3 000 jobs
were created in Burgundy and
investments of above 700 Million
Euros. Nuclear represents 12,000
jobs in the region, 70 square
kilometers around Dijon
Pole Nucléaire Bourgogne
4. Timid harmonization between the research and industry
• Europe SNETP set up a Task Force
comprising research organizations and
industrial partners to develop the
European Sustainable Nuclear Industrial
Initiative (ESNII) in support of the SET-
Plan.
• The National Nuclear Laboratory (NNL)
welcomes the establishment of the
Nuclear Innovation and Research Office
(NIRO). NIRO is is the body responsible
for providing advice to Government,
industry and other bodies on R&D and
innovation opportunities in the nuclear
sector under the guidance of the Nuclear
Innovation and Research Advisory Board
(NIRAB) Snept.eu, National Nuclear Laboratories
20. Operator, 1 Research Center, 2 Bank & Insurance, 3
NDT, 3
Consulting, 5
Government body, 8
Engineering , 11
Schools and Universities, 13
Heavy Industry, 15
Components Manufacturer,
39
Gérard Kottmann, President of the Burgundy Nuclear Partnership, signed with the French
State a performance contract engaging the PNB in an ambitious programme covering,
R&D, innovation and education.
25/07/2011 - France, Power generation
4. The core of Burgundy Nuclear Partnership
21. • Spanish Nuclear Group is a consortium of four Spanish companies, ENSA,
ENUSA, RINGO and TECNATOM in order to coordinate, increase and promote
these companies operations in the marketing sector of goods and services for
nuclear power stations in which the core business carry out their activities.
• Founded by industrial organizations, FinNuclear purpose is to promote Finnish
companies’ general preconditions, cooperation, competences, international profile in
manufacturing, construction and service activities in the nuclear energy field.
• It covers the whole lifecycle of nuclear power plants and associated plants, including
design, licensing, construction, operation, maintenance, modernization, fuel cycle,
waste management and decommissioning as well as related research activities.
• PFME is an association of EDF suppliers for the French nuclear program who
provide equipment and services for nuclear power plants around the world.
• The main objective of the association is to support PFME countries wishing to
develop or redevelop their nuclear industry giving them the benefit of the
experience and expertise of French suppliers.
5. No Lobbying Group
http://english.finnuclear.fi/finnuclearassociation
http://www.sngc.es/en/about-us/
http://aifen.fr/site/membres/membres-n-r/pfme-partenariat-france-monde-electricite/
22. 5. The French China Electricity Partnership
Fuel cycle
4%
Ventilation,
insulation,
sealing
7%
Civil
Engineering
11%
Hydraulic,
pumps, valves,
pipes
20%
Electricity
13%
Mecanic,
handling
19%
Protection &
Control
26%
The leading Lobbying Group in
China: The French China Nuclear
Partnership
The PFCE aims to promote the safety and
competitiveness of nuclear electricity
production through sustainable involvement of
French industry especially in the realization of
China's nuclear program, particularly
implantation units in China and partnerships
between French and Chinese nuclear
industries in the areas of design,
manufacturing, construction, commissioning,
monitoring, maintenance and
decommissioning of nuclear power production
electricity.
http://www.pfce-online.com
23. 6 Steps to get localized in the nuclear market in 2015
1. Safety is the key
2. Assess the domestic
market and local skills
3. Create a combined
Research Group
4. Rally the industry in a
lobbying group
5. Partner with an
experienced foreign
company
6. Open industrial parks to
attract investment
25. Have a clear understanding of the culture of safety
• Less than 10% of the Chinese
companies certified by the National
Nuclear Safety Authority for design,
manufacture, install and NDT have
applied for the ASME stamp.
• The main reason is the insurance
liability and insurance premium.
• State Nuclear Power Technology
Corporation (SNPTC) senior expert
Xu Lian-yi:
Measured by international standards,
construction site safety records in China
are poor. The behaviour of contractors on
safety management are of grave
concern, including the lack of provision of
personal protection equipment, regular
safety meetings, and safety training
C.M. Tam, S.X. Zeng, , Z.M. Deng
Identifying elements of poor construction safety
management in China
"Our weakness is the management standard is
not high enough, and there is a big gap between
the international standards."
国国家家核核电技技术公公司司(SNPTC)资
深深专家家许连义曾曾说:: ““我我们致致命命
的的弱弱点点是是管管理理标准准不不够高高,,
和和国国际标准准还有有很很大大差差距距。。””
http://www.heneng.net.cn/index.php?mod=news&action=show&article_id=34229&category_id=9
27. • Create a corporate website with reports available to the public:
Make your company the expert in the industry: Market data crushes product data
Always know what is going on in your market segment
No News = Bad News
• Get first hand information
Participate in workgroup with government agencies, such as ASO, ISO,
KOSGEB,MUSIAD TUBITAK...and create partnership with Engineering
universities. Ex: PNB in France, CNEA in China
• In China 82 companies provide safety related valves
Screen on daily basis a maximum of information related to your competitors in
your markets
28. Most skilled workers in Turkey tend to immigrate
• Early cooperation with Technical
schools and universities: benefit of
the research in your company
• Ex: Gedik University
• CEA and the industry Finances
doctorates CTCI/CTCR
• Finance Doctorates to retain knowhow
and future managers
CEA-INSTN
CNNC and Harbin Engineering
University signed strategic agreement
and agreement on joint personnel
training.
CNNC, December 2010
• Create a strong QM department, and
design team.
• Use the licensing culture of US
Companies
Find the right people to work with
0
20
40
60
80
100
120
1 2 3 4 5 6 7 8 9 10 11
Certification for Design
awarded 2004-2014
(HAF 601)
30. • Early cooperation with French,
German, Czech and Finnish,
associations: benefit of
international experience for your
nuclear cluster
• PFME (France)
• GIIN (France)
• NIA (UK)
• SGNC (Spain)
• FINNUCLEAR (Finland)
• OCI (Canada)
• Use the leverage of your
market to attract foreign
associations
The (PFCE) and the French Nuclear
Industry Association (GIIN) signed in
Haiyan a letter of intent for promoting
cooperation in nuclear related industry
with the local government
Nicobar Group August 2010
Implement a cooperation agreement with foreign industrial
associations and provinces
• ILLINOIS
• BURGUNDY
• NORTH RHINE WESTPHALIA
• GREAT MANCHESTER
• ZHEJIANG
• Create industrial
partnership with
provinces and states
craving for business
expansion
• Start using foreign interns from the nuclear engineering
schools, subcontract nuclear engineering to local
companies, educate your banker and insurer
32. • Increase public acceptance for nuclear.
Even in China, public stops projects
( Shandong / Guangdong)
1. Create a nuclear subgroup within the ISO,
ASO, KOSGEB, TUSIAD…
2. Use promotional supports in schools
• Film Sales Corp (Pandora Promise)
• The Heritage Foundation
3. Organize regular visit of your factory to
local / national politicians
• Many of Chinese leaders are from
Zhejiang and Shanghai area
• French Minister of SME was the
mayor of the capital of Burgundy
4. Create a bilingual media platform
Educate the market and government bodies
The starting point of all achievement is desire
Napoleon Hill
34. Make Communication your Priority No. 1 and Develop
Cultural Intelligence
“To see me does not necessarily mean to see my face. To
understand my thoughts is to have seen me.”
Mustafa Kemal Ataturk
Expectations
from your
company
Expectations
from the
foreign partner
Proactive business development
in regional programs (UAE, Egypt,
KSA, Jordan, Armenia…)
Expansion of the Brand, Control of
non proliferation to Iran, Syria,
Libya
Protection of IP, reporting on local
regulations, relation with TAEK
and EPC
Experience in the nuclear market,
investment in training program
Continuous development of new
equipment
Using the foreign Brand
Transfer of technology, Russian
US and French codes and
standards
Education to the staff
35. The search for the right partner: PREPARE
• The challengers are
more open to
discussion
• The companies that
are not “state owned
minded” react faster
• The large brand are
often too bureaucratic
and slow to decide
Assess the top 2
and 3 in the market
Prepare a list of
technical needs
and regional
market
opportunities
• You are expected to
work as equal partner
- Know your nuclear
environment
- Assess your
technological gaps,
and your competitor
weakness
• Outline your multi
national strategy
MENA
The long term
commitment,
financial and
master of the
local regulations
Sign fast,
prepare for a
first consulting
project
• Show your commitment
to excellence, nuclear
is long run:
-Investment in
Human Resource, Codes
and standard, and a
considerable QM program.
• Develop your network
with TAEK, TUBITAK,
AFAD, and the Ministry
of Energy
• Visit fast your partner
facilities
• Draft a first consulting /
research project (your
investment) to learn
from the foreign
company
• Prepare for a joint
program within the
next 3 months.
Foreign partner wants
visibility
Except in a few
cases, avoid the star,
take the challenger
Show your will to invest in
development to match the
partner standard
Foreigners are impatient
due closure of major
market such as China
To lead an untrained people to war, is to throw them away
Confucius
36. Which partner should you target?
Country
Advantage
Weakness
Expecta>on
Belgium
Reacts
Fast,
experienced,
mul>cultural
High
expecta>on,
oFen
suspicious
Region
oriented
Canada
Easy
going,
trusGul
CANDU
oriented
mostly,
not
aggressive
Moderated
China
Speed
in
execu>on
Slow
in
Decision,
poor
communica>on,
state
oriented
Fast
Return
on
Investment
Czech
Russian
standards
State
Oriented
Expects
orders
from
Rosatom
France
Experienced
in
overseas
market
Suspicious
in
transfer
of
technology,
non
exclusive
Expects
purchase
orders
from
you
Germany
Market
oriented,
experienced,
need
to
act
fast
Made
in
Germany:
small
transfer
of
technology
Planning
Japan
Quality
Poor
communica>on,
lack
of
leadership,
language
barrier
To
sell
directly
through
their
sogo
sosha
Korea
Aggressive
Control
freak
Fast
Return
on
Investment
USA
Licensing
Process
guru,
license
export,
more
maintenance
oriented
Visibility
38. • Check with ISPAT if Sinop and
Akkuyu are Technology
Development Zones (TDZ) to
support R&D activities and attract
foreign investments nuclear
manufacturing.
• Invest in design and manufacturing
of Class 3 equipment.
Create entities in industrial parks close to NPP
• Look how Germany implemented its industrial supply chain. Many
similarities can be taken into account:
• The projects in Turkey (3-4 sites) are more or less the same than actual
market of Germany
• Population (75-80),
• Strategic position and leading status( Europe-MENA)
• TSO agreement
FDI Inflows By Countries, 2012, Central Bank of Turkey
The Netherlands 19,7%
Austria 8,8%
Germany 8,8%
UK 7,1%
Spain 6,3%
Luxembourg 5,2%
France 4,9%
USA 4,8%
Russia 4,7%
UAE 4,3%
Switzerland 3,4%
40. Mavinci: Nuclear Safety
• Leader in CBRN development, but:
- No experience in nuclear power market
- Lack of vision in the market
• What was done ?
- Assessment of Mavinci capabilities
- Proposal of several markets to get involved in
- Suggestion of the partner and business model
- Planning of the partnership, and market opportunities
- Commitment to investment in the nuclear training center
• Delivery
- Partnership with the leading Technical Safety Organization from Germany (GRS)
- Creation of a consortium with Hacettepe University
- Planning of specific research and nuclear safety projects for 2015
41. Gedik: Nuclear Casting
• Leader in welding and valve, but:
- No experience in nuclear power market
- Lack of understanding of standards and codes
• What was done ?
- Assessment of Gedik capabilities
- Suggestion of the partner and business model
- Planning of the partnership, and market opportunities in the region
- Commitment of investment from Gedik to complete Forgemasters offer
• Delivery
- Partnership with Sheffield Forgemasters from United Kingdom
- Creation of an education project between the UK and Gedik
- Planning of specific consulting projects for 2015
42. • Dynatom International is
consulting firm focused in
nuclear market only
• Located in Fribourg,
Switzerland, with branches-
representation in Beijing,
Chicago, Valencia and
Istanbul
• Specialized in Technology
transfer in China and
overseas market
dominance
• Since 2014 expansion in
Turkey to develop the
industry has a hub for all
NPP in the MENA and Africa
A Word from our Sponsor
43. • Transfer of Technology
• Certification Process
• Market Intelligence and
dominance
• Strategic development in
overseas markets
• Communication and
Branding
• Trade and Investment
Expertise and origin of our portfolio
44. Any industrialized country that uses nuclear power
controls 90% of the supply chain.
China, India, the Middle East, Asia Minor, Africa and
Latin America are no exceptions to this rule, it is just a
question of timing.
Your role is to act in the global market and to anticipate
new challenges rather than wait for orders and control
the damage from your competitors.
Contact us:
• Turkey (Istanbul): Aline Telle, +90 (531) 763 14 09
• atelle@dynatom.org
• Switzerland (Fribourg): Arnaud Lefevre +41 (76) 588 09 66
• alefevre@dynatom.org
• USA (Chicago) : Frederic Mouen +1 (872) 220 5063
• fmouen@dynatom.org
• China (Beijing) Nicolas Schlumberger+86 158-2194-4786
• nschlumberger@dynabondpowertech.com
“Action without thinking is the cause of every failure” Peter
Drucker.
YOUR NEXT STEP