Bloomberg News

Siemens Buries Nuclear Return as Germany Pulls Atomic-Power Plug

September 18, 2011

Sept. 19 (Bloomberg) -- Siemens AG said it abandoned a planned return to the nuclear-power industry, following the German government in its retreat from atomic energy in the wake of the reactor catastrophe in Japan earlier this year.

The German engineering company will drop plans to cooperate with Russian nuclear-power company Rosatom Corp. in the field of reactors, Chief Executive Officer Peter Loescher told Germany’s Der Spiegel magazine, in comments that were confirmed by the Munich-based company. There are no financial implications linked to retreat, spokesman Alfons Benzinger said.

“We’ve closed that chapter,” Loescher said, according to an interview with the German weekly. Siemens is responding to the “clear position taken by society and politics in Germany” in regard to a retreat from nuclear power, he said.

Siemens has gradually scaled back its atomic-power operations over the years, after helping build some of the world’s largest reactors in the latter part of the last century. The company no longer makes components specifically for nuclear plants, and Siemens has sold its stake in a venture with Areva SA, the world’s largest maker of nuclear stations.

While Siemens is pushing renewable-energy sources such as wind turbines and solar power, the company will continue to build steam turbines that can be used both in conventional as well as nuclear facilities, Benzinger said. The entire energy division is Siemens’s second-largest by revenue, generating 6.77 billion euros ($9.34 billion) in the most recent quarter.

Russian Cooperation

Loescher said his company will seek to cooperate with Rosatom in other areas, according to the article in Der Spiegel. The nuclear accord only existed as a memorandum of understanding, Siemens said. Siemens has been active for more than 155 years in Russia, where it employs more than 3,300 people and generates sales in excess of 1.2 billion euros.

The German engineering company makes products including high-speed trains, medical scanners, and factory-automation equipment. Loescher has focused on areas such as health-care equipment and infrastructure, as he targets the product portfolio at an ageing population and increasing urbanization.

Siemens had been active in nuclear power for decades, for the most part under the name of Kraftwerk Union AG, which Siemens partly moved into a joint venture in 2001 with France’s Areva. Siemens used an option to exit the business in 2009. It was forced to pay a 648 million-euro penalty to Areva this year after failing to meet some contractual obligations.

Areva, which is majority owned by the French state, is building a nuclear power plant in Finland, one of several that are under construction in Europe. After atomic power enjoyed a renaissance in recent years, the technology has come into question in after the nuclear disaster at Fukushima in March.

In the aftermath of the accident, Germany, Europe’s largest economy, decided to decommission its atomic-power plants within the next decade. Loescher, in the interview with Der Spiegel, called the country’s retreat “the project of a century.”

--Editors: Will Kennedy, Heather Harris

To contact the reporter on this story: Benedikt Kammel in Berlin at bkammel@bloomberg.net

To contact the editor responsible for this story: Heather Harris at hharris5@bloomberg.net


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