Elemash thriving despite Russian crisis

8 January 1999

Since the revolution the industrial complex of Elemesh in the town of Electrostal, 50 kilometres east of Moscow, has been central to the former Soviet Union’s military and nuclear development. Despite Russia’s present financial crisis, Mashinostroitelny Zavod (Elemash) is thriving as a result of a successful export business.

Faced with a currency crash, hyper-inflation and frozen bank accounts, a number of factories in Electrostal have had to close, but Elemash is flourishing. Over the past three years there have been no staff cuts or serious salary delays. The plant has taken on 2500 extra workers and salaries are linked to inflation. “We pay for 80% of the towns budget,” says deputy director Stanislav Gelman, who is clearly proud of his factory.

Elemash was established in 1917 as an arms factory. In 1945 a new unit was set up to make products for the nuclear industry in the race to make the USSR’s first atomic bomb. In 1953 the plant began to make fuel for nuclear power plants and since 1965 it has been involved in the mass production of fuel assemblies for various different types of reactors.

The factory, now a public joint stock company within MINATOM, made fuel for most of the nuclear power plants in the Soviet Union and for Soviet-designed reactors in Eastern Europe. But with the collapse of the USSR, Western fuel manufacturers sought to enter this formerly captive market.

“We recognised the problem and significantly improved the quality of our nuclear fuel, faced with potential competition from European companies,” says deputy director Nikolai Balagurov.

Elemash began to fight back in 1994, after losing a tender to Westinghouse to provide fuel for the Czech Temelin plant.

“Competition in the market is tremendous, with offers twice exceeding the needs of all the world’s existing nuclear plants. It stands to reason that, if Russian enterprises do not seriously improve the quality of their fuel, they will be frozen out by overseas suppliers, first from the East European market and then from Ukraine and Lithuania,” says Balagurov.

Elemash invested in new Western-made equipment while factory specialists, together with leading scientists, changed the composition of the fuel, and developed new zirconium cladding. Various types of experimental fuel rods were made and tested. As a result, Elemash has not only recovered its position within Russia but is also beginning to export to Western Europe.

“A new phase in drumming up custom began as a result of co-operation with Siemens,” says Balagurov.

A new assembly line was opened in the factory specifically to make fuel for Siemens. The company signed a contract for the delivery of Russian fuel rods for PWR-type reactors at the Goesgen nuclear plant in Switzerland and Obrigheim in Germany. New contracts are in the pipeline for plants in Belgium, Sweden and the Netherlands as well as with ABB-Atom.

As to the future, Elemash is developing new fuel assemblies for Russia’s VVER-1000 reactors in co-operation with other MINATOM enterprises and institutes. These are designed to stay in the reactor for four to five years instead of the current three, boosting efficiency significantly.

All this is a far cry from the early days when workers filled shells with TNT by hand and became jaundiced from contact with the toxic chemicals, many dying young from liver damage.

“I can remember seeing the men coming home from work. They all had yellow skin, but we thought nothing of it,” says Gelman. Then at the end of World War II, specialist were brought to the factory from Germany to help with atomic weapons development. “They weren’t prisoners of war but highly paid contractees,” he says. “I went to school with their children.” Now, as well as its nuclear fuel lines, Elemash is making a growing range of electrical appliances such as vacuum cleaners, air conditioners and heaters under licence to internationally renowned companies such as Philips (Netherlands), Kanhtal (Sweden), CSM (Italy) and Samsung (Korea). Because of its success in improving quality, Elemash has been able to retain much of the social infrastructure that many other Russian enterprises have had to discard. It has a range of sports facilities and supports many local cultural activities as well as running rest houses for its employees. But most important, the factory’s success means salaries are paid on time and are increased regularly.

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