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An inspection at what will be Urenco's largest enrichment center, now under construction in Eunice, N.M. (Source Urenco)
By Stanley Reed at dealbook New York Times, May 27 2013,
CAPENHURST, England - The first thing you notice when entering Building E23 on a tightly guarded site here in northwest England is the loud tick-tock. The sound resonates throughout the long, low-slung building where, behind secured doors, sit row upon row of tall thin tubes.
That ticking means the building's radiation detection system is working - crucial comfort. Inside each cylinder is a centrifuge, spinning a gaseous form of uranium to give it the atomic boost it needs to be used as nuclear reactor fuel.
The company that operates this uranium enrichment center, Urenco, is the world leader in the field. It is also plumply profitable. So why are its owners eager to sell it?
The answer, as with many things involving nuclear power, is a combination of economics, geopolitics and the Promethean prospect of an energy source that is as potentially green and abundant as deadly dangerous.
Urenco was formed by treaty in 1971 when Britain, West Germany and the Netherlands decided for strategic and business reasons to combine their uranium enrichment programs. The company is still owned by the British and Dutch governments, with one-third each, and with the German third held jointly by two big utility companies, E.On and RWE.
Urenco now has four enrichment plants - in Britain, the Netherlands and Germany - selling fuel for civilian energy purposes around the world, capturing nearly a third of the global market. It is also heavily investing in an American centrifuge complex in Eunice, N.M., that will eventually be its largest plant.
"Over the years we have developed generations of these machines," said Helmut Engelbrecht, Urenco's chief executive in a telephone interview. "If you do something continuously you always improve."
Besides fuel, Urenco's centrifuges spin off fairly good money: revenue of 1.6 billion euros, or $2.1 billion last year, yielding earnings of 402 million euros, for a profit margin of 25 percent. And its order book stands at 18 billion euros, which translates to at least 10 years of steady work.
Analysts estimate Urenco's market value at about 10 billion euros. For all that momentum, though, the company is at a crossroads. Growth may flatten in the next couple of years, executives say, mainly because Japan - a major user of nuclear power until the 2011 Fukushima Daiichi disaster - has shut down its reactors, taking about 10 percent of the world's nuclear energy generating capacity offline. And the Japanese have stockpiled substantial amounts of fuel for the day, if ever, that those reactors go back into operation.
The British government, intent on cleaning up its budget by selling state-owned enterprises, said in March that it had hired Morgan Stanley to look into disposing of all or part of its Urenco stake. In some respects Urenco is an easier business to sell than, say, the Royal Mail, because it has an internationally marketable product and a relatively small work force - about 1,400 employees.
The German utilities E.On and RWE have hired Bank of America as their adviser. With the German government's having decided to get out of the nuclear industry in 2011 after Fukushima, the sale of their Urenco stakes would help the power companies beef up their thin balance sheets.
A sale became more likely Thursday, when the Dutch government said it wanted to sell its shares, as long as "the public interest in terms of nonproliferation, nuclear safety and supply security" could be safeguarded.
A person close to planning, who insisted on anonymity because of the delicacy of the matter, said if things went smoothly a sale might occur either late this year or in the first half of 2014....
....Urenco produces the steady, long-run returns that might be valued by pension funds and private equity groups. But worries that the wrong people may gain access to Urenco’s world-leading technology will probably mean that the shareholders - and the British, Dutch and German governments - will be highly selective about who can buy stakes.
While Asian or Middle Eastern sovereign wealth funds are said to be among those interested, only companies from North America, western Europe, Japan, or possibly, South Korea, are likely to pass muster, people in the industry say.
"There are an awful lot of security concerns which arise around these types of businesses," said Fiona Reilly, who heads the nuclear industry practice at Norton Rose, a law firm in London....Dangerous developments on the Horizontal and Vertical Nuclear Proliferation Front.
Where is the assurance that with the selling of Urenco Industry there will be no risk of Proliferation whatsoever ???
Seeing all those potential very interested buyers in the market in the Middle East and Asia - there is NON !
Sorry, I know the news is a bit old, but I had not seen it before,
Ak Malten, Pro Peaceful Energy Use
Urenco - Powerhouse of the Uranium Enrichment Industry Seeks an Exit
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