Source: iDnes Date: 13.07.2023
After overcoming insolvency and a debt of over half a billion, the engineering company MICo from Jaroslav Strnad's CE Industries holding managed to achieve an operating profit. It now has the ambition to transform the company into a leading supplier of new nuclear units. "The company is stabilizing thanks to new orders, and its turnover could reach CZK 600-700 million a year in future years," says director Petr Litvan in an interview with iDNES.cz.
In what state did you take over the previously successful MICo?
The company needed to be in a better period before the insolvency. We took it over in poor condition and with no new orders. We had to clean up MICo, set up new processes and gradually gain customers' trust, rebuild the team, and assemble a largely new management team. CEZ, for example, had waited a lot. It was calculated that it would take one to two years to get MICo into positive numbers. We are a little ahead of schedule, and further funding from parent CEI will not be necessary. The new contracts will stabilize us. The most we will need is help with their initial budget. Our production time starts at six months; a capacitor takes three-quarters of a year to produce, and the bigger ones may be a year or more.
How do you explain the company's insolvency?
The biggest problem was the large number of MICo's subsidiaries, one of which was at one time involved in manufacturing medical devices and ventilators, for example. Each subsidiary was developing a different product and using MICo's resources. Resources started to spill over differently instead of focusing on creating a business that worked. Currently, they are all basically in liquidation. Only MICo Service, which makes seals for nuclear units, remains. It's a smaller but very successful business.
So MICo is in the black again because you have returned to your original business?
It was important first to set up a new internal functioning, to assemble a new larger, and more competent team, and to link MICo's operations with other Group companies, in this case, with Chemcomex also from the Energy Division. CEI companies work best when they complement each other. MICo manufactures products such as heat exchangers and condensers, and Chemcomex can install and connect them to piping systems. But in general terms, yes, we have returned to the nuclear and conventional power business. I see a lot of potential there. Our primary focus is on the nuclear sector. We want to be the leader in Central Europe in their supply. The advantage is that if you can make heat exchangers, you can create pressure vessels, tanks, and other components for thermal power plants or chemical plants.
Who are your biggest clients today?
We recently shipped a 25-meter meter-long column to the chemical industry segment and an 85-tonne condenser for the Opatovice Power Plant. We have delivered to Ukraine, Turkey, Bulgaria, and Finland. A crucial delivery for us was for the British nuclear power plant Hinkley Point C. England is planning to build a new nuclear power plant; it will be a technological copy of Hinkley Point C. We will offer them what they already know works. Our clients include Czech nuclear power stations. We have the great advantage of being within driving distance of Dukovany, about 15 minutes away.
What economic results do you expect this year?
We will reach 150-180 million crowns. This includes about CZK 30 million in sales from our sister company MICo Servis. The company's turnover fell to CZK 131 million in the last crisis year. In the future, we are looking at a turnover of 600-700 million a year.
Does MICo have enough staff for such a turnover?
Today there are about 130 of us and another 15 with MICo Service. We need once as many people for such a turnover. It's going to be a challenge to figure out. To complete Dukovany alone, CEZ needs to hire thousands of people. It takes a lot of work to find new colleagues today. The industry has been neglected for a long time and has yet to be promising. Universities still need to produce these types of engineers. And I'm not just talking about engineers. The shortage concerns welders, locksmiths, and metalworkers.
Is the nuclear power industry enjoying a renaissance today?
The war in Ukraine has made it clear that we need a stable energy source: nuclear. The Group's interest is to expand in power engineering and exploit individual companies' synergies. We want to supply more complex technological units to our clients in the future. Therefore, expanding to include valve manufacturers, another part of the market struggling for survival today, would be interesting. And it is a key business for CEZ because there are thousands of valves in power plants, and they need to be renovated and renewed.