The venture so far has landed only one contract: construction of two systems for the $600 million Severo-Zapadnaya power station now being built in St. Petersburg.
But Achim Sauer, representative of Siemens KWU, the firm's electrical equipment division, said in an interview that the joint venture plans not only to sell in the Russian market, but also eventually to export its products from Russia.
If it is successful, the venture could help the Russian government meet its goal of increasing the share of manufactured and assembled goods as a percentage of total exports, which now consists chiefly of commodities such as oil, gas and metals.
The joint venture, Interavtomatika, unites Siemens and the All-Russian Heat-Technical Institute, which has the biggest stake in the deal with a 41 percent share. Siemens holds a 31 percent share.
"We have chosen the institute because it has a long experience in working with power stations and done much research work in this field", Sauer said.
Siemens will contribute its technology into the project while the institute will assemble the systems. To help with the foreign market, Siemens has enlisted Tekhnopromexport, a Russian foreign trade firm, which has a 15 percent share in the venture.
"The only thing the Russian party needed from Siemens was technology", Marina Aleshechkina, Siemen's sales representative said.
Vladimir Lysko, deputy director of the Heat-Technical Institute said that Russian automation systems for power stations are eight to 10 years behind the West. The automated systems, which take three to four years to design, direct the energy flow at power stations with computers and help save fuel by using it more efficiently. Sauer said that ecological waste is reduced by up to 90 percent and the productivity of the station can increase by up to 51 percent.
The joint venture has a charter capital of 3 million Deutsche marks ($1. 8 million), according to Hubert Hawliczek, the deputy director of Siemens. He said the company will not begin making money for about five years, when the company hopes to earn profits of more than $500, 000.
The systems will be produced at the Mosmatik firm, a separate Siemens joint venture with AZLK, one of Russia's biggest auto makers. But the factory is small and to increase production Interavtomatika will enlist a defense factory that is converting.
The two factories will allow Interavtomatika to work on four systems at a time. Lysko said Siemens is training 10 of the Russians, who will be employed with Interavtomatika and will train eight more. The joint venture will employ 80 locals, mainly engineers from the Heat-Technical Institute.
Sauer said that the firm also plans to begin production of automation systems for atomic power stations.
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