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“Mini Nuclear Reactors in Vietnam”

“Mini Nuclear Reactors in Vietnam”. James Dowd, Amol Kasbekar, Mark King, Michael Strosnider, & Tim Yee STRT 571 - International Business Environment – Final Project Monday, May 3, 2010. The Babcock & Wilcox Company (B&W). The Foreign Direct Investment (FDI) in Vietnam.

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“Mini Nuclear Reactors in Vietnam”

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  1. “Mini Nuclear Reactors in Vietnam” James Dowd, Amol Kasbekar, Mark King, Michael Strosnider, & Tim Yee STRT 571 - International Business Environment – Final Project Monday, May 3, 2010 The Babcock & Wilcox Company (B&W)

  2. The Foreign Direct Investment (FDI) in Vietnam “…aggressively expand its reach overseas, both to meet corporate growth goals and to diversify its customer base to produce more consistent and predictable financial performance” (Summer 2009 Explore, 2009) - B&W CEO Brandon Bethards

  3. The Vietnam Power Market • Actual demand for electricity grew 15% per annum during 1995 – 2005 • Demand forecasted to grow 17-20% per year during 2007 – 2015 • Government objective to diversify sources of power generation • Commitment to open competitive market electricity market by 2022 Vietnam Electricity Production and Sales Forecast Source: Sixth Master Plan – EVN, November 2007

  4. The Risks FREE CAPITAL FLOW Political / Regulatory • Devaluating currency • Goal 1% a year • 20% during 2005-2010 • Government Stability • Expropriation Risk • Corruption • Nuclear Regulations • Vietnam is Export Market Oriented • Weak Currency • Stable Exchange Rates But Vietnam Attempts to Influence Interest Rates FIXED EXCHANGE RATES NO MONETARY POLICY Technological • New technology • Nuclear supply • Nuclear disposal • Substitutes – Wind, solar, hydro • Transmission line infrastructure Economic • Regulated price of power in Dong • Moving to retail market: ↑ Prices • Price of Uranium in $ • Competition from other countries/ companies • But large demand

  5. The Recommendation - Let’s Do It! • Consistent with corporate strategy and objectives • International presence – SE Asia • Market seeking • Growing economic market • Increasing demand for power • Movement towards clean energy and decline of oil/gas resources • B&W mPOWERTM reactor appropriate for Vietnam • Flexibility in power generation • Minimizes capital infrastructure and labor demand • Rewards outweigh risks • Political stability • Assumed credible commitment to open markets and devaluation

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