Rusty industrial detritus tells story of Moon's nuclear winter

Industry

Published: 05 Jan. 2023, 17:47 Updated: 05 Jan. 2023, 19:01

Rusty industrial detritus tells story of Moon's nuclear winter

Heat equipment used to build nuclear power plants sits rusty, unused, in the garage of Gilsan Engineering’s factory in Changwon, South Gyeongsang. [JEONG JONG-HOON]

In a garage at a Doosan Enerbility factory in Changwon, South Gyeongsang, disused equipment sits neatly stacked and tucked in corners, metal supports, industrial gas canisters, spans of flaky concrete and an odd assortment of slightly retro electricals.

The assorted detritus of nuclear power projects is the property of Gilsang Engineering, a Doosan Enerbility contractor. The company was decidedly underutilized during the Moon Jae-in administration, which put a moratorium on new nuclear power projects and began to shut down those in operation.

Once used 24/7, the equipment now just sits in the garage, unused and gathering dust. It has been that way for five years, according to Gilsang Engineering CEO Kim Yong-yi.

“They’re now too old to use,” said Kim. “If we want to use them again, we’d have to change all of their parts, such as electric furnaces and heat insulators, which would cost about 1 billion won [$786,361].”

Sungsan Tool’s factory looks vacant with half of its machines turned off due to lack of work. [JEONG JONG-HOON]

Last year, the company's revenue was 60.26 million won, only 4 percent of 2018's 1.46 billion won. In the 39 years he’s been in the business, he's never seen a year like the last.

Sungsan Tools, which supplies tools to manufacture steam turbines for nuclear power plants, was not able to escape the wrath of nuclear energy phase out policy, which was adopted by Moon in 2017. President Yoon Suk Yeol, inaugurated last May, promised to end the phase out and commit to strengthening the nuclear power sector.

Spring has yet to arrive for Changwon.

Many businesses closed doors, and workers lost their jobs.

Sungsan Tools was only able to pull through by supplying tools to thermal power plants.

“I had to use money out of my own pocket to manage the company,” said CEO Lee In-su. “Paychecks were cut to two-thirds, and some of the workers left.”

Lee, who established his company in 1997, said that nuclear phaseout took a toll on the company even harder than the Asian Financial Crisis of 1997.

When a reporter visited the factories around Doosan Enerbility, most were empty.

“There’s no work for us to do, so about 80 percent of the companies keep their doors open just for the sake for it,” Kim said.

Until the beginning of last year, both CEOs were seriously contemplating shutting their companies.

Sungsan Tool’s CEO Lee In-su looks over the factory machines on Jan. 2 in Changwon. [JEONG JONG-HOON]

Now, there's some hope.

The Shin-Hanul 3 and 4 — two additional nuclear power plants being built next to Shin-Hanul 1 in Uljin, North Gyeongsang — are under construction, while Unit 2 of Kori Nuclear Power Plant will resume its operation. The reactor shutdown deadline was April 2023, but President Yoon Suk Yeol’s policy to strengthen nuclear sector allowed Kori 2 to become the first nuclear power plant in Korea to extend its service.

The companies are also betting on overseas nuclear projects.

The Ministry of Trade, Industry and Energy plans to commit 3.5 trillion won to the nuclear sector this year after 2.4 trillion won last year. The Korea Atomic Industrial Forum will commit 8.9 billion won to the sector to enhance nuclear technology, consulting, and human resources.

Some companies have yet to feel the comeback.

Although the phase out crisis is behind them, economic slowdown and high interest rates are arriving. Loans taken out before the crisis are coming due with interest. With little work coming in, they are busy trying to pay back the interest, let alone the principal.

“We borrowed money from Korea SMEs and Startups Agency last year and used it to make payroll,” said Kim. “We give the bank 3.5 million a month just to pay back the interest; some of it is from our previous loans.”

“Before, we were able to get the loans with low interest rates, but such loans don’t exist anymore,” said Lee. “We've been paying back the interest for four years now. We don’t dare to make a new investment when the interest rates are around six to seven percent.”

Both CEOs say that it will take at least another full year, maybe even more, for their companies to recover.

Gilsan Engineering’s CEO Kim Yong-yi looks over the heat treatment equipment which is being stored at the factory’s garage on Jan. 2. [JEONG JONG-HOON]

Sungsan Tools have been slowly gearing up to get back on track since last November by supplying tools to construct the Shin-Hanul 3 and 4. When a reporter visited the factory on Jan. 2, about half of the factory machines were up and running.

“I can really feel the atmosphere is changing — we’re finally receiving work after having zero supply orders for the last three years,” said Lee. “It’s comforting to hear the noise from the machines when everything has been so quiet for a long time.”

For Gilsang Engineering, Kim expects orders to arrive by the latter half of 2025, after Shin-Hanul 3 and 4 begin to operate. It expects to pull through until then by doing repairs for the power plants or co-manufacturing small modular reactors.

“If the ratio of hardship and hope was 10 to 0 last year, I think the number will be adjusted to 5 on 5 some time during latter half of this year,” said Kim. “Doosan Enerbility is already giving pre-purchase orders to its contractors.”

The industry asks the government to give a little more push so that they have something to cling to until they get back on track.

“The government looks toward big companies with lots of people, but it overlooks small companies like us,” said Kim. “Although there are companies that may seem like they are on the outskirts, there are lots of companies critical to the sector, and we will be able to get by with just a little bit of support.”

“Nuclear companies can go down in a blink of an eye, but it’s extremely difficult to revive them,” said Lee. “If the government can support companies who cannot take out any more loans by fixing their interest rates for two to three years, the nuclear ecosystem can be normalized again.”

BY JEONG JONG-HOON [lee.jaelim@joongang.co.kr]