Richard Blackwell
Globe and Mail
October 1, 2006

It’s the world’s biggest nuclear power company, and a major player in Canada’s electrical distribution, nuclear maintenance and uranium mining business, but Areva Group’s name is no household word in this country.

The French nuclear giant wants to change that, and it hopes a higher profile will help it gain a huge breakthrough in Canada: the sale of a new nuclear reactor for Ontario’s power grid.

The task of beefing up the company’s image with the public, politicians and the business community has been handed to a Frenchman, Armand Laferrère, who landed in Canada in July to become president of Areva Canada Inc. A former vice-president of strategy based in Paris, he spent much of the summer introducing himself at Areva’s far-flung operations across Canada.

It’s the first time Areva has had a Canadian-based executive responsible for all of its businesses in Canada. Previously, each unit reported directly to divisional or regional heads in France or the United States. “That wasn’t the best way to be visible in Canada or to be [perceived as] Canadian,” Mr. Laferrère, 38, acknowledged in an interview at his spartan office in a low-rise building in Pickering, Ont., just east of Toronto. “We were managing the Canadian operations too much through the U.S. or France.”

One drawback of the old structure, he said, was it hampered forging crucial joint ventures and alliances with Canadian companies.

To cement its corporate identity, the Areva name is being firmly attached to each Canadian business. That means, for example, its Saskatchewan uranium mining arm, previously called Cogema Resources Inc., is now known as Areva Resources Canada Inc.

Those already familiar with Areva laud it as an excellent corporate citizen. Jay Fredericks, Saskatchewan’s director of mineral policy, said Areva is an “extremely progressive” company when it comes to training, and it is a leader in hiring First Nations employees at its uranium mining operations in northern Saskatchewan. Hiring Mr. Laferrère to oversee all its activities “shows Areva is making a long-term commitment to their operations in Canada,” Mr. Fredericks said.

Areva’s low profile stems partly from the fact that the French parent company is itself a kludge of various nuclear businesses and public entities. It was created five years ago by combining the industrial portions of the French government’s nuclear power operations with uranium miner Cogema and reactor engineering firm Framatome ANP. The transmission and distribution business was purchased from French conglomerate Alstom SA in 2004.

Now, about 85 per cent of Areva is owned by an arm of the French government, while 15 per cent is in a public float. The mergers at the parent company brought a number of Canadian operations into the fold:

– Areva Resources has ownership stakes in uranium mines in Saskatchewan, and is exploring for more in Saskatchewan, Alberta and Nunuvut.

– The transmission and distribution arm, Areva T&D Canada Inc., sells products such as connectors, switches and substations, counts Hydro Québec as a big customer, but also sells to utilities in Ontario, Alberta and British Columbia.

– Areva NP Canada Ltd., the nuclear maintenance arm, performs engineering, plant modifications and decontamination at existing Canadian nuclear plants.

Together, the three groups employ about 1,100 people.

But Areva’s biggest coup would be the sale of one of its reactors for the expansion of Ontario’s nuclear production capacity. Ontario Power Generation Inc. and Bruce Power, the two current nuclear operators in Ontario, have both said they’ll consider a range of vendors for the installation of new reactors. For the first time they’ll look beyond their traditional supplier: Atomic Energy of Canada Ltd. with its Canadian designed CANDU reactor.

While decisions are likely at least two years away, Mr. Laferrère will be spending that time selling the virtues of Areva reactors, and enhancing Areva’s image as a Canadian corporate citizen. “We’re not taking part [in the bidding process] as if we’re invading from outside,” he said. “We’re a long-term player. We’re not a raider or a predator.”

Areva will pledge as much as 70-per-cent Canadian content in new reactors, by sourcing materials, labour and engineering skills here. Canada’s nuclear industry will gain skills in light-water reactors if Areva wins the contract, he says, complementing Canadian expertise in AECL’s heavy-water CANDUs.

Mr. Laferrère won’t rule out some kind of joint venture with AECL, and says he’s already made “indirect contact” with the Canadian company about working together.

As for rumours this past spring that Areva might try to buy AECL, that “is not the likeliest scenario” he said. AECL is viewed as an “icon” of the country, he said, and it has indicated it is not for sale.

Mr. Laferrère wouldn’t criticize the CANDU technology directly. “Canadian pride [in the technology] is justified,” he said, adding quickly that light-water technology such as Areva’s is now far more widely used around the world. The bottom line: Areva’s reactors would give Ontario reliable, cheap and long-lasting power.

Tom Adams, executive director of Toronto-based energy watchdog Energy Probe, said Areva has a good chance of landing a Canadian nuclear power plant contract, because CANDU reactors have had so many problems that dented their reputation. Areva is also the only company with a latest-generation reactor under construction – in Finland – although Mr. Adams noted that project is about a year behind schedule.

But the potential Canadian market for new nukes extends beyond Ontario. Areva will look into possible sale of nuclear reactors to the oil patch, to aid in the energy-intensive mining of the Alberta tar sands.

Mr. Laferrère said he has already had some preliminary talks with players in the oil industry. “There could be room for an alliance, and I will explore this,” he said.