Sept. 1, 2000

Nuclear Cities Initiative Connects Dialysis Provider with Russian Plant

SAROV, Russia – The U.S. Department of Energy’s Lawrence Livermore National Laboratory today announced that a former Russian weapons manufacturing plant and Fresenius Medical Care of Lexington, Massachusetts intend to create a joint venture for high-quality manufacture of kidney dialysis equipment. The negotiations were led by representatives from the Laboratory under the Energy Department’s Nuclear Cities Initiative and marks the first time any Western company plans to work with a former Russian weapons plant.

The intention to create a joint venture between Fresenius Medical Care and the Russian Avangard plant was announced Wednesday, August 30, 2000 in a ceremony involving U.S. Secretary of Energy Bill Richardson and Russian Federal Minister of Atomic Energy Evgeny Adamov.

The Department of Energy’s Lawrence Livermore Lab played the lead role in the negotiations, which began almost a year ago. Since then, Avangard has moved security fences and operations so that, without compromising security, Westerners including Secretary Richardson could for the first time enter the top secret plant.

Project cost would be approximately $8 million, including contributions from DOE, Fresenius Medical Care and Minatom, the Russian Ministry of Atomic Energy. The goal of the project is to build two kidney dialysis equipment assembly lines that would be operational by the end of 2002.

Ann Heywood of Lawrence Livermore National Laboratory commented, "This project is extraordinarily gratifying because it responds to so many important needs. It provides a stable source of commercial sector jobs to Russians who might otherwise be unemployed or building weapons, it opens an important link between Western industry and the Russian economy, and it will in time provide high-quality manufacturing of dialysis equipment.

"DOE, the Russians and Fresenius Medical Care are all to be congratulated," said Heywood.

The partnership will be the first between Avangard, a U.S. Department of Energy laboratory (Lawrence Livermore) and Western industry. Sarov is a closed city that virtually no Westerner can enter. Since March, Lawrence Livermore managers have been working with representatives of Avangard management and Minatom to finalize details that would pave the way for an agreement between Fresenius Medical Care and Avangard, gaining unprecedented entrance to both the city and manufacturing plant. Under the Nuclear Cities Initiative, DOE provided funding to move security perimeters.

The goal of the initiative is to create meaningful civilian employment and convert Russian employees from weapons work to help enable the downsizing of Russian weapons facilities.

Yuri Zavalishin, the director of Avangard, says the joint venture between his facility and Fresenius Medical Care will "establish our plant as a global contributor in medical technologies. Through this partnership we will be able to open our gates so people can see the value of what we can do."

The collaboration is the work of Ann Heywood, who heads the Lab’s Russian medical technologies program in support of NCI, and Jim Trebes, of the Lab’s Medical Technology Program, through the Nonproliferation, Arms Control & International Security Directorate’s Proliferation Prevention and Arms Control (PPAC) program.

"This has been a tremendous team effort between the Lab, DOE, Fresenius Medical Care and our Russian colleagues," said Bill Dunlop, director of PPAC. "This work is proof that industry can come into Russia’s closed cities and provide valuable work to scientists and engineers."

Fresenius Medical Care AG is the world’s largest integrated provider of products and services for individuals with chronic kidney failure, a condition that affects some 980,000 individuals worldwide. Through its network of over 1,200 dialysis clinics in the United States, Europe, Latin America and Asia Pacific, Fresenius Medical Care provides dialysis treatment to almost 88,000 patients around the globe. Fresenius Medical Care is also the world’s leading provider of dialysis products such as hemo-dialysis machines, dialyzers and related disposable products.

Founded in 1952, Lawrence Livermore National Laboratory is a national security laboratory, with a mission to ensure national security and apply science and technology to the important issues of our time. Lawrence Livermore National Laboratory is managed by the University of California for the U.S. Department of Energy.