July 17 (Bloomberg) -- Rolls-Royce Group Plc, the world's second-biggest maker of aircraft engines, plans to set up a nuclear division to manufacture equipment and provide advice to governments on atomic energy programs.

The London-based company estimates that by 2023 the value of work in the civil nuclear industry will rise to 50 billion pounds ($100 billion) a year from 30 billion pounds today. Rolls-Royce has 2,000 employees in the U.K., France and the U.S. who do nuclear-energy work such as maintaining power plants for U.K. Royal Navy submarines, the company said today in a statement.

``Our experience is directly applicable to all phases of new-build programs that are planned in the U.K. and globally, and also to the upgrade of existing plants,'' Chief Executive Officer John Rose said in the statement. Rolls-Royce's nuclear capabilities are ``matched by only a handful of companies worldwide,'' he added.

Defense and services companies are flocking to nuclear work, including decommissioning and providing training and clean-up. Lockheed Martin Corp., the world's biggest military supplier, and Serco Group Plc, operator of London's Docklands Light Railway, are among companies seeking nuclear contracts. The U.K. government said in January it plans to build nuclear power stations for the first time in more than a decade.

Aviation Reliance

Rolls-Royce's stock has tumbled 34 percent this year amid concern that airlines, struggling with spiraling fuel costs, will cutback on orders and ground some of their planes. The company makes about half of its revenue from long-term service contracts for engines and turbines.

Rolls-Royce rose 22.75 pence, or 6.9 percent, to 351.75 pence in London trading. The company has a market value of 6.4 billion pounds.

The U.K. company's current atomic-energy work includes supplying safety instrumentation and control devices for France's 58 reactors. Rolls-Royce said it provides control-room monitoring systems for almost half of the 104 nuclear reactors in the U.S. and has contracts in China and the Czech Republic.

Rolls said separately that it won orders from leasing companies AWAS of Dublin and LCAL of Dubai to power Airbus SAS A330 and Boeing Co. 787 Dreamliner widebody planes. The contracts are worth almost $400 million at list prices, the company said.

To contact the reporter on this story: Steve Rothwell in London at srothwell@bloomberg.net

Last Updated: July 17, 2008 12:35 EDT