Jon-Harald Nilsen: "Together we can create value for our customers"
(Jan. 7, 2002) "VAW and Hydro Aluminium fit together like two peas in a pod. The merger will create a strong, innovative company with firm global positions in metal and semi-fabrication, says executive vice president Jon-Harald Nilsen, responsible for Light Metals in Norsk Hydro.
 Jon-Harald Nilsen |
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He points out that the purchase of VAW creates a solid platform for growth and value creation.
"The combination of VAW's strength in rolled products and Hydro's leading position in extruded products enables us to offer customers a broader product spectrum and move closer to aluminium end users. We will also be able to increase our recycling activities.
"We are already the largest producer of aluminium profiles in Europe. The extrusion market is 25 percent of the total aluminium market. The market for rolled products, where VAW is a leading player, is twice as big. The German company will bring attractive products, modern plants and not least size and strength into an area where we so far have only been a niche player.
"Together we will also be able to dig deeper into the scrap heap and take on a greater part of the recycling value chain. This is one of the factors that will make aluminium the material of the future.
"We will be leaders in a large number of significant market segments both in Europe and worldwide. These include important areas directed towards the automotive industry, such as automotive structures, automotive castings and heat transfer. But we will also be market leaders for lithoplates for the graphics industry and aluminium foil The acquisition of the French company Technal, which is expected to be completed within a few days, will give us a leading position in aluminium building systems."
Jon-Harald Nilsen points out that Hydro Aluminium will belong to the top league of the aluminium industry. Through this acquisition, Hydro will realize its strategy of being one of the three leading aluminium companies in the world.
"Together with VAW, Hydro is a clear leader in Europe. Hydro Aluminium will now also gain a base for further growth in the US. Both companies already have some semi-fabrication activities in Asia. The metal capacity we now gain in Australia also offers an attractive opportunity for rapid growth in Asia, where Hydro's presence so far has been modest.
"The new positions brought by VAW make it possible for the integrated company to develop progressive business models, such as Hydro's metal supplier system, where we have a dedicated casting operation and have created considerable value for customers through supplying an extended product package. This includes technical and commercial support in addition to the actual aluminium product. We can now further develop this model together with VAW's units in North America and Australasia," says Nilsen.
"The same applies to recycling. With VAW's range of products and partners we can literally dig deeper into the scrap heap. We have experience of creating prime quality products from scrap metal that we can share with VAW. Together we can develop this area into a really strong and progressive part of the company. The potential for recycled aluminium is unique and there is no company in a better position than Hydro and VAW to develop this.
"We will also be the clear leader in supplying the automotive industry with aluminium solutions. Together Hydro and VAW will be a more complete supplier," he says.
Nilsen says that the new company will be a center of excellence in aluminium. VAW and Hydro are both known for their expertise and focus. This basis can now be developed jointly.
The new company will be organized in six sectors in the business area Hydro Aluminium. The organization will build on extensive studies in connection with Hydro's own reorganization work.
"We can therefore act fast. We are preparing the organization to be cost competitive, meet market challenges and fulfill our ambitions for growth.
"We can see that the integration of these two companies will give considerable effects. It will be possible to realize synergies through sharing best practice within the organization. We have already carried out an extensive project within Hydro's light metals organization, where we have focused on the efficiency of our support functions. This knowledge will be useful when we now look at the whole new company."
"We have established a dedicated integration team which shall manage the merger, support line management and ensure that this work builds on best practice in both companies.
"The new company will be called Hydro Aluminium and will be part of Norsk Hydro, but a decisive factor for our success is that we build on the best in each of the companies," Nilsen says.
"We have a lot to learn from our colleagues who have achieved significant results and have been pioneers within important parts of our industry.
"We can also improve our results in areas such as health, environment and safety through learning from each other. I am aware that we have to strive to lower the injury statistics in all areas of our operation.
"We believe there is potential for sharper focus on safety in the present VAW organization. Our aim must be that we can offer all employees a safe and pleasant working environment.
"Not least, Hydro's top management will focus on achieving a fast development in this area," says Nilsen.
"We will also become an international operation in that we will have sectors that are located in Germany, Switzerland and the US, in addition to Oslo," Nilsen says.
He emphasizes that one important task in the next weeks and months will be to address the cultural challenges the merger involves.
"We have every chance of success, but we will have to create a single organizational culture. This is an item that both companies will have to put at the top of their agenda when we start working together."
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