Hydro reduces further its metal production at Karmøy, Norway

(Jan. 10, 2003) Hydro Aluminium is to further reduce its metal production at Karmøy, due to the power supply situation in the current energy market and weak demands for extrusion ingot in Europe.

Hydro Aluminium will reduce the amperage of its Søderberg facility at Karmøy with immediate effect. This will result in a reduction in metal production and a corresponding reduction in energy consumption. This production cut is planned to last until the end of April.

This decision means that the total reduction in energy consumption at Karmøy will be approximately 80 GWh until the end of April, which in turn means that the production of primary aluminium during the same period will be reduced by about 5,000 tonnes. The excess energy will be sold on the open Nordic energy market.

These measures will be implemented with no layoffs, but the use of temps, overtime, etc. will be curtailed.

Hydro Aluminium announced on 16 December 2002 that production in its Søderberg facility at Karmøy would be temporarily reduced. The current action means further reductions.

Hydro Aluminium has also closed its old Søderberg facility at Hydro Aluminium Sunndal in Norway much faster than planned. This has resulted in energy consumption being reduced by about 24 GWh and metal production by about 1,500 tonnes.

The situation in the extrusion ingot market is generally much weaker at the start of a new year and this market is also affected by, among other things, activities in the construction and building sectors in Europe. If necessary, Hydro Aluminium can meet demands for extrusion ingot by increasing its remelting and recycling activities at its casthouse at Karmøy or its other casthouses in Europe. A strong Norwegian krone against the American dollar, which is the basis for the pricing of aluminium products, will have a negative effect on the financial results of the metal plant at Karmøy.