Hydro prepares to close Søderberg at Høyanger
(June 16, 2005) Hydros Board of Directors decided today to support the closure at the end of 2005 of the Søderberg production line at Høyanger, Norway.
Continuing production into 2006 will result in considerable economic losses. This, along with opportunities for alternative employment in Hydro this year, means that closure will occur in the autumn of 2005. The Norwegian authorities' environmental demands require that the Søderberg potline must be shut down by the end of 2006.
In order to achieve its objective of closing the Søderberg plant in Høyanger by year's end, the company intends to intensify its efforts to find alternative jobs in Høyanger, in conjunction with employee representatives and municipal officials. Should it transpire that these efforts do not produce a satisfactory result, full or partial production might well be maintained for a period exceeding 31. December 2005, though for no longer than 1 April 2006.
 PRODUCT HANDLING: Sheet ingot is the main product to be shipped out from Hydro's aluminium plant in Høyanger, Norway. (Photo: Dag Sunnanå) |
| |
Hydro currently has vacant positions at production sites in Norway and on the Norwegian continental shelf, and has identified about 70 permanent and temporary positions that will be offered to the 90 or so Høyanger employees affected by the closure of the Søderberg production line in Høyanger. Hydro has long cooperated with local authorities and others regarding local business development, and about 60 new positions are expected to be established in Høyanger by the end of 2006.
Søderberg technology is based on open cells, produces higher emissions and yields lower productivity than more modern cells with pre-baked anodes. New emissions regulations require Hydro to close down Søderberg-based production in Høyanger and Årdal by the end of 2006.
A possible extension of the Søderberg line in Årdal beyond 2006 has been evaluated. At present forward prices, such an extension will be unprofitable. Should favorable developments take place, however, a new evaluation will be made with a final decision by the end of the first quarter of 2006.
The number of employees at Årdal who are directly affected by the closure of the Søderberg-based line is about 160.
The expected closure cost for Høyanger is about NOK 110 million, including personnel costs and demolition and clean-up of the site. The respective costs for the Årdal facility are about NOK 250 million.
Following the closure of the Søderberg-based line, Hydro Aluminium in Høyanger will have an annual production capacity of 55,000 tonnes and will have about 140 employees. Hydro will continue to supply high-quality aluminium to the neighboring firm, Fundo, which produces aluminium automobile wheels.
Following the closure of the Søderberg-based line at Årdal, the location will produce 177,000 tonnes of primary aluminium with modern technology. In addition, Hydro will continue to operate the cast house operations, a technology center and the Nordic region’s largest producer of anodes at Årdal.
| 