Hydro's main ambitions are:
- Carry out specific programs in all business areas,
- Capitalize on attractive positions throughout the production chain,
- Maintain a strong financial position,
- Raise unsatisfactory returns at a competitive level.
Improvement programs have been implemented in all business areas, designed specifically for each stage of the production chain, from bauxite to laminated products and based on well-established production systems in each area. Following the culture of continuous improvement, Metal Primário has established a new program for its joint smelting plants and is currently concluding its "300 Dollars" program. Bauxite & amp; Alumina, in turn, reconfirmed its overall improvement targets for 2015, despite its "From B to A" program having suffered setbacks earlier this year.
"Undoubtedly, it is a great satisfaction to be able to complete the" 300 Dollars "program as planned, but the most important thing at this stage is the ability to reconfirm the general ambition of meeting the goal of one billion Norwegian crowns in improvements with the "From B to A" program, just a few months after the setback in production this year, "says President and Chief Executive, Svein Richard Brandtzæg.
"We realize that the efforts made are already paying off, as the average production for the first two months of the fourth quarter at Alunorte has already increased to an annual level of 5.6 million tons."
Metal Primário recently concluded its improvement program of "300 Dollars" per ton, greatly strengthening its competitive position and the viability of Hydro's wholly owned foundry plants. The company also established a specific program for joint smelting factories, where the average of the improvement targets corresponds to 180 dollars per ton, to be reached by the end of 2016.
Focused on the customer, Produtos Laminados continues to work to become a global leader in innovation. The business area intends to increase its value creation, improving the quality of its product portfolio, strengthening its position as a preferred partner for its customers and increasing competitiveness through innovation. The laminated products market has been gaining ground with the replacement of other metals by aluminum and its presence in the automotive segment has been generating solid growth in demand.
The Energy business area has successfully completed several new projects, which, together with the acquisition of Vigelands Brug AS, improved operational performance. In addition, increased rainfall increased normal production in Energy from 9.5 TWh to 10.0 TWh per year. Energia continues to support other business areas in the energy area, as in the case of the contract signed with the joint smelting plant Slovalco earlier this year.
"As the aluminum business is cyclical, it is extremely important to maintain financial strength in order to compensate for downtime with strength and flexibility. The current price of many of our products remains a challenge and does not generate sustainable return, "says Brandtzæg.
"The price of aluminum is unfavorable for both Bauxite & Alumina and Metal Primário, although premium products partly compensate for this situation at Metal Primário, demonstrating the importance of our ability to maintain a solid financial position in recent years. "
The growth of aluminum demand in the world, excluding China, is estimated at 2% in 2013 and 2 to 4% in 2014. Aluminum remains promising, due to its many qualities, such as lightness and recyclability. Furthermore, the global aluminum market is expected to have a solid annual growth of 4 to 6% over the next 10 years in the long term.
Although aluminum consumes a lot of energy to be produced for the first time, the qualities of aluminum in its use phase and its ability to be infinitely recycled, without any loss of quality, make it the preferred material for a wide range of products and applications from the climatic point of view. Hydro intends to take advantage of the full potential of aluminum's climatic qualities and aims to become neutral, within a life cycle perspective, by 2020. To do so, it is based on improvements in energy efficiency in the production phase, benefits in the use phase. and increased recycling capacity to return more metal to factories.
Capital expenditures (CAPEX) in 2014 are expected to be approximately NOK 4.3 billion, compared to NOK 3.1 billion in 2013. Capital expenditures for maintenance are expected to grow from NOK 2.9 billion in 2013 to NOK 3.9 billion in 2014, partly due to the accounting effects of Produtos Laminados and a larger furnace lining at Metal Primário than normal . Capital expenditures for long-term maintenance are estimated at NOK 3.5 billion. CAPEX growth for 2014 is expected to be NOK 0.4 billion.