After years of improvement efforts motivated by the need to adapt to external challenges, we are now starting to take advantage of new opportunities. After years of talking about being part of the solution, we are now turning words into action.
In everyday operations Hydro is a producer of aluminium. In the broader picture, I see Hydro in the business of making the world lighter – by light-weighting people’s daily lives and by easing the burden of climate change by saving greenhouse gas emissions and improving energy-efficiency.
Always looking ahead
More and more discover the inherent properties of aluminium. Through innovation and product development we bring new aluminium solutions into new applications. Due to its light weight, formability, durability and endless recyclability, the growth is strikingly broad-based, spanning sectors like transportation, packaging, building & construction as well as electrical applications.
While other base metals seem to have reached the point of saturation in many markets, aluminium still has a significant potential for increased use. In 2017 we're expecting demand for aluminium to grow by a healthy 3-5 percent.
Last year we invested in future-oriented projects that we expect to be successful seen from a strategic, financial and a climate point of view. In 2017 three important symbols of the new era will be in full operation:
- The Karmøy Technology Pilot in Norway, which will produce the world’s most climate- and energy-efficient primary aluminium.
- The Automotive Line 3 in Grevenbroich, Germany, making Hydro the second-largest supplier of lightweight car parts in Europe.
- The UBC recycling line in Neuss, Germany, based on cutting-edge technology, which has already started bringing millions of used beverage cans back into the circular economy as new, first-rate aluminium products.
Aluminium cars – a driving force
Material substitution in automotive is the strongest driver for aluminium, as the most renowned automakers are substituting steel and other materials with aluminium – not only to reduce weight and save emissions, but also to improve safety and driving experience as well as taking advantage of improved design flexibility. A win-win solution for automakers, end-users, the climate – and for Hydro.
So, I couldn’t imagine any better way to celebrate 100 years of aluminium production in the North Rhine-Westphalia area of Germany this spring than by inaugurating the €130 million Automotive Line 3, taking our body-in-white capacity from 50 ktpy to 200 ktpy.
More than a quarter of Hydro’s aluminium production will now be applied by some of the most demanding automotive manufacturers in the world in their effort to light-weight the next-generation car fleet.
In Hydro we regard demanding customers as crucial for challenging us onwards for new and improved solutions and products. Our current strategy of high-grading and moving into advanced applications is taking us in the right direction.
Better, Bigger, Greener
Seizing new opportunities doesn’t mean that we have put our improvement efforts behind us. It’s in our company DNA to always improve and renew and do better tomorrow than we did yesterday – in safety, in operations, and financially.
I am pleased with how the improvement efforts are giving tangible results in safety. Our first duty is to make sure that our colleagues return home from work just as safe and sound as when they turn up. A year without fatalities and a TRI rate of 2.6 (work-related injuries per million work hours) make 2016 our best-ever, both for our own employees and contractors. We can never take safety for granted. We have to work for it and be aware every single day, aiming at zero fatalities and a TRI rate below 2 by 2020.
Improvements also materialize on the bottom-line. By delivering NOK 1.4 billion in improvements in 2016, we surpassed our NOK 1.1 billion target. It encourages me to see that our people even know how to do ‘Better’ better. It also allows us to offer a safe and reliable dividend to shareholders.
Record production at Paragominas and Alunorte in Brazil contributed significantly. For 2016 in total, the Paragominas bauxite mine produced 11.1 million tonnes of bauxite, well above its nameplate capacity, and the Alunorte refinery produced at nameplate capacity of 6.3 million tonnes of alumina. That’s ‘Bigger’ and ‘Better’ rolled into one!
I would like to thank all of our Hydro colleagues, on all levels, in all business areas and in all the countries Hydro is engaged, who helped achieve great results in 2016. They have reason to be proud.
The future is about running responsible and sustainable businesses
I am happy, not only about the results we achieve, but also by how we achieve them. In fact, compliance, responsibility and environment are not add-ons to our business, they form an integral part of all business plans, transactions and operations – the way we conduct our business.
I am convinced that it is not only necessary and possible to integrate responsibility in business, it is also good for business. Responsible conduct is not a cost or a constraint. On the contrary, acting ethical and preventive is an investment, saving risk, cost, time and reputation. It opens doors to business opportunities. It gives competitive advantages. As consumers, enterprises, NGOs and authorities demand more transparency and sustainability, there is simply no alternative to responsible conduct for companies that have an ambition to stay and to thrive.
By being a 360 degree aluminium company, fully integrated along the entire aluminium value-chain, Hydro is in a unique position to control every step of production, and be responsible – for the land, water and forests, for our employees and the communities we engage with, for the energy use and emissions in our processes, and for bringing end products back into the loop to be used over again.
As part of taking responsibility, and to contribute to sustainable development, Hydro has signed on to the UN Global Compact, participates in the World Business Council for Sustainable Development and the International Council on Mining and Metals (ICMM), and is included on the Dow Jones Sustainability Indices, the UN Global Compact 100 and the FTSE4Good list.
We are on our way to make Hydro carbon neutral in a lifecycle perspective by 2020. We are sourcing most of our primary aluminium production with hydropower, and now even with wind power. The Karmøy Technology Pilot will set new standards for primary production. In Brazil we are now teaming up with Shell to bring natural gas to the state of Pará. Switching to natural gas in our alumina refinery there will benefit both emissions and financials, and make LNG available to local industry and transportation in our Brazilian home state.
Big vision made real
By being part of the solution to some of the mega trends of our time, light-weighting being one of them – supported by determined implementation of ever new steps under the Better, Bigger, Greener aspiration – we are ready to set out for another 100 years.
It’s an inherent strength of our Hydro Way. We have the patience to take the long-term perspective, and the eagerness to use every opportunity, every day, to make things happen.