Hydro is also working to simplify its business model in accordance with a strengthened and expanded Corporate Management Board, which will have a more concentrated focus on operations and markets.
About 40 percent of the cost savings are related to external costs for services and consultants. The remaining savings will be achieved by a reduced internal activity level and a corresponding reduction in manning. Hydro estimates that about 250-300 employees in staff and support functions will be made redundant as a consequence of these savings.
The majority of the costs savings are expected to have full effect from the first quarter of 2010, while some savings will take longer before coming into effect.
Hydro has already decided to implement wide-ranging measures to meet the unprecedented market situation. Primary aluminium production will be reduced by 400,000 tonnes per year, or 23 percent, compared to 2008 by the end of April this year. This will reduce manning by about 900 people. Alumina production at the part-owned Alpart refinery has been reduced by 50 percent, corresponding to 290,000 tonnes per year for Hydro’s share.
Production adjustments in Aluminium Products will reduce manning by 2,200 people by the end of 2009 compared to the middle of 2008.
Planned investments in 2009, excluding Qatalum, have been reduced by 40 percent compared to 2008.
Further improvement measures are under evaluation in light of the current market situation.
Contact Tone Dahle
Telephone +47 22532548
Cellular +47 95168459
Contact Stefan Solberg
Telephone +47 22539280
Cellular +47 91727528
Certain statements included within this announcement contain forward-looking information, including, without limitation, those relating to (a) forecasts, projections and estimates, (b) statements of management’s plans, objectives and strategies for Hydro, such as planned expansions, investments or other projects, (c) targeted production volumes and costs, capacities or rates, start-up costs, cost reductions and profit objectives, (d) various expectations about future developments in Hydro’s markets, particularly prices, supply and demand and competition, (e) results of operations, (f) margins, (g) growth rates, (h) risk management, as well as (i) statements preceded by “expected”, “scheduled”, “targeted”, “planned”, “proposed”, “intended” or similar statements.
Although we believe that the expectations reflected in such forward-looking statements are reasonable, these forward-looking statements are based on a number of assumptions and forecasts that, by their nature, involve risk and uncertainty. Various factors could cause our actual results to differ materially from those projected in a forward-looking statement or affect the extent to which a particular projection is realized. Factors that could cause these differences include, but are not limited to: our continued ability to reposition and restructure our upstream and downstream aluminium business; changes in availability and cost of energy and raw materials; global supply and demand for aluminium and aluminium products; world economic growth, including rates of inflation and industrial production; changes in the relative value of currencies and the value of commodity contracts; trends in Hydro’s key markets and competition; and legislative, regulatory and political factors.
No assurance can be given that such expectations will prove to have been correct. Hydro disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.