Hydro is positioned for growth, and ready to invest in good projects with the necessary prerequisites – both internationally and in Norway, says President and CEO Eivind Reiten. He sees no contradiction between growth abroad and growth at home: "While some people present this as a matter of “either/or”, we want to do both."
The statement from Eivind Reiten was published in the Norwegian national newspaper Aftenposten on Tuesday. Reiten's signed chronicle, in extenso, can be found below.
Not either/or, but both
By Hydro’s President and CEO, Eivind Reiten
Hydro is positioned for growth – and much of this growth will take place internationally. There is no contradiction, however, between growth abroad and growth at home. While some people present this as a matter of “either/or”, we want to do both.
An example of this is when we today lay the foundation stone for Qatalum, which marks the construction start for one of the world’s largest aluminium plants, in Qatar. A huge project “abroad”, based on competence and technology which we are continuously developing here in Norway.
Qatalum is Hydro’s first new project as a focused aluminium company, after Hydro’s oil and gas activities became part of the new energy company StatoilHydro this autumn. Aluminium is the metal of the future, and Hydro’s future is in aluminium. The milestone we witnessed today proves once again that a hundred years of experience from industrial construction and energy production in Norway provides ballast, that in turn leads to future-oriented opportunities internationally.
The project is huge. In two years’ time, the new aluminium plant in Qatar will be ready to commence production. During the initial stage, 585,000 tonnes of aluminium will be produced annually. If everything falls into place, Qatalum’s capacity will later be doubled, giving an annual production of 1.2 million tonnes. This far exceeds total Norwegian aluminium production, and illustrates the dimensions that are required if new plants are to be able to compete in a long-term perspective.
Even more importantly, the project is good. It is cost-effective, and gives Hydro substantial production – with proximity to the Asian markets. Qatalum has been secured long-term access to reasonably priced power – not least thanks to our 50/50 partnership with Qatar Petroleum, which has been one of Hydro’s partners in cooperation for 35 years, both in the production of fertilizers and plastic, and now aluminium.
Furthermore, Qatalum is in many ways a Norwegian project. It is Norwegian competence and technology that mean that Hydro – with this gigantic project – can consolidate its position as one of the world’s leading producers of aluminium. Hydro’s self-developed technology has been researched in Årdal, used with success in Sunndal, and now forms the basis for what may be the world’s most cost-efficient, energy-efficient, and eco-efficient aluminium plant. Norwegian operators, managers and experts will run the plant for quite some time. And even if mega-projects of this kind are not easy to envisage in Norway in the time ahead, this form of technology delivery makes an important contribution to maintaining the Norwegian “aluminium cluster”.
Aluminium is an exciting material, which has experienced substantial increase in demand year after year, not least from China. Aluminium is forever gaining additional areas of use and supporters, due to its special qualities and usability. Aluminium makes buildings more energy-efficient, gives food products a longer shelf life, and makes transport simpler and less energy-intensive.
The most important quality aluminium has, from an environmental perspective, is that it can be remelted and used over and over again, with a fraction of the energy input required for production of primary metal. In a lifecycle perspective, aluminium is climate neutral. In its new applications – and in competition with other metals and materials – aluminium can contribute to solving climate challenges.
Just in order to maintain its share of a rapidly-growing market, Hydro must invest in new production capacity in the years ahead. And in order to be the best in the industry (for Hydro, it is more important to be best than biggest) we must make continuous improvements in the technology that makes lower energy consumption possible, as well as leading to even less environmental impact and even lower costs. These are things we are constantly researching and working towards, both in Årdal, Sunndal and Karmøy.
The fact that today’s milestone proves that Hydro is growing internationally, then, is not in any way in opposition to growth at home. Rather, international success contributes to strengthening the foundation for continued development in Norway – in the same way as the technological development we are working on in Norway proves an asset in our international efforts.
Qatalum is undoubtedly a major investment abroad. Our last major investment was here in Norway, when we spent NOK 6 billion on building one of the world’s best aluminium plants in Sunndal a few years ago. If we succeed in securing power at a competitive price, our next project could be a new and modern aluminium plant at Karmøy, now that stricter environmental legislation means that the technology there must be phased out in a few years’ time.
Hydro is positioned for growth, and ready to invest in good projects with the necessary prerequisites – both internationally and in Norway. Qatalum is an important milestone in Hydro’s history. Even though the actual plant is being built in Qatar, it is being built with Norwegian competence, and to the highest degree it represents a development of the Norwegian aluminium industry.