The path from Sam Eyde’s purchase of the Rjukan waterfall in 1902 to Hydro becoming a focused aluminium company was long, but not particularly thorny. The determined and visionary founder of Hydro was probably more interested in the idea of building the world’s biggest hydroelectric power station than how he would use all the power that was generated.
Inspiration from Siemens
Eyde, inspired by several visits to the home of the German dynamo inventor Werner von Siemens, was quick to see the opportunities in exploiting the energy from Norwegian waterfalls. Aluminium, which at that time was starting to be regarded as one of the most exciting materials for the future, would be a natural product.
But this was to prove easier said than done. Neither Sam Eyde nor his contacts in the aluminium industry saw how it would be possible to move huge quantities of raw materials from the coast far into the Norwegian mountains, where the hydroelectric power was located. And neither could they see a practical solution for transporting enormous quantities of energy from the Vemork power station in the valley of Vestfjorddalen out to the coast.
An ingenious solution, but no aluminium
The solution was ingenious: instead of manufacturing aluminium, Eyde – in collaboration with the researcher Kristian Birkeland – devised a method of using hydroelectric power for the first ever successful industrial production of fertilizer. Apart from hydroelectric power, the other main ingredient was nitrogen – which is found in air. There was fresh air in abundance up there in the mountains. Nitrogen fertilizer was to be Hydro’s most important product until far into the 1980s – and since 2004 it has been manufactured in the world’s largest fertilizer company, Yara.
Hydro’s management never quite gave up the idea of aluminium production, however. Time after time, the idea was raised. There were a number of attempts to start aluminium production using Norwegian raw materials, but none of these initiatives were successful. It was not until the Second World War that successful production finally seemed to be on the cards – financed by Hermann Göring and the German occupying power. However, the huge light metal plants on the Herøya peninsula near Porsgrunn were bombed by the Americans in 1944, just before they were due to start production.
Finally aluminium in 1963
In the early 1960s, Hydro’s fertilizer activities faced unexpected competition from new actors producing mineral fertilizer with oil and gas as the starting point. The company’s management responded by making three important strategic decisions in 1963: changing the fertilizer production process so as to use petrochemical rather than electrochemical production of ammonia, starting to build an aluminium plant at Karmøy, and entering into cooperation with five French companies with regard to oil exploration activities in the North Sea.
These decisions would form the foundation for Hydro’s powerful growth over the next 40 years.
Entering the “grown-up” realm
In 1986, Hydro bought Årdal og Sunndal Verk (ÅSV), and entered the realm of “grown-ups” as a producer of aluminium. The roots of ÅSV stretched back to 1915, when the Norwegian aluminium company NACO started building the Høyanger aluminium plant. This work was led by the same man who had built Europe’s largest hydroelectric power plant for Hydro at Notodden in 1907, followed by the world’s largest hydroelectric power station at Rjukan a couple of years later – the engineer Sigurd Kloumann.
In 2002, Hydro became the largest aluminium company in Europe, through the takeover of the German aluminium company Vereinigte Aluminiumwerke (VAW), which, incidentally, could also trace its history back to the years around 1915.
In the early 1990s, Hydro’s management initiated a process that aimed to focus attention on fewer priority areas. This process was completed on 1 October 2007, when the company’s extremely successful and profitable petroleum activities were merged with Statoil.
Hydro had come full circle – the company was back where its founder had envisaged it would be right at the very beginning: a focused aluminium company.