The time Eriksen spent as a prisoner is described in a book by Kristian Anker Olsen, which was published ten years later in connection with Hydro’s 50th anniversary:
There was an American officers’ camp was right next to the camp for Norwegian officers. Given the Americans’ ability to distinguish between the important and the unimportant, it was not difficult for managing director Eriksen to convince them that he was a political, civilian prisoner. He made it clear how important it was for him to get to London as quickly as possible to get in touch with the Norwegian and Allied authorities and make the necessary arrangements for Norsk Hydro’s new start as a free Norwegian export company in an area that would clearly play a vital role in the recovery of Norway and Western Europe. And so Hydro’s managing director was released and was back at work sooner than would otherwise have been possible.
On 1 June 1945, Bjarne Eriksen was back at the helm of Hydro. There was a great deal to do. The company had sustained considerable damage during the war years. Rebuilding had started, but much remained. The bomb damage alone had been evaluated at NOK 23.7 million (nearly EUR 3 million at 2003 exchange rate).
Clear first, then rebuild
The rebuilding work ended up costing NOK 50 million (around EUR 6 million at 2003 exchange rate). Hydro had insurance coverage – also against war damage – but ended up paying one third of the costs itself. The company’s annual turnover in the years after 1945 was around NOK 150-200 million (EUR 18-25 million).
It was of course necessary to sort out ownership questions and other complex issues that had arisen from the war: an enforced share issue in 1941, confiscation of shares, compensation payments, etc. In this connection, the state took on a 46 per cent ownership stake in Hydro. Many formal decisions were pushed through at the company’s annual general meeting in 1946.
And then expand
There was considerable overproduction of nitrogen in the international arena just after the war. Hydro’s management believed, however, that demand would increase and that it would be better in the long-term to be a major producer than a small one. In the second half of the forties, nitrogen production increased in East and West Germany, and in particular in the US. The risks involved in expanding capacity were significant.
However, Hydro considered that it had an advantage in its hydroelectric power. And so it was decided – Hydro would expand.
New projects were set up: increased nitrogen production, increased complex (NPK) fertilizer production, a new factory for road salt and a factory for formic acid. Then there were plans for a fertilizer factory in Glomfjord in the north and factories for magnesium and polyvinyl chloride (PVC) at Herøya.
Of course, new growth required investment, but on the whole Hydro’s own financial position was good. Even during the war years, the company had made a profit, apart from the very dramatic production year 1943/44. The company was credit-worthy, and in addition it was possible to pay for much of the new investment with its own capital.
Growth through power
Hydro’s access to hydroelectric power provided the foundation for industrial growth. During the war years, a project had been started to develop Mårvatn, 1,200 meters above sea level, and around 80 kilometers east of Rjukan. Hydro now saw this as an obvious project to execute.
Mårvatn had been taken over by the state after the war. But already in the summer of 1945, an agreement was signed that ensured Hydro full coverage of the costs of completing the project. A more extensive agreement was secured before the end of the year. Now the industrial expansion in Telemark could start.
Forty percent profit
The first ten years after the Second World War were remarkable in every sense of the word. The company made heavy investments, production increased, turnover rose from around NOK 120 million (EUR 15 million at 2003 exchange rate) in the financial year 1945/46 to around NOK 400 million (EUR 50 million at 2003 exchange rate) in the financial year 1954/55. The total turnover during this period was NOK 2 billion (around EUR 250 million at 2003 exchange rate). The operating profit was nearly NOK 840 million (around (EUR 100 million at 2003 exchange rate). Of course it goes without saying that the krone was worth considerably more than it is today.
The number of employees increased from around 2,500 in 1945 to around 5000 in 1955. The figures speak for themselves. These were years of great expansion and high returns, both for the company and for the shareholders.
The ten-year expansion and new construction programme that started in 1945 required an investment of NOK 600 million (around EUR 74 million at 2003 exchange rate). This was twice the amount invested in the preceding 40 years.
These investments were mainly in connection with:
- hydroelectric and other installations at Rjukan
- new plants at Glomfjord,
- extension of the ammonia plants at Rjukan in connection with increased power equivalent to the extensions at Herøya for processing ammonia from Rjukan and Glomfjord,
- completion and start-up of magnesium at Herøya,
- new PVC production plant at Herøya,
- NPK fertilizer factory at Glomfjord,
- efficiency improvements,
- new sack factory and central workshop at Notodden,
- welfare facilities, etc.