Hydro stock flies as pilot rolls out

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Norway’s large industrial company Hydro, now mostly an aluminum and metals producer, won kudos from both investors and the prime minister on Wednesday when it officially decided to build a full-scale technology pilot plant at Karmøy in Western Norway. The area has been hard-hit by cutbacks in the oil and offshore industry, so the huge project will provide welcome jobs and investment.

Prime Minister Erna Solberg donned a hard-hat and helped cut cake when Hydro officially launched its new full-scale technology pilot project at Karmøy on Wednesday. PHOTO: Statsministerens kontor

Prime Minister Erna Solberg (left) donned a hard-hat and helped cut cake when Hydro officially launched its new full-scale technology pilot project at Karmøy on Wednesday. PHOTO: Statsministerens kontor

The firm that formerly went by the name Norsk Hydro said the pilot project aims to “verify the world’s most climate- and energy-efficient production of primary aluminum.” The project is expected to cost around NOK 4.3 billion (USD 500 million), but Hydro’s stock had jumped nearly 8 percent by midday on Wednesday. Investors clearly welcomed the news, along with Hydro’s strong year-end earnings that benefited from “positive currency effects and successful industry-leading improvement programs.” (external link to Hydro’s results report).

Prime Minister Erna Solberg was on hand at a meeting of company employees and top executives at Karmøy Wednesday morning, and joined in Hydro’s celebration of the project’s launch. For her, it represents a most welcome development in the business world, after months of bad news folowing the dive in the price of Norway’s other main export product, oil.

Prime Minister Solberg called the new Hydro pilot "incredibly important." ILLUSTRATION: Hydro

Prime Minister Solberg called the new Hydro pilot “incredibly important.” ILLUSTRATION: Hydro

“This is incredibly important,” Solberg said. “It means that we will continue to have good and environmentally friendly aluminum production in Norway. We will come to be world leaders in the green shift, and we will have more secure workplaces in a business we know will keep growing because we know aluminum will be an important product.”

In addition to the jobs created during construction of the pilot plant, Hydro intends to industrialize the world’s most efficient climate- and energy-effective aluminum electrolysis technology. Hydro’s chief executive, Svein Richard Brandtzæg, said the pilot would help ensure “that the Norwegian technology cluster remains the global leader in sustainable aluminum production.” The ambition, he said, is to reduce energy consumption by around 15 percent per kilo of aluminum produced, compared to the world average.

All told, the project may create 200 jobs, with around 40 to 50 them at the pilot itself. The state, which still owns a stake in Hydro, is contributing NOK 1.6 billion in funding for the project through its energy agency Enova, charged with promoting a transition to more climate- and environmentally friendly energy efficiency.

Hydro said its investment in the Karmøy technology pilot is the largest single investment in Norwegian mainland industry outside the oil and gas sector since Hydro expanded its Sunndal aluminum plant more than a decade ago. The first metal from the plant is expected in the second half of next year, with what Hydro claims will be the lowest carbon footprint in the world. Implementation of technology spin-offs to existing production lines are expected to improve productivity by an additional 200,000 tons per year by 2025.

newsinenglish.no/Nina Berglund