Today, the Norwegian Minister of Trade and Industry, Ansgar Gabrielsen, is visiting Hydro's extrusion facility outside Sao Paulo, Brazil Hydro Aluminio Acro. Within a short time frame, Hydro has grown to become the third largest extrusion company in Brazil and a key player in the Brazilian aluminium market.
In 1997, Hydro acquired the relatively small family owned extrusion company called Acro, later renamed Hydro Aluminio Acro. The company, located in the state of Sao Paulo, is active in three fields – general extrusions, building systems and heat transfer.
Since the acquisition, Hydro Aluminio Acro's results have improved tremendously. Production has more than doubled, and the company currently holds a market share of 14%, making it the third largest extrusion company in Brazil.
"By applying Hydro's technological competence and experience from running extrusion operations worldwide, we have grown to become a key player in the Brazilian extrusion market. In addition to our focus on creating financial results, we place great importance on improving safety conditions. We also want to be an active partner in the local community and have therefore engaged in several local initiatives," Eivind Reiten, President and CEO of Norsk Hydro, says.
Safety benchmark
Hydro Aluminio Acro's performance within health and safety has improved dramatically since the acquisition in 1997. In fact, Acro has actually become the benchmark of good safety performance in Hydro and was awarded the company's safety prize for 2003.
"The safety results at Acro confirm that there is a clear connection between good safety results and good operations. When people work carefully and systematically, all processes are improved. High regularity in production means fewer stops and less non-conformance, greater focus on what is important, and altogether better results," Reiten says.
Building on Hydro's experience from construction and operations of aluminium remelt facilities worldwide, a new remelter was constructed adjacent to Acro. Production started in 2002, and it has capacity to produce most of Acro's billet needs.
Long history in Brazil
Since Hydro first established interests in Brazil in 1974, the company's activities in this country have grown significantly. Today, Hydro has 1,300 employees located in Brazil, generating annual revenues of approximately USD 600 million.
"Brazil is a big market offering significant opportunities for growth. Being present in Brazil gives a good foothold for doing business in the Latin-America region," Reiten says.
In addition to its position as the third largest aluminium extrusion company, Hydro Aluminium is present with aluminium activities throughout the entire value chain; from the mining of bauxite to delivering extruded products. Hydro is also one of the four largest suppliers of mineral fertilizers in Brazil, with a market share of 9%.
Committed to further investments
Since establishing in Brazil, Hydro has made accumulated investments of more than USD 400 million in Brazil. Just this summer, the company committed to further investments.
Hydro holds a 34% interest in the alumina refinery Alumina do Norte do Brasil SA (Alunorte). Recently, the shareholders of Alunorte decided to commence a second expansion of the plant, following the successful completion of the first expansion earlier this year. With Alunorte offering some of the lowest conversion costs in the alumina industry, Hydro is effectively strengthening its cost position and competitiveness as a global aluminium company. Alunorte constitutes the backbone of Hydro worldwide alumina supply.
Upon completion of the second expansion in 2006, the Alunorte refinery will have a total capacity of more than 4 million tons per year and become the largest alumina refinery in the world. After completion of the second expansion, Hydro will increase supplies of alumina from Alunorte to its global primary aluminium system with more than 600,000 tonnes to an estimated 1.5 million tonnes per year, which approximately corresponds to the total need of Hydro.s Norwegian aluminium production.
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