Knowledge

After long-term political pressure to consolidate and privatise the Norwegian aluminium industry, ÅSV and Norsk Hydro merged in 1986. The new company Hydro Aluminium thus became the new owner of the factory in Holmestrand. With Hydro as the owner, the focus was on international expansion. Hydro had not been an aluminium company for long when the merger was a fact.

They established themselves in the aluminium industry in 1963, when they established the Alnor smelter on Karmøy with the American company Harvey. Hydro took over the plant in 1973, and a number of European extrusion plants as part of a deal with Alcan in the late 1970s. Hydro’s position in further processing was the reason why politicians believed it was important for ÅSV to merge with them, although ÅSV was a significantly larger metal producer.

While ÅSV only refined just under 20% of its metal, Hydro did so with almost 80% of its. Increasing the degree of refining was seen as important for several reasons. It could secure jobs that required higher expertise, which fitted well with the modernization of the Norwegian economy. It also provided greater value creation than exporting primary aluminum, also called "frozen electricity". Hydro could use capital from its oil-related business to modernize the industry, and its large international network and reputation were seen as a competitive advantage in a demanding period for the aluminum industry.

Reorganizations and automation

Markets improved just after the merger, and Hydro Aluminum focused on strengthening its position within rolling and extrusions. The company’s only rolling mills were those at Karmøy and Holmestrand. Profitability was higher at Karmøy, and Nordisk, which was renamed Hydro Aluminum Holmestrand, was put to the test. The company underwent major reorganizations, production was automated and consolidated around semi-finished products and the number of employees further reduced, a process that started long before the merger. The factory thus had a different function than being a buyer of primary metal a main centre for research and development. Production was concentrated around rolling and coating of strip, while the factory once again became involved in collaboration with Norwegian and foreign research environments. Although productivity had doubled at the turn of the 1990s, production costs were still considered too high by Hydro's management. The solution was to focus on a new source of metal.

Focus on recycling

Since it was not possible to increase the prices of the products further, the big question became how to reduce production costs. The answer was to rely on recycling. Remelting was nothing new in Holmestrand. Strip from the rolling process had always been reused, but remelting on a larger scale would require major investments in technology and knowledge. Basing the business on recycling meant that one had to buy scrap metal in large quantities and get control over what this scrap contained. The factory in Holmestrand could choose between a) obtaining scrap with a known content, b) mapping what the content in the metal from the various suppliers and c) introducing processes to balance the content in the melt itself.

The Holmestrand factory pursued all of these strategies. In this work, the company's long experience as a knowledge centre within metallurgy and surface treatment was important. The factory's combined expertise from all stages of production made it possible to experiment with new methods within casting, rolling and painting. In 1992, a new plant with a recycling capacity of 90,000 tons was in place. By 1994, the aluminum industry in Holmestrand was in the clear.

Purely semi-finished production

Hydro Aluminium Holmestrand became a specialist in semi-finished production. What remained of the kitchenware and milk pail production, as well as roll-bond for freezers and refrigerators, were outcompeted and production in Holmestrand closed down in 1996. Hydro focused on developing products based on customer needs and to provide technical support. Gradually, Hydro Aluminium Holmestrand was able to produce materials with properties that the market demanded.

An example of the market orientation was the development of a specially adapted material for heat exchangers for the automotive industry. Hydro's extrusion plants took a large part of this market, and production came to represent a stable income for the rolling mill in Holmestrand. However, new methods for rolling and surface treatment came to make building materials based on recycled aluminum the largest area of ​​focus.

Hydro becomes an integrated global company

The transition to a production based on remelted scrap in Holmestrand was made possible through a national research collaboration consisting of the Research Council, NTNU and Sintef. Hydro's change in strategy involved not only increased processing and recycling, but also integration and internationalization of the aluminum business. In the late 1990s, the group turned its attention to European aluminum companies suited for mergers or acquisitions. In 2002, Hydro succeeded in acquiring the former German state-owned Vereinigte Aluminium Werke. (VAW). The acquisition made Hydro one of the largest aluminum companies in the world. When Hydro acquired the Brazilian mining company Vale, the company became a fully integrated global aluminium company.

The investments abroad did not mean that Norwegian metalworks were not modernized. The group invested heavily in what is the world's most energy-efficient aluminum plant at Karmøy, showing that environmentally friendly aluminum production was a central part of the company's innovation and production strategy. The demand for recycled materials increased in the Hydro era. Building materials from Holmestrand were increasingly pressed mechanically on the construction site, and they were delivered to spectacular buildings all over the world, like the airports in Beijing and Gardermoen, and large sports arenas in Romania and for the World Cup in Brazil and the London Olympics.

After the acquisition of VAW it may seem strange that Hydro kept such a small rolling mill. The explanation may lie in the development of technology for remelting scrap, combined with the fact that the company controls a relatively long value chain within a small geographical area, which makes production more flexible than larger rolling mills. In 2021, however, Hydro's ownership in Holmestrand came to an end, as the company decided to sell its entire rolling mill division and focus on the production of primary metal and extrusions.