Our performance

mound of alumina oxide

Bauxite and alumina

2011 targets

  • Stabilize operations at Paragominas and continue to deliver production increases
  • Stabilize production at Alunorte at a level over 6 million mt on an annual basis

2011 results

  • Operations at Paragominas stabilized with record production of 9 million mt (annualized) in the second half of the year
  • Improved operational stability in Alunorte with production over 6 million mt (annualized) in the second half of the year

2012 targets

  • Further HSE improvements with a focus on high risk incidents
  • Continue to stabilize and improve production and operational performance at our sites

Ambitions going forward

We are strongly commited to safety and to eliminating high risk incidents in our operations. Going forward, we intend to capitalize on our long position in bauxite and alumina in a resource constrained world. We intend to secure and grow our capacity to enable the expansion of our metal business and to enhance our position in a profitable bauxite and alumina market. This will increase our attractiveness as a partner in new ventures and our ability to influence the further restructuring of the aluminium industry as a whole.

Primary Metal

2011 targets

  • Safe and efficient operations
  • Effective integration of Albras smelter
  • Cost reductions extended to USD 300 per mt, including USD 175 per mt by end 2011
  • Complete Qatalum ramp-up
  • Continue strong capital discipline

2011 results

  • Despite high attention, TRI targets not achieved, however good performance compared with industry standards
  • Albras integrated into Primary metal smelter portfolio
  • Cost reductions of USD 200 per mt achieved, program on track
  • Qatalum ramp-up successfully completed
  • Strong focus on capital discipline resulting in reduced sustaining capital expenditure from NOK 1,371 million to NOK 1,050 million

2012 targets

  • Safe and efficient operations
  • Cost reductions targeted to USD 300 per mt, including USD 235 per mt by end 2012
  • Secure first quartile cost position for Qatalum
  • Continue strong capital discipline

Ambitions going forward

Hydro has an ambition to expand its upstream activities while maintaining a strong emphasis on sustainable cost development. We will continue to focus on lean smelter operations, operational excellence and safety. The ongoing development of next-generation technology, HAL4e, will provide a strong technological basis for continued organic growth, increased efficiency and lower emissions.

 

Metal Markets

2011 targets

  • Safe operations and improved profitability for all remelt operations
  • Margin improvements for all casthouse products, including primary smelter casthouses
  • Execution of Qatalum marketing plan for full production volumes
  • Further develop recycling business opportunities

2011 results

  • Increase in TRI incidents in total but with a significant reduction in Asian operations
  • Further improvement in remelt operations and flexible use of remelting during a softening market
  • Improved margins for remelter and primary casthouse products despite increasingly challenging market conditions
  • Increased market share in the U.S. and Asia through successful marketing of Qatalum production with high share of value added products
  • Continued strong operational performance in metal sourcing and trading
  • Matured portfolio of recycling projects further and continued technology development, although postponed decision related to recycling center at Karmøy

2012 targets

  • Safe operations with continuous TRI rate reduction
  • Pursue optimal market position regarding margin and volume developments
  • Achieve operational improvements in commercial activities and production operations from defined performance programs
  • Gain market share in new high purity aluminium products
  • Progress on execution of Hydro's recycling strategy

Ambitions going forward

Our vision is to be the preferred partner for casthouse products and services. Our ambition is to utilize the flexibility of our multi-sourcing system and manage our product portfolio globally in order to optimize margins and increase our global market share, including developing positions in emerging markets. We will continue a strong focus on safety, and maintain firm discipline on operating costs and capital expenditures.

Rolled Products

2011 targets

  • Further HSE improvement to secure safe operations
  • Margin development for non-contracted volumes above 2010 levels
  • Product optimization program implemented at focus plants
  • Increased cost efficiency compared to 2010 achievements
  • Operational performance improvements from ramp-up of Rolled Products Business System

2011 results

  • Despite high attention, TRI rate on same level as in 2010
  • Average margins above 2010 level
  • Product optimization program on track in all plants
  • Cost per ton higher than 2010, impacted by lower volumes and somewhat lower labor productivity
  • Further improvement in claim rate and delivery reliability

2012 targets

  • Further HSE improvement, with focus on high risk areas
  • Defend margin level
  • Maintain customer focus with further improvement in delivery reliability and quality
  • Finalization of the product optimization program
  • Operational performance improvements with focus on productivity and higher cost efficiency
  • Improve inventory turnover rate, strong focus on counterparty risk

Ambitions going forward

We are committed to safety and to eliminating serious accidents in our operations. We aim to increase the returns of our business, concentrating on margins, cost efficiency and operational excellence - supported by the Rolled Products Business System, involving all employees in continuous improvement. We will stay focused on innovation and technology to sharpen our competitive edge.

Extruded Products

2011 targets

  • Safe operations with a return to trend of continual reductions in TRI rate
  • Grow volumes and reinforce leading position in Europe
  • Execute further rationalization in European operations
  • Execute growth projects in emerging markets

2011 results

  • TRI reduction lower than target despite high attention
  • Increased overall volumes within a challenging market environment
  • Significant cost cutting measures implemented in southern Europe and Scandinavia
  • Preparation for ramp up of growth investments in China and Brazil in place

2012 targets

  • Safe operation with continued focus on TRI reduction
  • Successful implementation of cost improvement program
  • Improve overall cost effectiveness compared to 2011
  • Further development of differentiation strategy and strengthen basis for premium prices
  • Capture growth opportunities, especially in emerging markets

Ambitions going forward

Our goal is to remain the clear performance leader in Europe's extrusion-based industries, including building systems, reinforcing our leadership position through selective growth and further development of new high-performing solutions. We focus on innovation and technology to sharpen our competitive edge. We are committed to safety and to eliminating serious accidents in our operations. We will actively adjust capacity in markets with insufficient demand. We intend to further expand in emerging markets to grow our business and improve the profitability of our operations.

Energy

2011 targets

  • Operational excellence and safe operations
  • Realize committed development and upgrade projects within targets
  • Value enhancement through optimization using asset flexibility
  • Competitive framework conditions and energy sourcing for aluminium operations

2011 results

  • Positive development in operating performance and no recordable injuries
  • Progress as planned on development and upgrade projects
  • Strong power portfolio optimization results
  • Progress made on securing competitive framework conditions
  • Memorandum of understanding entered into for Alouette power sourcing

2012 targets

  • Continued operational excellence and strong focus on safe operations
  • Successful completion of two new power stations
  • Continue positive development in the commercial activities
  • Competitive energy sourcing for aluminium operations and development of strategic options in Brazil

Ambitions going forward

Our goal is to develop our equity power position and capitalize on our energy competence, supporting the sourcing of power to our operations on a global basis.

cans to recycle

Viability performance

2011 targets

  • No fatal accidents. Total recordable injuries per million hours (TRI rate) down by 28 percent to 2.7
  • Further lift our recycling volume to improve capacity utilization
  • Integrate our new colleagues from Vale Aluminium

2011 results

  • Three fatal accidents in consolidated activities. TRI rate increased by 2 percent to 3.8
  • The electrolysis process of aluminium production emitted 1.61 mt CO2e/mt aluminium, compared to 1.63 mt last year
  • Recycling of contaminated and post-consumer scrap increased by 3 percent
  • Integration process of new colleagues in Brazil well underway

2012 targets

  • No fatal accidents. TRI rate down 25 percent to 2.85
  • Stabilize at above 90 percent capacity utilization in recycling
  • Internal review of reforestation and wildlife program in the Paragominas mine
  • Establish CSR action plan for community investments in Pará, Brazil
  • Diversity awareness program launched

Ambitions going forward

  • No fatal accidents or other serious injuries and no new occupational illness cases
  • Aluminium production emits 1.52 mt CO2e/mt aluminium in 2013
  • Recycle 1 million metric tons of contaminated and postconsumer scrap in 2020
  • No net loss of biodiversity in our activities
  • We intend to be a preferred partner worldwide due to our responsible business operations

Updated: October 11, 2016