Norwegian Companies in USA -- Norsk Hydro USA Inc.

News of Norway, issue 3, 1996

Or that the same firm manufactures aluminum frames for Chevrolet Corvettes? You may also know that the invention upon which the company was founded, the plasma arc, is considered today by U.S. scientists to be a key to the disposal of toxic nuclear waste.

The company involved in such diverse doings is Norsk Hydro, which last fall celebrated its 90th birthday in Norway. Equally notable, over the past 50 years this highly diversified firm built a solid presence in North America.

On Route 18 in Mississippi, a sign reads "Welcome to Puckett - 300 good folks and a few old soreheads." The mood may be better now since Hydro Aluminum, the town's biggest employer, has begun earning profits and created safe jobs for 380 employees. If there is one place that will benefit from global warming it must be here. Specialized in aluminum parts for automobile aircondition systems, the company has grown since its inception in 1989 as a joint venture with a Canadian owner. Hydro Aluminum took over in 1990, and prospects are very good as new applications of its technology are multiplying.

Hydro Aluminum Puckett is one of three Hydro companies manufacturing heat transfer products in the United States. The Hydro Aluminum plant in Adrian, Michigan, has 320 employees, while the third plant in Rockledge, Florida, employs 215 people.

The Florida facility, the best performer, grew from worst to first in less than three years. Efforts were rewarded when the plant won the Norsk Hydro CEO Safety Award last December. Standards had slipped previously, but now the plant stands out as one of the cleanest and tidiest of Hydro's factories. Not surprisingly, employee satisfaction and productivity have developed equally well.

Hydro Aluminum Automotive Structures in Holland, Michigan, employs 160 people to make structural car parts such as subframes, seats and bumpers. Not even in the automotive market 10 years ago, this manufacturing segment now accounts for 20 percent of the turnover of the Hydro Aluminum extrusion group. The contract to supply rear space frames for Corvette sports cars was a breakthrough not only for Hydro but for the extended use of aluminum in cars as well.

Hydro Agri North America (HANA), with head office in Tampa, Florida, is responsible for Hydro's fertilizer activities in North America. It serves the U.S. agricultural community as a major provider of fertilizer products with about 50 terminals all over the country. Also, it handles Hydro's extensive ammonia marketing, trading and shipping business throughout the western hemisphere.

Phosphate fertilizers produced in Florida, in a joint venture with the U.S. company Farmland Industries, are exported through Hydro's global marketing and distribution system. HANA also has a regional office near San Francisco and owns 50 percent of Hydro Kirby, a fertilizer distributor in Pennsylvania. The total number of employees in HANA is 160 with an additional 300 working in the Farmland-Hydro joint venture.The North American fertilizer market is large, mature and competitive, says Bjørn Bach, president of HANA. To make a profit we need to be the cheapest producer, have the best people and provide the best logistics, he believes. Easy access from overseas production plants makes coastal areas the main targets for marketing, but profits also accrue from products made for niche markets. One such area is fertilizer to make grass green without growing much. In Florida alone, 1,200 golf courses use 50,000 tons of fertilizer, an important and exciting market for HANA.

The acquisition of a long-time partner, Nutrite of Canada, further improves Hydro's position in North America. Nutrite, a producer and distributor of fertilizers, has numerous blending plants as well as production, import and warehouse facilities throughout eastern Canada and the northeastern United States. Annual revenues exceed $100 million and the company employs 300 people.

Agriculture has become a high-tech industry and buyers are becoming more professional every day. Hydro believes the future is in "prescription fertilizers." With Nutrite, Hydro expects to be in the forefront when it comes to environmental care and prescription.

Nutrite Inc, is Hydro's second industrial commitment in Canada. Hydro also owns a major plant for the production of magnesium in Bécancour, Quebec. With another magnesium plant in Norway, Hydro tops the list of magnesium producers worldwide. As a large user of magnesium, the automotive industry, particularly in the United States, is the prime focus of Hydro's marketing efforts.

In 1995, Norsk Hydro had total sales in the United States of $1.5 billion. The total number of North American employees in companies owned or controlled by Hydro was 2,300. Altogether Hydro has main production and marketing companies at 13 locations in the U.S.

Norsk Hydro USA, based in New York, is the holding company for the group's American activities and also serves as the company's contact to the U.S. financial markets.

The Parent Company:

Norsk Hydro a.s.

By a stroke of fortune, three remarkable men with complementary talents-scientist Kristian Birkeland, engineer Sam Eyde and financier Marcus Wallenberg-met in 1905 to explore commercial applications of Norway's abundant hydroelectric potential and to apply the scientific discoveries of Professor Birkeland. They intended to manufacture fertilizer based on Birkeland's invention to fix nitrogen from the air by means of an electromagnetic arc. This turned out to be the genesis of what would become Norway's largest industrial concern.

Ranked 380 among the Fortune 500, the corporation last year was a $12.6 billion business. With $1.7 billion in operating income, the corporation posted a respectable 16 percent return on capital. Major activities today are concentrated within the segments agriculture, oil and gas, light metals and petrochemicals. Energy, both as hydroelectric power and petroleum, has been the foundation for Hydro's growth and represents an important common link between the business areas.

Norsk Hydro is Europe's leading fertilizer manufacturer with production facilities in many European countries and joint ventures throughout the world. Its fertilizers are sold in more than 100 countries. The agriculture production contributed approximately 25 percent of the corporate profits.

The production of light metals is based on access to hydroelectric power. Five aluminum smelters in Europe and magnesium plants in Canada and Norway make Hydro one of the leading European aluminum producers and the world's largest in magnesium. Hydro takes aluminum beyond the stage of a raw material and operates several production plants in Europe and North America for semi-fabricated aluminum products. At the end of 1995, Norsk Hydro could look back at its best year ever in aluminum, which contributed almost $600 million or one-third of the operating income.

Hydro has been involved in oil and gas activities in Norway since North Sea exploration began in the 1960's and the company is presently the second largest producer in Norway. Hydro has managed several multi-billion dollar development projects in the North Sea; the latest was the installation of the Troll Oil platform last fall. This alone produces more than Norway's consumption of oil products.

Hydro refines and markets oil products in Scandinavia. In the petrochemical area, Hydro produces PVC in Scandinavia, the United Kingdom and Asia, mainly aimed at the Northern European market. Ethylene and VCM (vinyl chloride monomer) are produced in Scandinavia and marketed in Europe and Asia.

President and CEO Egil Myklebust can look back at 1995 as a good year for Norsk Hydro. With a little help from his friends, the 32,000 employees and a good market, the Hydro Plus program goal of $1.6 billion (NOK 10 billion) in operating income was achieved one year ahead of schedule.

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