Hydro to Close Aluminium Plant in New York

Hydro will cease aluminum extrusion operations at its Ellenville facility in New York by the end of June 2007, affecting about 265 employees.

The closure is part of an ongoing restructuring of the company’s downstream aluminum activities. Hydro’s aluminum casthouse, which employs around 50 people on the Ellenville site, will continue operations.

The casthouse has recently been through substantial renovation and expansion, significantly improving plant productivity, safety and quality, making it one of the most advanced facilities of its type in North America. The casthouse will continue to serve its markets.

Today’s announcement is in line with a June 2006 decision by Hydro to sell the Ellenville extrusion operations, following a strategic review that concluded the facility was not core to Hydro’s future in North America. Despite an extensive sale process, new market initiatives and productivity improvements, Hydro has been unable to find a satisfactory buyer.

“We are disappointed that we haven’t found an adequate buyer to secure the future for Ellenville extrusion,” said Fernando Simões Henriques, head of Hydro’s North American extrusion operations.

“We must now focus our energy on exiting the Ellenville extrusion operations in a way that limits the impact on our employees, the community and our customers.”

Hydro will work closely with Ellenville customers to shift their businesses to other Hydro plants. It aims to offer employment opportunities at other North American operations to displaced Ellenville employees and will provide transition assistance to those employees not relocated.

In December 2005, Hydro disclosed a plan to strengthen the performance of its downstream aluminum operations. The company has since announced the sale or closure of a number of non-core units. In late 2006, Hydro announced its exit from the magnesium business, the sale of its automotive castings business and the planned divestiture of its automotive structures unit. In addition, an extrusion unit in the UK was closed.

Svein Richard Brandtzæg, head of Hydro’s downstream Aluminum Products unit said: “We have made some tough decisions over the past year, but the restructuring measures have been absolutely necessary. We have managed to improve many downstream operations, including extrusion, preparing our business for future growth.”

The Ellenville facility was established by Channelmaster in the 1950s to produce television antennae and subsequently purchased by Germany-based VAW in 1965. Hydro acquired the operations as part of its acquisition of VAW of America in 2002. The Ellenville facility has traditionally focused on drawn aluminum tubing, a market that has been severely hit by so-called offshoring – the movement of US manufacturing to Asia.

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