Norsk Hydro, the Norwegian oil and energy, light metals and plant nutrition group, has signed an agreement with Aluminium Holding UK Ltd to purchase their entire share holding in Deeside Aluminium Ltd, Wrexham. The purchasing price is approximately GBP 10 million, including existing liabilities.
The take over is subject to approval of the Office of Fair Trade in the UK.
Deeside Aluminium operates an extrusion ingot casting plant using aluminium scrap. This acquisition will support the growth strategy of Hydro Aluminium Metal Products. Deeside will play an important role in Hydro’s supply network for the UK market.
The plant will be a part of Hydro's network of casthouses and remelt plants, offering scrap conversion services to extrusion ingot customers in Europe. Following the addition of Deeside in the UK this network, with existing plants in France, Germany and Luxembourg, will have an annual casting capacity of approximately 220,000 tonnes. Hydro is also building a new remelt facility in Kentucky, USA, and at the end of this year Hydro will have approximately 175,000 tonnes of extrusion ingot casting capacity centrally located in the USA.
The Deeside plant has currently an output of approximately 38,000 tonnes per year. After takeover Hydro will embark on a significant investment programme to improve productivity and raise capacity to 43,000 tonnes per year. This programme will also pave the way for a possible future expansion up to 60,000 tonnes per annum.
Hydro Aluminium Metal Product is market leader for extrusion ingots in Europe, supplying 780,000 tonnes in 1999, and expects a steady market growth and increase in market share in the years ahead. Volumes supplied by scrap remelters will grow in relative importance to support the projected growth.
In the UK Norsk Hydro has more than 20 subsidiaries employing around 1500 people at sites throughout the country. Its UK aluminium operations start with the import of billet, alloy and wire rod and cover all the downstream processes from manufacturing extrusions to fabricating and designing new applications.