A changing Hydro

inside >>>
HYDRO INSIDE The global magazine for
Hydro employees – no. 2 – 2007
A changing Hydro
Kurri Kurri
gears up
for safety
> 4-5
Ormen Lange
praised in press
> 6-9
A window on
the Beijing
Olympics
> 10-13
Rally for
charity
> 29-31

there!
Hydro has undergone major changes
over the past five years. But the company’s
viable industrial traditions stretching back
101 years, its strong market positions, as
well as its talented and loyal workforce, will
live on from the autumn of 2007 in three
leading global companies: the fertilizer
company Yara, the aluminium and power
company Hydro, and in the global oil
industry’s biggest offshore operator.
The spin-off and merger of Hydro’s
oil and gas business with Statoil is an
extensive project, and many in both Hydro
and Statoil are facing new opportunities
and challenges.
Other parts of Hydro’s operations are
also about to undergo big changes. It is
in such situations that the quality of the
employees and the organization is put to
the test and is seen to prevail.
I have been asked questions and
listened to comments indicating that the
vast majority are enthusiastic and filled with
expectation regarding the changes facing
them. My impression is that this applies
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By means of bold moves and hard work
we have added great value ensuring that
more than 40,000 well qualified employees
have jobs that are even more secure
hi! > writer
and exciting.
photos > photographer
contents
4-5
Safety in center. Keeping track of safety gear
systematically saves money and improves safety
performance.
6-9
Ormen Lange a star. We know the Ormen Lange gas
project is a big deal. The rest of the world is taking notice,
too.
10-13
Foot in the door in China. Isn’t exporting fabricated
aluminium products to China like selling sand in the Sahara?
14-15
Seeing is believing. Virtual reality isn’t just for exploring
undersea reservoirs – it can also improve safety offshore.
16-25
A changing Hydro. The proposed merger of Hydro’s
oil and gas activities with the Norwegian company Statoil
is certainly a big deal. But there are some other notso-small
deals happening, too, that are changing Hydro.
26-27
When small is beautiful. Little things can mean a lot,
both for the environment and the bottom line.
29-31
Ride of a lifetime. It takes determination. Paul Farrugia
spent 16 days riding a motorbike across South Africa to
help that country’s fight against poverty and disease.
32-33
Art and engineering – two sides of the same coin.
For Joe Brown, his computer-driven engineering work and
his whimsical paintings complement each other – both
require foresight and determination to see them through.
34-35
Postcard from Newton Aycliffe
hi&lo 28 hi5 36

hi!> team
Editor-in-chief > Cecile Ditlev-Simonsen
Managing Editor > Craig Johnson (craig.johnson@hydro.com)
Editorial board > Halvor Molland (Aluminium Metal),
6 10 14
26
29
next issue
May 2007
Ideas? Contact:
Craig Johnson
Hydro (F472B)
NO-0240 Oslo,
Norway
craig.johnson@
hydro.com
contents hi! 3
Ole Johan Sagafos (Aluminium Products), Bjørn Otto Sverdrup
(Oil & Energy), Ragnvald Bertheussen (Other Businesses).
Design and production > item ltd and Media Center (3700017)
Photo: Scanpix
The businesses
leaving Hydro will
go on to create
value in their new
homes.

Keeping track
of safety gear
systematically
saves money and
improves safety
performance
Safety
in the
center

Team co-ordinator Michael Wilson and his colleagues at
Kurri Kurri are benefiting from improved safety performance
and the Safety Maintenance Center.
T
he aluminium smelter in Kurri
Kurri, Australia, distributed close
to 13,000 pieces of safety equip-
ment to employees last year – a lot to
keep track of. That’s the job of the Safety
Maintenance Center.
“When we issue a piece of safety equip-
ment, we know it is according to Australian
and site safety standards. It has not been
lying around in the back of a car the last six
months, with paint all over it,” says site safety
officer Jim York.
Together with assistant safety officers
Gregory Cook and Simon Lane he inspected
and issued close to 13,000 pieces of safety
gear in 2006. This includes 3,764 Racal hel-
mets, 1,791 harnesses and 1,789 lanyards.
The process and results of the system are
impressive, making the Safety Maintenance
Center a significant contributor to a record low
total recordable injury statistic of 2.1 in 2006.
In addition, Hydro saves big money through
loss prevention.
It wasn’t always that way. Ten years ago,
each worker had individual safety gear, and
50 Racal helmets, each priced at around
$800, were lost every year. Other equipment
was misplaced and lost, and – very import-
ant – safety equipment was not inspected
regularly.
Last year, though, only one of the Racal
helmets was not returned. The Safety Main-
tenance Center then could identify who had
been issued the helmet, and the department
in question had to replace it.
Since all equipment is tagged and all activi-
ties logged on a computer, the use of safety
equipment can be optimized in cooperation
with the manufacturer. One example is Racal
helmet filters. The center now knows exactly
how many times each of the 110 helmets has
been used. York estimates the annual savings
on filters alone to be around $30,000.
“The people working at the Safety Maint-
enance Center are all certified to inspect the
safety equipment we issue. All equipment is
clearly tagged and identified, has its designat-
ed storage area, and we know exactly when
it expires or requires servicing. We dismantle,
clean, and inspect everything before it is re-
issued,” says York.
Based on this success, all contractors
working at the smelter are also offered the
use of safety equipment from the center.
hi! > Halvor Molland
photos > Halvor Molland
Safety officer Jim York (right) and assistant Gregory Cook inspect a Racal helmet at the Safety Maintenance Center in Kurri Kurri, Australia.
safety first hi! 5
– 25%
Goal!
Hydro made its goal of a
20 percent drop in the total
number of injuries in 2006
– by a good margin.
The number of total recordable
injuries (TRI) has been
falling steadily over time,
although the ambitious target
of a 20 percent reduction in
injuries set by President and
CEO Eivind Reiten has not
been reached every year.
Last year, though, the trend
was very positive – a reduction
of around 25 percent, for
a TRI rate of 4.0. The reduction
in the TRI rate for 2005
was 10 percent.
“Certain business areas
have achieved great improvements,”
says Jack Simensen,
head of safety in the corporate
Health, Safety and Environment
department. “Several
units have achieved an improvement
of more than 50
percent, but we still have a
list of units that are lagging
behind, and unfortunately
certain units also have reported
a setback. This of course
gives grounds for follow-up.”
Despite the overall improvement,
Hydro experienced one
workplace fatality in 2006.
Jens Hinrichs, a project engineer
at the aluminium extrusion
plant in Birtley, England,
died in an accident in early
November.
“Every fatal accident is one
too many,” Simensen says,
adding that the number of
fatal accidents has also fallen
over time.
The fatal accident at Birtley
has been investigated, and a
report has been distributed
on the Hydro intranet so that
others can learn from the
experience.

We know the Ormen Lange gas project is a big deal. T

The rest of the world is taking notice, too
hi! 7
>>>

Ormen Lange
a star
H
ydro’s Ormen Lange project
is attracting a good deal of
attention far beyond the small
community of Aukra on the northwest
coast of Norway, where the gas will be
brought ashore for processing.
So far, Ormen has been seen by millions
of television viewers worldwide on Discovery
Channel, as well as Russian and German
programs. The Langeled pipeline part of the
project, which connects the landfall site and
a terminal in England, has been covered by
the BBC and several UK newspapers.
Here are some of the most prestigious:
• The Ormen Lange project reappeared on
TV when National Geographic Channel
featured it in the “Megastructures” series.
• Ormen Lange went to Hollywood when
Hydro’s film “The Traveller,” featuring Lonely
Planet host Ian Wright, won top honors at
the US International Film and Video Festival.
• Popular Science magazine featured the
Ormen Lange/Langeled project in a “Best
of What’s New in 2006” feature.
• The jewel in the crown as far as the energy
industry is concerned was when the project
captured the esteemed Platt’s Global
Energy Project of the Year prize in New
York City in late 2006.
“Ormen was unanimously voted into first place
by all 10 of the Platt’s Global Energy Award’s
judges – the first time ever in the history of the
awards,” says Lars H. Bjelvin, head of Ormen
Lange communication.
“The project is a fantastic vehicle for getting
across strategic messages supporting Hydro’s
business goals. Its features and strengths are
very much the same as those Hydro has devel-

oped as an industrial frontrunner during the
past 100 years.”
One of the most important facets Hydro
wants to show about Ormen Lange is close
and constructive cooperation with project
partners, suppliers and the public, including
academia and science institutions.
“Managing a project like this cultivates two
other strengths that both Ormen Lange and
Hydro are increasingly known for – being a
technological visionary that progressively
develops new, groundbreaking technologies,
and being a performance champion that
consistently delivers large-scale projects with-
in agreed time and cost frames,” Bjelvin says.
“Hydro trademarks like technology, project
performance and cooperation are the ones
we need to tailor and communicate to stake-
holders and decision makers, bilaterally and
publicly, wherever we have growth ambitions.”
Hydro recently completed just such a com-
munications campaign in Russia. “Today Hydro
is widely recognized by both Russian business
and political leaders as a leading company
within subsea technology and especially as a
company that’s always on time and budget,”
says Bjelvin.
This is the fi rst time in my life that we’re getting so
much focus on a project. It makes you proud when
National Geographic and Discovery Channel want
to cover Ormen Lange, even before we’re done.
This really brings Ormen Lange to the people, and
it’s very stimulating for the whole project team.
Tom Røtjer, senior vice president, Projects
Conveying this image is strategically imperat-
ive in a country like Russia, with its abundant
petroleum resources yet difficult framework
conditions, which are coupled with intensify-
ing competition between international com-
panies that have upstream petroleum growth
ambitions.
“Going into Hydro’s last year as an opera-
tor on Ormen Lange, the project’s trademark
strengths will be steadily marketed towards
other key decision makers in different parts
of the world – the Americas, Europe, the
Middle East and Africa, to mention some,”
says Bjelvin.
“We always tailor our message to the local
business realities in the places where we have
growth ambitions. We do it both bilaterally and
publicly through a complete mix of channels
in order to get the message across – Ormen
Lange and Hydro is all about three features:
technology, performance and cooperation.”
hi! > David Burke
photos > Øivind Leren, Tor Hammerstad,
Helge Hansen, Dag Thorstensen
hi! 9

Foot
in the door
in China
Isn’t exporting fabricated
aluminium products to
China like selling sand
in the Sahara?

hi! 11

If you fi nd it difficult to change your long-held perceptions you
should stay away from China. Things are developing here so
quickly that even the most dynamic among us are struggling to
keep up.
Gérard Lugrin
Windows from Hydro are destined to adorn the Morgan Center in Beijing.
C
hina represents a vast growing
market – 1.3 billion people in
the fastest growing economy
in the world. Demand for aluminium is
increasing, but so are the abilities of
Chinese producers, who are working
hard to catch up to Western standards.
Still, Hydro is selling its advanced alumin-
ium building systems products – including
for high-profile constructions connected to
the 2008 Olympic Games in Beijing – for
this booming construction market.
Says Gérard Lugrin, who is developing Hydro
Building Systems in China: “Why shouldn’t
we sell our advanced building systems in
the world’s fastest growing market?”
Lugrin operates out of a big new ware-
house and office building outside Beijing,
from which Hydro is currently making its
first major delivery here.
Wicona brand window systems from
Hydro will form a highly visible part of the
setting for the Beijing Olympic Games, the
Morgan Center.
In the last year, he has built up a staff of tal-
ented Chinese employees, including several
who have solid construction industry experi-
ence. In the autumn of 2006 they moved into
their new warehouse, signed their first major
contracts and established important links with
the Chinese building industry, property devel-
opers, metal building specialists and architects.
They have also drawn up their plans for the
coming years when the Wicona and Technal
brands will be developed to take their natural
position in this enormous market.

The size of the Chinese market for alumin-
ium building products is not that easy to
gauge. Lugrin estimates a volume of roughly
1 million tonnes per year for the type of pro-
ducts that Hydro supplies. Hydro Building
Systems’ niche in this market is probably
around 100,000 tonnes.
But they are not alone. Both European
and Chinese suppliers are chasing shares
in the market for top-quality products. More-
over, the Chinese authorities are about to
introduce stringent new requirements con-
cerning the energy efficiency of buildings.
“The new specifications outlined are
intended to improve the energy efficiency of
new buildings by 65 per cent,” he explains.
“They will be more stringent than the most
rigorous specifications in Europe.
“This represents a great opportunity for us,
but it also means that Chinese producers will
soon catch up in this field. Several of them
already deliver very advanced building systems.
If we intend to keep ahead in terms of quality
and technically advanced solutions, we need
to intensify our product development efforts.
Our most demanding clients in China do not
set lower standards than our European ones.”
Lugrin and his team are off to a flying start,
but they know that a large and growing market
Personal profile
Gérard Lugrin – ‘pioneer’
Gérard Lugrin has been Hydro Building Systems’ representative in Beijing for one year,
but he is no industry newcomer. The 59-year-old French architect has spent his entire
career in the aluminium industry, most of it with Technal, which became part of Hydro
in 2002. He has lived all over the world – in Morocco, Thailand, Europe and the Middle
East. and traveled for 15 years in Africa, Middle East and South America. Lugrin came
to Beijing from Bahrain. He describes himself as a typical pioneer. That’s what he likes
doing best – setting up, building, getting the wheels to turn. Afterwards he prefers to
withdraw and hand over to the locals. This is clearly the right thing to do in China.
is not in itself a guarantee of success. You also
need a real ability and willingness to under-
stand where you naturally fit in Chinese culture.
Gérard Lugrin is enthusiastic – and there can
be no doubt that his people are too. He says
that he faces the tasks confronting him with
due humility. Moreover, he is greatly impressed
by the tempo and determination in today’s
developing China.
“Just look around! There’s hardly a block in
this huge city that isn’t dominated by several
big cranes. New skyscrapers are going up all
over the place. There are market opportunities
as far as the eye can see,” he says. “This is
tremendous. I’ve never experienced anything
like it.”
hi! > Ole Johan Sagafos
photos > Ole Walter Jacobsen
Preparations are under way
for the 2008 Olympics in Beijing.
hi! 13

Virtual reality isn’t just for exploring undersea
reservoirs – it can also improve safety offshore
Seeing

is believing
F
or the fi rst time, computer
codes designed to analyze gas
hazards are being combined
with virtual reality (VR) to deliver safety
training.
The program has been created by the
Oil & Energy Research Center in Porsgrunn,
Norway, to help offshore and onshore per-
sonnel to understand and reduce offshore
risk, and to improve safety.
Hydro platform managers gathered in the
Oseberg VR room at the Sandsli offices near
Bergen to take part in an interactive demon-
stration of the new training tool. The program
combines realistic three-dimensional com-
puter-assisted design models with in-house
design and gas hazard analysis tools. It is
fully interactive, so you can simulate new
incidents online, simply by defining a new
leak and placing it wherever you like.
“The main goal is to increase awareness
of barrier philosophy, risk levels and to com-
municate emergency preparedness mea-
sures,” says project leader Olav Sæter.
There’s nothing virtual about the need to im-
prove awareness. Last year, Hydro accounted
for nearly half of all reported gas leak incidents
in the Norwegian offshore sector.
“It’s not so easy to communicate risk levels,
but using this tool we can see and experience
virtual situations,” says Gry Offernes, head of
safety, security & emergency preparedness in
Operations.
For example, she cites offshore workers
who build makeshift wind shelters on plat-
forms without consulting technical safety
representatives: “This program visually dem-
onstrates the consequences!”
Here’s how it works.
“Now we’re in a very dangerous situation,”
explains Sæter, simulating a potentially cata-
strophic gas leak in the compressor module
on Grane, the model platform used in the
Hydro-designed VR program. Sound effects
of gas leaks and explosions have been in-
corporated to make the situation as realistic
as possible. All simulated data is generated
by advanced codes for gas hazard analysis,
including sites where leaks are likely to occur
and wind conditions.
Training scenarios are designed around five
steps of development in a gas leak situation
– source, gas dispersion, ignition, explosion
fire and major accident. Wind also appears
in the form of color-coded lines and arrows
depicting directions and speeds.
The VR risk and safety program can be
used anywhere – from the CAVE virtual reality
viewing room to laptop computer – thanks
to a software application that can run on
different hardware platforms. All you need is
3D goggles. Even a laptop conveys the same
sense of 3D depth as CAVE.
hi! > David Burke
photo > Vidar Hardeland
It’s not so easy to communicate risk levels, but using this tool
we can see and experience virtual situations.
Gry Offernes
Olav Sæter demonstrates the VR safety
program for platform managers and other
future users.
hi! 15

A changing
inside >>>
Hydro
Eivind Reiten
Photo: Helge Hansen

The proposed merger of Hydro’s oil and gas activities
with the Norwegian company Statoil is certainly a big deal.
But there are some other not-so-small deals happening
that are changing Hydro.
Hydro Polymers, which has about 1,200 employees, is
to be sold or launched on a stock exchange, much as
the former Agri business – now Yara – experienced three
years ago. Hydro Production Partner and Production
Services (more than 1,000 employees in total) are also
being prepared for sale.
See what your colleagues – and some former colleagues
– have to say.
>>>
Hydro Polymers’
‘can-do’ attitude
> 18-21
Yara blazes its
own trail
> 22-24
A changing Innovation Hydro hi! 17
Bittersweet exit,
but jobs remain
> 24-25

‘Hydro is changing, and
we’re changing’
The employees at Hydro Polymers in Aycliffe,
England, know how to tackle change
T
he chairman of Bakelite Ltd.,
the fi rst company to run the
industrial site at Newton Aycliffe
after World War II, commented in 1951:
“Workers in the North East are the finest type
they could possibly be, adaptable, hard work-
ing and capable of picking up new processes
very quickly.”
That’s certainly still true today. In the inter-
vening years, other companies have done
business here, with Hydro Polymers the latest,
starting when Hydro acquired the site in 1982.
Much of the workforce is drawn from the
local area, and more than a few employees
can point to family members also employed
here. More than a few have worked for more
than one owner.
So what do they think about plans to
divest Hydro Polymers, either through a sale
to another company or by creating a new,
independent company through a stock listing?
hi! > Craig Johnson
photos > Terje S. Knudsen

We have nothing to be afraid of
from a new owner. We have a strong
operation and good, capable people.
Bill Wood
Bill Wood
Site director
30 years
A changing Innovation Hydro hi! 19
‘A strong operation’
Communication is important, otherwise
you’re left in a black hole. Now that it’s
out in the open it’s so much easier. We
can explain the positives of standing on
our own two feet.
We believe Hydro will treat us in a fair
manner. This site has a lot to be grateful
for when you look at what has been
developed here.
I’ve worked for two owners: British
Industrial Plastics, and then Hydro. We
recognize Hydro is changing, and we’re
changing. We have nothing to be afraid
of from a new owner. We have a strong
operation and good, capable people.
>>>

Carl Fawcett
Process operator
– Compounds
10 years
‘Lot of uncertainty’
My father has been here nearly
30 years. I started in October
1996 on the mixing floor in
Compounds, when I was start-
ing a family of my own.
It’s one of the best-paying
places around. I believe it’s
a firm that wants to help you
along.
There’s a lot of uncertainty,
especially among the younger
lads. There are lots of plants
around England that are closing
down.
I don’t see the divestment as
a bad thing. Whatever direction
we take, we can focus a bit
more. The profitability is there.
I’ve got three kids – 2½, 6
and 11 – and live just down the
road. And while I might wish
something else for them, I’d like
to think that something will still
be here when they get older.
Brent Morfoot
Process operator – Compounds
2 years
‘New era coming’
I worked for 19 years at Great Lakes Chemicals here in
Aycliffe, then due to closure I applied here at Hydro, and
I’ve never looked back. I always looked at Hydro as the one
that did things right. When I was at Great Lakes, we’d ask
ourselves, What would Hydro do? Why don’t we do that?
I’m born and bred here. Wife Jill, and two kids, Stacey,
16, and Carl, 13.
If this divestment had happened two years ago – when
times were tough and we were low on orders – I might have
been worried. But we’ve had a big upturn, we’re working
chockablock. I’d be more worried if I was working anywhere
else than Hydro.
There’s a willingness to change by the employees. We
never stand still here.
We’ve come through a hard time, but we’ve got a bright
future. This is the pinnacle, it’s where everyone wants to
work.
There’s a new era coming, and if we carry on pulling in
the right direction, I can see any transition causing minimal
disruption. With our willingness for change and the strong
teamwork ethic we have, there’s no reason why we cannot
look forward with belief of exciting times ahead. Keeping
our high standards and positive thinking are the keys to
success.
Lee Edgar
Craftsman and
Amicus union shop steward
15 years
‘Positive about the future’
I started 15 years ago, as an apprentice
mechanical engineer. I’m now shift engi-
neer in Compounds, doing preventive
maintenance and breakdown mainte-
nance.
I’ve been a shop steward since last
July. If anyone has a problem, they can
come to me.
People are a bit disappointed. They
understand Hydro, and Hydro has been
good for Aycliffe.
They’re not scared of change – We’ve
been through a lot. It’s something we’re
good at. Change is going to come. You
can’t fight it, you have to live with it.
I’m married, with two kids – boys 3
years and 8 months. You’ve got to feel
a little bit worried, but I’m quite positive
about the future.
People try their hardest here.
more on Aycliffe > page 34-35

Geoff Richardson
Training technologist
35 years
‘Loyalty both ways’
My father started at this site in 1952 and left in 1985 as BXL’s
personnel manager. I started in 1972 when my father got me a
position on the Resin Plant after I had served time in the Royal
Artillery and other local employment. My son Michael works
here, too, in the warehouse.
It was really manual, very hard work. I started on the bottom
rung of the ladder, cleaning. I worked through the department
to become shift manager, followed by Maintenance Shutdown
Coordinator, now my current position is Training Technologist.
You get some experience with people after 35 years. I’ve
mellowed – there was no one more pigheaded than I was. You
could say I’ve got a degree in life.
It’s a shame that it’s the route Hydro thinks we have to go.
I like Hydro. But this is just another challenge. Yara has done
well – we’ll do well.
This is a fantastic site. A lot has happened over the last
25 years. When the site was owned by BXL there were 1,500
people here, now we have just under 400. I’d like to say it’ll
be here 50 years from now.
Loyalty has worked both ways. A lot of people here enjoy
coming to work, and Hydro has been good for the site.
I could take my pension, but I don’t have any desire to retire.
I moved up from the bottom, and I still have energy and moti-
vation.
Carolle Land
Personnel officer
11 years
‘Rise to the challenge’
A changing Innovation Hydro hi! 21
I’ll have been here 12 years in May. I started in a secretarial role, and after
a couple of years moved into HR; my current position is Personnel Officer.
I love interacting with people, we have an open-door policy where
people can come in and talk confidentially. HR is there to help support
and advise the workforce. These are exciting times.
I was here during a possible takeover a number of years ago. They
were our main competitor and a lot of people didn’t want to go with them.
We all breathed a sigh of relief when it didn’t go through.
From a workforce point of view, we’ve had some tough years, not
defined as a core business and being for sale. But we continue to do
our best irrespective of what is going on. The workforce always adjusts.
Every month is a challenge, and we rise to that challenge. Whatever
we’re asked to do, we do more. It’s in the fabric of what we do here,
continually looking to improve.
With this divestment, we all know it’s definitely going to happen, people
will carry on regardless. We’re really quite proud of our workforce and
their achievements. Whatever happens, our workforce has a lot to give.
People want to come and work for us. There is a lot of opportunity for
people here to move within the organization.
There are mixed emotions. Of the just under 400 employees, about
120 have more than 25 years’ service. These employees have seen a lot
of changes.
It’s to be expected that these are worrying times for some people.
People will have worries for themselves and for the site, it’s their bread
and butter. We are not frightened of hard work and I know we will rise to
the challenge.

Three years ago,
Hydro’s Agri business
was launched as
an independent
company called Yara.
How is it doing today?
Yara:
independent,
focused
and growing
Some strengths – like our size and
reach – are inherited. Others – like
our business model, productivity
focus and organizational structure –
are developing as we move forward.
Thorleif Enger

U
ntil 2003, Hydro’s Agri operations
formed the historical backbone
of the company. It was where
the company got its start just over a
century ago, making fertilizer. Then it was
“demerged” from Hydro and listed on the Oslo
Stock Exchange. Today, Yara is the world’s un-
disputed leader in the field of plant nutrition.
The company’s ambitions grew after its
launch: Yara aims to be the “industry shaper”
with a 10 percent market share by 2010.
Fast facts
• Yara is the global leader in plant
nutrients, with sales to more than
120 countries
• Core business is production and
marketing of nitrogen-based
fertilizers and ammonia, the key
raw material for nitrogen fertilizers
• Employees: 6,800
• Share price at launch, NOK 41;
early 2007, around NOK 165
“Being spun off opened up a lot of new
opportunities for us. We have been care-
ful to take advantage of them and actively
communicate what we stand for and where
we are going,” says Yara’s chief personnel
officer, Anne Grethe Dalane.
“As an independent company, our area
of operation became more clear-cut. It was
easier to develop a coherent strategy and
set specific goals. We were able to create
our own identity; our corporate culture is
probably even more results-oriented today
than it was previously.”
Culture and brand building are two of the
six planks in Yara’s program to realize its am-
bition to be the “industry shaper.” The others
are profitable growth, efficient operations, a
better cost structure and innovation.
Despite all the changes the company has
gone through, Dalane believes that most
employees have not experienced any major
upheaval.
“Identity and a sense of belonging have a
very strong local dimension: 98 percent of
our employees work outside the company’s
head offices in Oslo, and 85 percent work
outside Norway. We still have a decentralized
organization, and the further away from Oslo
you get, the less people will have noticed the
change.
“It is important that we all see the real po-
tential of Yara and the business we operate.
A changing Innovation Hydro hi! 23
“Being spun off from Hydro opened up a lot of
new opportunities for Yara,” says chief personnel
officer Anne Grethe Dalane.
That is something that CEO Thorleif Enger has
always been crystal clear about – that we have
a strong desire for growth.
“Although a lot of necessary restructuring
was carried out before we were spun off, we
have continued to increase the efficiency of
our operations. This has also led to a cut in the
workforce – from around 8,000 then to fewer
than 7,000 now.
“If we go back four years, Agri (today’s Yara)
was part of a 40,000-strong Hydro workforce.
The fact that we are now a separate, smaller
– and leaner – organization has probably
played a part in how we feel about our jobs
and our role. It may actually be easier for each
individual employee to see the value of what
we do, and lines of decision have definitely
got shorter.”
Dalane adds a little wryly: “I don’t think any-
one in today’s Yara wants to be part of all the
changes that are currently going on at Hydro.
It is easier to be yourself.”
hi! > Trond Aasland
photos > PhotoDisc, Trond Aasland
>>>

Trust and a culture of cooperation
were things we were good at in the
Hydro days, and which we are trying
to keep at Yara.
Arthur Frank Bakke
Hydro’s culture lives on
“I would say that most Yara em-
ployees are happy about the spin-
off from Hydro. Our employment
conditions have been well taken
care of, and developments in the
market have definitely been on
our side in the past few years,”
says senior union representative
Arthur Frank Bakke.
Bakke is chairman of Herøya Arbei-
derforening (the local union) and leader
of the company’s European Works
Council. He says that it was extremely
important to the employees that their
salary, insurance and pension rights,
as well as other benefits, did not suffer
as a result of the change. “These con-
ditions have been – to put it simply –
well taken care of, and have not been
the cause of any friction,” he points out.
Bakke explains that Hydro Agri under-
went an extensive turnaround before it
was spun off from Hydro in 2003. “This
was important for what we subsequent-
ly managed to achieve in the market.”
What kind of culture does Yara have
today? Are elements from the Hydro
days still embedded there?
“We have probably brought with
us some of Hydro’s corporate culture.
The company still has its head offices
in Norway and the Norwegian state
remains a major shareholder. Never-
theless, the composition of the work-
force means that Yara is gradually be-
coming a more international company.”
Bakke also points out that trust and
a culture of cooperation are advantages
that all sides are trying to keep alive.
“We were good at that in the Hydro
days, and we are trying to keep it going
in Yara. Neither trust nor cooperation
happen by themselves. They have to
be created and to some degree depend
on the individuals concerned. It is when
union representatives feel that they are
treated as equals that it is possible to
make cooperation work.”
T
he Grenland area of southern
Norway centered around Pors-
grunn is still a center of heavy
industry, but the Hydro logo no longer
dominates the landscape as it once did.
Yara has been spun off from Hydro, mag-
nesium production has ceased, Hydro Poly-
mers will become an independent company
or will be sold off. Units like Hydro Production
Partner are on their way out of the Hydro fold.
With the changes that have occurred in
the last few years, and those soon to come,
Hydro will have a very small presence in this
historic area. That doesn’t mean everyone
is turning out the lights. Hydro has helped
ensure that life goes on here, say two men –
a senior manager and a union leader – who
also have a long history here.
“Hydro has taken the initiative to safeguard
the future of its own production facilities and
contribute to the establishment of new busi-
nesses,” says Søren Sem, former head of
Hydro’s operations in Porsgrunn.
At the same time, solar cell producer REC
ScanWafer has opened a major production
facility in the area, and almost 90 companies
of various shapes and sizes have established
operations in the Industrial Park. This has
accelerated since the exit from magnesium
production.
In fact, more than 3,000 people now work
at the Herøya industrial site, more than before
Hydro’s withdrawal.
“Hydro as an industrial locomotive is on its
way out of the Grenland area. We have arrived
at a historic watershed,” says Bakke, leader
of the local union Herøya Arbeiderforening.
“This is not something we are happy about,
but we believe that good, alternative solutions
can be found. We expect that Hydro will con-
tinue to shoulder its responsibilities and follow
up as it has done during previous restructuring
at Herøya.”
Says Sem: “I can’t help but feel sad, what
I call ‘nostalgic grief,’ about what is happen-
ing now, after 85 years. It is incredible that it
lasted so long.” Sem worked for Hydro for
40 years, starting as an apprentice in the
limestone quarries in 1956, and ending as
general manager at Herøya.
Are these developments right or wrong?

Hydro’s dominant position is coming to an end
in a historic ‘home,’ but industry lives on
“I don’t want to say anything about whether
it is right or wrong. It is an international trend.
We may find change difficult, but restructuring
has always been part of our existence,” says
Sem.
“If we had not made the changes that we
have done here at Herøya over the past 25
years, there would not have been much left
of us. The creation of Hydro Industrial and
Business Parks has been extremely impor-
tant, with the focus on innovation and shared
services. I hope Hydro will remain the parks’
landlord and operator,” says Bakke.
“We have probably placed too much reliance
on heavy industry and the security provided by
Hydro here. But now growth must take place
in other forms. The closure of the magnesium
Arthur Frank Bakke, leader of the local union,
Herøya Arbeiderforening, and former general
manager of Hydro’s Herøya facility, Søren Sem,
feel sad that Hydro is on its way out of the
Grenland area, but believe that the restructuring
process will create secure new jobs.
plant showed that people are concerned about
the fate of the industry – 10,000 people turned
out to protest.”
Sem adds: “That union representatives
and management have worked together has
been crucial to our success in attracting new
businesses here. The unions deserve credit for
thinking strategically, not just concentrating on
pay and benefit issues.”
“Our members understand that you have
to be competitive if you are going to attract
investment,” says Bakke.
Both men agree that focus would have
been difficult to achieve if Hydro were to con-
tinue operating all the activities at Herøya.
“These and all the other industrial compa-
nies in the Grenland area now need to fight
for adequate framework conditions. If the gas
pipeline comes to Grenland, which I strongly
believe it will do, the area will flourish still fur-
ther,” adds Bakke.
“And I would like to point out that Grenland
is the jewel in Norway’s crown, both with re-
gard to industrial development and as a place
to live – with easy access to the coast, forests
and mountains,” says Sem.
hi! > Tom Karl Andersen
photo > Gisle Nomme
A changing Innovation Hydro hi! 25
Hydro may leave, but jobs remain

Little things can mean a lot, both for
the environment and the bottom line
When small
is beautiful
Research and development can be considered
complicated and difficult to access, but it is often
the simple things that provide the best results.
Henning Reier Nilsen

Henning Reier Nilsen.
“N
othing could be better than boos-
ting productivity and at the same
time achieving environmental
benefits,” says Director of Technology
Henning Reier Nilsen of Hydro Polymers.
“Excellent collaboration between Polymers’
R&D department and operations environment
is the key to the improvement projects that
generate better returns and make our busi-
ness more sustainable,” he says.
Reier Nilsen is one of the most experienced
petrochemical technologists in Scandinavia.
Though he has contributed to many develop-
ments, he is keen to stress that it is the inter-
play between all those involved that counts.
“Such projects are largely about developing
a process from an idea, via the laboratory and
pilot project, through to a fully-fledged plant
process. Many different kinds of challenges will
arise along the way. We technologists need to
be involved, following up operations and help-
ing to identify solutions to the problems that
occur,” he explains.
Last year was the best ever for Polymers
operations, and particularly for the VCM plant
at Rafnes in Norway. An important reason for
this success is a project that has resulted in
lower energy consumption per produced unit
and the possibility of increasing production.
“Research and development is often
considered complicated and difficult to make
accessible, but it is often the little things that
produce the best results – as for example
when we decided to install an empty pipe on
the cracker furnace at the VCM plant. This
enables the reaction to continue after the
process gas has left the furnace, without the
need to supply more heat”.
The result is 15 percent lower energy con-
sumption and 15 percent greater production.
“Others have tried this out before us, but
failed. This technology is now being installed
at QVC in Qatar, where Polymers have a 30
percent share. We hope to achieve the same
effect there,” says Reier Nilsen.
The improvements completed in 2006 en-
able even more ambitious targets to be set in
2007. Reier Nilsen is targeting daily produc-
tion of 1,550 tonnes at the Rafnes VCM plant,
which was originally designed for 900 tonnes
per day.
“The future will be all about the introduction
of biological raw materials; bringing renew-
able resources into the vinyl chain. Ethylene
gas and chlorine are the most important raw
materials in today’s PVC production. There are
several ways of extracting the ethylene of the
future from natural materials; one of them is
to gasify wood and obtain it via methanol, but
we are working on other ways also,” explains
Reier Nilsen.
Hydro has patented a technology that is
based on hydrogen-conductive membranes.
This may prove to be extremely useful for
Polymers.
“We can imagine using this technology in a
process where CO 2 emissions are dramatic-
ally reduced. The advantages are that CO 2
emissions will be very low and the ethylene
processing plant compact and efficient,” says
Reier Nilsen.
“Leading the field in the technology area,
with a complete understanding of our pro-
cesses, provides us with the opportunity of
being the operator in the industry that makes
the best possible use of resources, while pro-
ducing even better financial results.”
hi! > Trond Aasland
photos > Terje S. Knudsen, iStock.com
hi! 27

&
i
lo
Leak on results
investigated
A Norwegian newspaper somehow got
a hold of Hydro’s recent financial results
before the official release date, and an
investigation has been launched to dis-
cover what happened. “We’ll do what we
can to prevent it from happening again,”
CEO and President Eivind Reiten says.
Milestone for
Norwegian plant
January 28 marked the 60th anniversary
of the founding of the aluminium plant Årdal
Verk A/S, which Hydro acquired in 1986,
but a big celebration is planned for this fall.
Despite the phasing out of the Søderberg
facility this year, the plant will supply output
of more than 180,000 tonnes – much greater
than the original capacity of 24,000 tonnes.
Discovery in the
Barents Sea
Hydro has proved the presence of
oil and gas in the exploration well on
the Nucula prospect in the Barents Sea
off northern Norway. Further evaluation
is needed to determine the importance
of the discovery. The process was an
environmental winner, too, attracting
praise from Norwegian authorities.
Castings sale approved
Hydro has completed the sale of its
Automotive Castings business to
the Mexican automotive supplier
Nemak, following approval by the
European Commission. The European
operations included in the deal have a
total of 2,200 employees, while joint-
venture Castech in Mexico employs
1,000 people.
hi&lo

Ride
of a lifetime
It takes determination.
Paul Farrugia spent
16 days riding a motorbike
across South Africa
to help that country’s
fight against poverty
and disease
W
hen Paul Farrugia found out
about a gruelling motorbike ride
1,550 miles (2,500 km) round
South Africa, it took him about 30 seconds
to decide to take part.
Persuading his wife took a little longer, but
now he has raised £4,500 for charity, provided
vital transportation for African health workers
– and had the ride of a lifetime. Hydro helped
him on his way.
Paul, who works at Hydro’s Automotive
Structures plant in Worcester, UK, is no
stranger to charity events. “I’ll have a go at
anything, really,” he says modestly. He really
does mean anything: he had already com-
pleted a sponsored run from Land’s End to
John O’Groats for the Meningitis Trust. That’s
874 miles (1,400 km) from the southern tip of
the Cornwall, England, to the northern tip of
Scotland.
Thumbing the pages of Motorcycle News
magazine, something caught Paul’s eye.
Enduro Africa, a sponsored motorbike ride
around South Africa, was preparing for its
inaugural run and the organizers were looking
for participants.
“I’ve just got to do this,” was his first re-
action. He visited the organizers’ website,
which only strengthened his resolve. “It was
the reason that it was being done, the charity
aspect, that spurred me on,” he says. “It was
such a good cause.”
good neighbor
Enduro Africa is a unique and challenging
motorbike adventure in aid of Riders for
Health, which supplies motorbikes to help
health workers reach people to deliver pre-
hi! 29
>>>

ventative healthcare. The trip is organized by
Global Enduro and involves 100 bikers from
all over the world tackling 16 days of dusty
and demanding riding through some of South
Africa’s most rugged and isolated terrain.
Paul was already a keen motorcyclist,
and Enduro Africa appealed to his sense of
adventure. Although his four children were
enthusiastic from the outset, his wife took
some convincing – but once persuaded,
she gave him her full support.
Once his application had been accepted,
he spent 12 months raising the £4,500
necessary to take part. Paul organised
events ranging from virtual horse racing
to a 12-hour line dance marathon. “It was
an enjoyable 12 months, I got a lot of help
from a lot of people,” he says.
His colleagues in Hydro showed enthusi-
astic support. Paul wonders if it was because
they relished the prospect of seeing photos
of him getting chased and eaten by the local
wildlife. Africa is, after all, big game country.
“I had to disappoint them,” he chuckles.
Hydro supported Paul in his fundraising
quest, giving him time off work, lending equip-
ment for events and by rounding up the pro-
ceeds of one fundraising event from £320 to
£500. Paul praises the culture in Hydro that
allowed him to pursue the cause, and his
colleagues’ willingness to give money. “It’s
the way people are here,” he says, “People
are happy to help anyone in charity work.”
The ride took place in November 2006.
“It was absolutely stunning,” says Paul. “The
scenery, the people, the camaraderie, the
riding experience, the weather, the smiling
faces of children who just wanted to touch
you, the hospitality. The whole thing was
just overwhelming.”
“I feel extremely privileged and very lucky
to have been given the opportunity to have
After Riders for Health provided motorbikes to a district in Zimbabwe, malaria deaths dropped by 20 percent.
They now aim to provide reliable transport for health workers throughout Africa by 2015.
taken part in such an event. It was the many
generous donations that made it possible,”
says a grateful Paul, whose Yamaha bike has
now been handed over to Riders for Health
to be prepared for use by a health worker.
hi! > Colin Dobinson
photos > Global Enduro participants

Africa’s colossal distances
prevent health and development
agencies from
making an impact in the
fight against poverty
and disease. People are
dying of easily preventable
diseases, simply because
they cannot be reached.
Enduro Africa involves 100 bikers riding for 16 days through some of South Africa’s most rugged and isolated terrain. Hydro employee
Paul Farrugia is second from left. Afterwards, participants donated their new Yamaha AG200s worth £4,500 each to the charity.
Fast facts
Riders for Health
Millions of children in
Africa die of diarrhoea
and measles, simply because
no one can reach
them with healthcare.
Riders for Health trains
health workers to ride
and maintain motorcycles,
so they can
reach remote communities
with the kind of
regular healthcare that
we take for granted.
Enduro Africa is a
16-day sponsored ride
around South Africa,
where each participant
donates his or her new
Yamaha AG200 worth
£4,500 to the charity
after the event.
Despite Africa being
one of the toughest
environments there is
for any vehicle, each
bike will last at least
six years, cover
100,000 km and help
up to 20,000 people.
For more
www.riders.org
good neighbor
hi! 31

Art and
engineering
– two sides of the same coin
I’
in the US.
m a manufacturing engineer
at Hydro’s aluminium extrusion
plant in Kalamazoo, Michigan,
I’ve been here for about 15 years, and now
I program CNC (computer numerical control)
machines and a robotic welder to execute
precise semi-fabrication tasks. Some of the
products are truck bumpers, for example.
In my free time, I paint pictures of landscapes
and figures.
Who?
Joe Brown
What?
Manufacturing engineer
Where?
Aluminium Products, Kalamazoo, Michigan, US
For Joe Brown, his computer-driven engineering work and
his whimsical paintings complement each other – both
require foresight and determination to see them through
Engineering is very nuts-and-bolts, nothing
in common with art, you’d think. But my
work and art both draw on the same well of
creativity, and both require the same level
of determination to see a project through.
When creating art you must be fearless
and confident in your imagination and
creativity in your approach or you will never
complete anything or improve. Works the
same at Hydro!
Art forces me to try new techniques,
which helps me to not be intimidated
when something new comes along or
must be attempted, like different materials
and techniques.
With both engineering and art, you have
to think outside of the box. And you can ask
anyone, they’ll tell you I’m not just outside
of the box, I can’t even find the box!
I create a disciplined environment for
myself. I set specific goals I want to attain
and then I’m very systematic and creative

in how to reach them. In other words, it’s
“project management.”
Art helps me to see an end product – the
completed painting – and to envision the
steps required to meet my desired result.
Art helps me see a finished product before
there is anything tangible or physically there.
Art forces me to keep trying. I never start
a painting without finishing it, and sometimes
you are surprised by the end result. The
creative process in art forces you to work
Ask anyone, they’ll tell you.
I’m not just outside of the box,
I can’t even fi nd the box!
Joe Brown
through issues and perceived mistakes.
You are usually surprised at how well some
“mistakes” work out and actually become
part of your style, after the first unexpected
mistake they become planned steps.
Art helps me to listen to other people
and possibly use their ideas and visions
to create something they would like. When
completing a commissioned painting it is
just like working with a customer at Hydro.
You take their need, vision, desire and
attempt to create something that meets all
their requirements.
Much as I enjoy painting, I’m staying put...
I’m not quitting my day job.
hi! > as told to Craig Johnson
web link > see more of Joe Brown’s art at
www.joebrownart.com
my job hi! 33

A ‘new’ town with
a lot of history
Hydro Polymers
– Aycliffe plant
Employees: 400
Acquired by Hydro: 1982
Products: PVC resins and
compounds

T
he “Newton” part of the name
means “new town,” a British
program that created towns from
scratch, starting just after World War II.
Every square inch of England has a story
behind it, though, and this patch was
earlier called “Acley,” after the site of a
Saxon settlement.
The industrial site now occupied by Hydro
Polymers was used for munitions manufac-
ture – Royal Ordinance Factory No. 27, it was
called during the early 1940s. The Aycliffe
Angels, women who staffed the munitions
operations during the war, kept the factory
humming as well as the home fires burning.
Life in the early post-war years in Aycliffe
can only be looked at by our modern eyes
with awe. Returning soldiers didn’t know if
there would be work for them, the women
who ran the factories found themselves
largely unemployed.
There was little in the way of housing near-
by, meaning sometimes arduous “commutes.”
One worker counted himself lucky to be able
to cycle from home, 10 miles away as the
crow flies but many more in actuality.
First came Bakelite Ltd., an early plastics
company, as the first post-war owner. In fact,
for many years afterward, the faint outline of
the company name was still visible on one of
the original buildings.
Next came Bakelite Xylonite Ltd. the pro-
duct of a merger with British Xylonite. In 1974,
British Industrial Plastics entered the picture.
Hydro bought the company in 1982. The
operation nearly changed hands again, in the
late 1990s, when Hydro considered selling its
entire petrochemicals business to a European
competitor, but the deal fell through.
In the near future, a new logo – and name
– will mark the site.
hi! > Craig Johnson
photos > used with the kind permission of
www.aycliffeangels.org.uk
more on Aycliffe > page 18-21
postcard from Newton Innovation Aycliffe hi! 35
The Aycliffe
Angels at work.

Rolled
Products
has been
defined
a “core
business”
in Hydro.
What does
that mean
to you?
Markus Baier,
Controller,
Germany
Hans-Erik Vatne,
Plant Manager,
Norway
Miguel Lizarraga,
Production
Manager,
Spain
Monika Schucht,
Procurement
& Logistics,
Germany
Rolf Schencking,
Plant manager,
Malaysia
The uncertainty of
the past years has
changed. Since quite
some people left, we
must keep competent
colleagues. For this,
the message was
important. I do not
see us going hunting
for additional capacities,
but within our
frame we will work to
improve our market
position.
There is no doubt that
the prolonged strategy
process in Hydro has
created much uncertainty
in the Holmestrand
rolling mill. We
have lost a couple of
key persons in this
period. It is therefore
very well received. This
enables our complete
organization to focus
100 percent on the improvements
in quality
and productivity that
are required in order to
increase our profitability
to a satisfactory level.
For us, the situation
remains unclear. Since
2000, we have had no
major investment. We
need to revamp the
cold mill. It would cost
twice our annual profit.
But by doing this and
by focusing – narrowing,
concentrating –
our product portfolio,
we could add much
more to the benefit we
genuinely create with
the short lead-time of
our continuous-casting
process.
When I attended a
leadership course four
years back, we forecast
this way forward for
Hydro. Now that the
split will come, we need
to solidify our position
in the market for the
coming years. I hope a
new drive will come to
inspire our organization.
This calms down worries
in Rolled Products,
as we now can expect
more stability for our
employees. But as a
core business, we must
answer the question,
How we will grow? Still,
we are well positioned
as a supplier into Asian
markets. But within five
years, this will be seriously
threatened unless
we take measures.
hi 55
Print: Kampen Grafisk, Oslo