Hydro has entered into an agreement to divest its aluminium rolling mill in Irurtzun, Spain, to the German industrial holding company Bavaria Industriekapital AG.
TO BE SOLD: Hydro has agreed to sell its aluminium rolling mill in Irurtzun, Spain. (Photo: Terje S. Knudsen)
The agreement opens up for a more viable development of the small Inasa plant, located near Pamplona, while Hydro will continue serving its global customers of rolled aluminium products, including in Spain.
The transaction is expected to be cash-neutral and result in a book loss after tax of about NOK 200 million in the fourth-quarter results. Pending regulatory approval, Hydro expects the transaction to close by the end of 2009 or in early 2010.
"This is a good solution for the employees and for Bavaria, who can develop their business in a new context, but also for Hydro, as we pursue the strategy to optimize our portfolio in rolling and focus on our core mills," says Executive Vice President Oliver Bell, who is responsible for the Rolled Products business area in Hydro.
The Inasa plant was established in 1956, and joined Hydro in 2002 as part of the acquisition of VAW aluminium AG. It has a production capacity of 30,000 tonnes per year, mostly light-gauge foil and strip. It currently has 221 employees, making it Hydro's smallest mill in Europe.
Hydro is a leading, worldwide supplier of rolled aluminium products, shipping up to 1 million tonnes per year. The rolled products business area employs a workforce of more than 4,000 in a strong network of European rolling mills in Germany, Norway and Italy, plus one foil rolling mill in Malaysia. Hydro is the world market leader in the manufacture of lithographic sheet for the printing industry and of ultra-thin foil for aseptic packaging.
Bavaria Industriekapital AG is specializing in the takeover and re-organization of enterprises that yield little or no profit. In October, the company signed an agreement to acquire the Inasa plant's local competitor, Alcoa Sabiñanigo.
After the agreed transaction has been closed, Hydro will continue to serve the Spanish sites of its global rolled products customers and maintain its area sales office in Barcelona.
Hydro is the leading player in Spain's extrusion business and also in the field of aluminium building systems, and recycles aluminium at its remelt plant in Azuqueca. Hydro has more than 700 employees at these sites, located mostly in northern Spain and close to Madrid.