Hydro to Make Changes to US Operations

The European-based aluminum producer Hydro has announced plans to close its Monett, Mo., aluminum extrusion operations as the company attempts to bring supply and demand into balance. In addition, the company announced that it is bringing new fabrication activities to its Arizona operations.

The Monett-based plant was built in 1964 and acquired by Hydro in 2000. Hydro says that despite internal improvements, profitability at the extrusion site has been an issue for many years. A key problem has been demand from its key market segment – building and construction – has been soft and remains uncertain.

Matthew Dionne, president of Hydro’s North American aluminum extrusion business, says the company explored divestment of the plant before deciding to close the extrusion and fabrication activities. Operations are expected to conclude in October.

“Demand in the U.S. market has picked up this year, but we are still challenged by overcapacity in our industry. It is unlikely that the Monett plant could perform in a sustainable manner moving forward,” says Dionne.

The Monett plant has two extrusion presses in addition to painting capabilities. Hydro also has an aluminum casthouse in Monett. “The casthouse will remain part of our service portfolio as a supplier of quality metal,” says Dionne.

Three years ago, the company consolidated its extrusion operations from nearby Cassville to the Monett site.
Hydro also announced that it has added 60,000 square feet of manufacturing space dedicated to fabrication at its Phoenix operations. The expansion also includes the addition of CNC machining and product assembly, and the doubling in the number of engineers for customer and operational support.

“The move will help secure the jobs at the plant and add new jobs, but the number is unclear at this point,” says Dionne. “Our intention is to create an integrated fabrication center of excellence in Phoenix for the years to come.”
 

With the addition of this new fabrication center, Hydro will let a previous agreement with The Offshore Group expire at the end of this year. The agreement covers metal fabrication work that Hydro has been contracting from a facility in Guaymas, Mexico.

In related news, Hydro has signed an agreement to sell its Portalex extrusion plant in Cacém, Portugal to Bavaria Industriekapital AG. The transaction is expected to close on Aug. 31, 2012.

In a release, Hydro says that the Portalex facility has felt the downturn in the Portuguese market and struggled over the last years. The company has two extrusion presses, a remelter and a full range of added-value activities.

Portalex will be the second plant in three years that Bavaria Industriekapital has acquired from Hydro. The other was the Inasa rolling mill near Pamplona, Spain.