Cuts pay off as Hydro profits

By Robert Harris

FERTILISER giant Hydro Agri has reported a huge leap in income for 2000 thanks to improved productivity and above-forecast returns from the market.

Operating income during the year hit 1.3bn Norwegian krone, (100m), compared with a loss of about 154m last year.

During the year, the company cut 1m tonnes of nitrate capacity, which included mothballing its Immingham, North Lincolnshire plant, and cut 1500 jobs worldwide.

Thorleif Enger, senior executive vice president, said the turnaround had been achieved with a “vigour and speed” that surpassed expectations.

“The measures implemented have been more effective than expected.

“We can now say that Hydro Agri is over the worst with regard to manning reductions and restructuring.

“We have done the heavy work, but I have to point out that this is an ongoing process.”

He also admitted that developments in the fertiliser market were better better than forecast.

“We had expected energy prices to eat up much of the gain from higher fertiliser prices,” he said.

Hydro, and other makers, have raised prices substantially in the past 12 months.

Nitrogen, typically costing 132/t delivered this month, is 38-40/t more expensive than in February 2000, and compounds have risen by about 20/t over the same period.

“It now seems that fertiliser prices have risen higher relative to energy prices, which has had a considerable effect on our results.

“This is very gratifying and is the reason for the 2000 result being as good as it is,” said Mr Enger.

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