Presentation1

Landtransport kontra sjtransport, hva pvirket valgene i Hydro Aluminium?

Presented by Elisabeth Holmsenlesund 24. March 2010

(EH) 2010-03-24

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Norsk Hydro Business AreasCEOSvein Richard BrandtzgEnergyOla SterPrimary MetalHilde M. AasheimMetal MarketsKjetil EbbesbergRolled ProductsOliver BellExtruded ProductsJohnny UndeliProjectsTom Rtjer

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Casthouse Products

Sheet Ingot

Extrusion Ingot

Wire Rod

Foundry Alloys

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L&D Casthouse outbound transport

Casthouseproduction

InboundInternalOutboundTruckTruckDirect truckingRailBargeRailSeaInternaltransport

CustomerslocationsSuppliersStevedoringLiquidRemeltScrapAlloys

Loading

Various transportation modes in the Casthouse value chain

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Distribution pattern and volumes 2010

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Norwegian system820 000 mt ~ 32 500 trucks

Norwegian Casthouseproduction

TruckTruckDirect trucking/train165 000 mt~ 6600 trucksRailBargeRailSea transport1100 000 mt ~ 550 VesselsCustomerslocationsStevedoring

22 000 mt260 000 mtAnnual sales orders approx. 50.000Transport volumes

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Customer Demands Flexibility Lead time OTD Preserved qualityDecision on solution and providerCost Total cost to market Front haul/back haulHES Type of Vessel Procedures ProvidersNo of kilometers on roadSolutions availability Fleet development Port restraints Truck capacity Front haul/back haul FlexibilityQuality Number of handlings Exposure to weather Load securing ReliabilityDecision parameters

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Case example rdalBackgroundrdal has a yearly production of approximately 190 kmt SI and 130 kmt FA.

Hydro has a major market for FA products in Central Europe

In 2009 there was a shift in volumes. Hydro needed to redesign the logistics solution in Sognefjorden.

OptionsExtra vessels to Amsterdam

Direct trucking to Central Europe

Re-open vessel solution to Baltic (Rostock)

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Alternatives - illustration

1600 km / 1450 km1650 km / 1300 km1900 km / 1350 km Not significant differences in trucking distance to between alternatives

Back haul / front haulrdal Poland back haul Amsterdam Poland front haul

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Order fulfillment timeline (leadtime) Norwegian sources - Normal orders - Make-to-Order production

12111098765432112345678911234567891011121314151617181920

Production planningPCall off/Booking/OptimizingShipmentScandinavia 14 days (EI)Continental Europe3.5-4 weeksIberia4-5 weeks

TruckingSeaborneStevedoringMediterranean4-7 weeksItaly & Greece2019181716151413

ProductionTrucking FA toCentral Europe3-4 weeks

Sales & Marketing; Metal Management Primary MetalLogistics & Distribution

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The alternatives - advantagesTrucking Norway - Central Europe is back haul High flexibilityShort lead-timeLimited no of handlings preserves qualityCost advantageous

Seaborne thru Amsterdam Experienced and professional providersReasonably good vessel availability Continent: good truck availability - alternatives available

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The choice Direct trucking to Central Europe

A competetive vessel solution via a port in the Baltic The future preference

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www.hydro.com

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