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Hilde Merete Aasheim ‘A company cannot be profitable in the long term if it isn’t sustainable’

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When Hilde Merete Aasheim started working in the metals and mining industry, she did not think she would need to become quite such an expert in crisis management. Yet during the past decade, the chief executive officer of Norwegian aluminium and energy company Norsk Hydro has found herself helping to lead the corporate response to a global financial downturn, a paralyzing cyber-attack and the Covid-19 pandemic. “Good at picking a crisis? I’ve only been in difficult moments!” she laughed.

Aasheim had not planned a career in metals and mining: initially, she had wanted to follow in her father’s footsteps as a teacher, as her older sister had. Born in 1958 in Larvik, a small town a 90-minute drive south of Oslo, Aasheim was the youngest of non-identical twin sisters with a brother and sister four and 14 years older, respectively. They were, Aasheim said, “a good family”.

Her mother – who turns 100 this month – stayed at home to bring up the children. Aasheim’s father, a languages and humanities teacher who had fought in the Second World War, was a huge influence on her as she grew up. “My father had a strong personality in the sense that he worked in the resistance group fighting for the freedom of Norway and was imprisoned for that. He taught us a lot about fighting for what you believe,” she said. “He was the sort of person with integrity in all aspects – acting as a good citizen, being disciplined and a good person – so I have a lot from him, or at least that’s what people say.”

During each summer holiday for seven years, Aasheim worked in a local bakery. “I started on the floor putting the sugar on the cakes, but then after a while the CEO of the bakery wanted me to go to work in the orders department, then the salary department, and then in finances. You don’t get that close when you do a master’s degree – you go only to the university and don’t do the practical work,” Aasheim said.

As well as understanding a business from top to bottom, she learned a lot from the bakery CEO, Svein Arne Næss, about leadership. “He taught me a lot about engagement: he had his white clothes on to prepare the breads even though he was CEO, and then he would come to us while we did the orders,” she said. “He also taught me about being a visible leader and appreciating people on the floor, because that was what it was all about – preparing the products and sending them to customers at 6am. I have high regards for my former boss there and still have contact with him today,” she added.

Næss was extremely proud when Aasheim was announced as Hydro CEO; he baked a large cake and jokingly claimed some ownership of her success.

Aasheim enjoyed school so much that she advocated for attending on Saturdays and created her own classes with the children in her street, teaching them with books borrowed from her father. But she changed her mind about teaching as a career when one of her cousins went to study business and opted instead for business school in Bergen, on Norway’s west coast.

With a bachelor’s degree in Public Accounting and then a master’s degree in Business Administration under her belt, Aasheim’s first job after graduating was at former accounting firm Arthur Andersen, where one of her key client groups was the processing industry in Norway, and in particular Elkem.

Almost immediately, she was hooked. “There I was, auditing plants in small locations in Norway, and I got this fascination with the waterfalls being used to produce something that was needed – ferro-silicon, silicon metal, ferro-manganese,” she told Metal Market Magazine.

“I developed a fascination for local communities that had a joint destiny with the company, because if the company did well the local society did well too. I also had a fascination with the engineers being able to transform raw materials into something that was needed.”

From Elkem to Hydro

A few years later, Aasheim joined Elkem, which was founded by Sam Eyde, a Norwegian engineer and industrialist who also founded Hydro. Starting in 1985 as a financial controller, she became Elkem’s first female director after a few years.

“I was then asked to be the head of Human Resources, and at that time I was pregnant with my first child. I had to say to the CEO I had a very important delivery to make and could not accept!” she laughed. “But when the announcement of the birth was made in the newspaper, which it was back then, a big bouquet of yellow flowers was sent to the hospital with the note attached saying, ‘Will you take the job?’ Three months later I was on the corporate management board of Elkem, heading up HR,” she said.

Aasheim spent eight years in the role, business-orienting the HR function. “I have a lot of interest in people. I see that business is about strategy, producing the right products to the right market segment, but it’s also a lot about people,” she added.

At that time Elkem was very influenced by US aluminium producer Alcoa, with the two companies having an aluminium joint venture. Aasheim was later a plant manager for the Mosjoen, Norway aluminium smelter which was part of the Elkem JV.

“I had the privilege of working closely with Paul O’Neill, then Alcoa CEO, and participated in Alcoa’s executive leadership programme in the 1990s – I could talk for several hours about that!” she said.

“That was perhaps the most exciting period in my career, to be in charge of a plant – to really have responsibility for the people and their safety, to deliver on time to customers; that was really getting close to the business,” she added.

By 2002, Aasheim had been named head of Elkem’s silicon metal division, one of its main business areas at the time. And then she got a call from Hydro CEO Eivind Reiten, who ran the company from 2001 to 2009. “He offered me the job of head of leadership and culture in Hydro. But I wasn’t that interested in a staff position, so I said I didn’t want to waste his time and that it wasn’t the right thing for me. So Eivind said, ‘Why don’t you come and have a coffee?’” Aasheim recalled.

Norwegian conglomerate Orkla ASA had just taken over Elkem and the company was delisted from the stock exchange. Reiten was very persuasive. “It was the perfect time for Eivind to ask me to join Hydro, which I did,” Aasheim added.

She joined Hydro in October 2005 as executive vice president for Leadership and Culture, a role that encompassed human resources, health, environment, safety and corporate social responsibility.

Hydro had just exited the fertilizer business, Yara, and was firmly in aluminium as well as oil and gas. Aasheim knew nothing about the energy business at the time, but that was something that was to quickly change.

“I had asked the CEO if he could give me some advice coming into Hydro, and he said that in order to succeed in a staff position, you need to be relevant. In aluminium I could be relevant because I knew the business, but in oil and gas, I needed to learn,” Aasheim said. “So, I went to the head of the oil and gas business and said, ‘Here I am, could you please help me learn about oil and gas?’ It was a risk for me – he could have said, ‘You should have thought about this before you joined Hydro!’”

But only a week later, Aasheim was offshore, working on an oil platform; she followed this with a geology trip to Scotland, learning how to extract oil, and then a stint on the company’s oil and gas trading desk. She was deeply impressed at the competence needed to explore for and extract oil and gas, a lesson that she had learnt in metals at Elkem and which has continued in aluminium at Hydro since.

“Even though I am a financial person, I have a high regard for the critical processes and really focus on this in the business systems today,” she said. But after around a year, the Hydro corporate management board started to realize that its oil and gas business “was too small to conquer the world,” Aasheim said. “We were fighting head to head with Norway’s Statoil over a large project in Russia at that time,” she added.

In December 2006, Statoil and Hydro’s oil and gas business came up with a plan to merge. Aasheim, who was still head of Leadership and Culture, was going in and out of the two companies’ negotiations team meetings to provide them with the manning numbers. The deal was still not public.

Two days before the merger was announced, Aasheim was called to a meeting with Hydro CEO Reiten and Statoil CEO Helge Lund. It was a Saturday, and Aasheim’s first thought was, “I’ve really screwed up the manning numbers!” she laughed. But instead, the pair asked her to take the lead on the integration and planning for the merger. Aasheim was given an hour to decide. She called her husband and made the decision to accept the role.

Two days later, the biggest merger in the Nordics was announced and Aasheim was named as Head of Staff except Financials based in Stavanger, the Norwegian headquarters of the new Statoil. She was also on the merged entity’s corporate management board.

In order to be credible, Aasheim realized as she accepted that she would have to leave Hydro and go with the new company. “One advantage was that I was almost neutral – I had only been in Hydro a year, and if they had taken a person who had worked with either company for years, it would have been too one-sided. I was able to look at what represented the best from each company and take that forward, instead of favouring one over the other due to loyalty,” she noted.

Focused now on purely oil and gas, the integration was a big job. Aasheim had 200 people working with her along with multiple consultants. The new company started operations as StatoilHydro in October 2007, subsequently changing its name to simply Statoil in November 2009.

In the summer of 2008, however, Hydro CEO Reiten called her again. “He said to me that when he first recruited me, I hadn’t been that interested because I wanted a line position, and now he could offer me that. He asked me to be Head of Primary Metal.”

It was a hard decision. Typically staying for years in a role “because I’ve always enjoyed what I was doing,” Aasheim really liked working with Lund. So, she made a list of the pros and cons of leaving StatoilHydro. “I realized that to go into a line position in oil and gas would be a tough call in the sense that I would have to step down from the corporate management board in order to learn, and to run an oil rig or something, which would be very different. I still felt my heart was in my fascination for waterfalls and metal plants,” she said.

It was difficult to tell Lund she was leaving. “I felt I had a lot to do still there. It had been good for me to have a different background [metals], because I challenged cost levels,” she noted. “Some of the Statoil corporate management board shook their heads and said, ‘Hilde, are you going to melt aluminium and leave this billion dollar business?’ But I had been working in aluminium for more than 20 years at that time, and I accepted,” she added.

Global financial crisis

When Reiten met with Aasheim to sign her employment contract, London Metal Exchange aluminium prices were $3,000 per tonne and Hydro was set to expand its Karmøy operation. Three months later when she rejoined Hydro, LME aluminium was $1,400 per tonne and, after three weeks, Aasheim went to Karmøy to prematurely close the plant’s old Søderberg potlines.

It was a baptism of fire into the role. Hydro had “serious problems,” she said. “I had to do a lot of cost cutting, but also curtailing – 25% of our smelting capacity – and after a while, I realized we simply had too high costs,” she added. By now, Aasheim was working closely with Hydro’s new CEO, Svein Richard Brandtzæg; Reiten left Hydro in April 2009 to become Chairman of forestry products company Norske Skog.

She established a programme designed to reduce Hydro’s smelter costs around the world, first by $100 per tonne of metal produced by the end of 2011, then with an expansion to $300 per tonne by the end of 2014. “To start with, people thought I was crazy. But I spent a lot of time in the initial programme demonstrating what current costs were and what the target was, to show that there was potential – and not just in the traditional areas but also in procurement, logistics, so that everybody could be engaged in looking for opportunities within their own departments,” she said.

“Eventually those potential cost cutting opportunities were found by the teams and people at all levels of the organization, not by me,” she added. It was an example of the leadership style that Aasheim believes in – setting direction but also engaging people, “because people are willing to contribute if they understand why.” A decade later, when Brandztaeg retired, Aasheim became Hydro CEO.

New agenda

When she took the helm of Hydro, Aasheim met with its board and investors and took the view that profitability – at Hydro and across the broader aluminium industry – had been too low for too long. She spelled out a new corporate programme: ‘lifting profitability, driving sustainability.’

The strategy targets an improvement programme of NOK7.3 billion ($1.36 billion) by 2023, and is front-loaded, with NOK2.7 billion ($0.5 billion) coming from getting back to full speed in Brazil, where the company has faced various issues in recent years. The company is on track to deliver its NOK4.1 billion ($0.76 billion) target for 2020, she added. “Some people perhaps choked on their coffees, but I wanted everyone to realize what the current situation is, because when they realize, they start to contribute,” she said.

Sustainability is integral to the strategy, and is in step with the opinions of consumers, particularly young people, as well as investors and the company’s own staff, she noted. “A company cannot be profitable in the long term if it isn’t sustainable – if you’re not able to demonstrate that you are producing in a responsible way with as low a carbon footprint as possible, and you can project that the footprint is getting lower and lower,” she told Metal Market Magazine.

Hydro has a target of reducing its already-competitive carbon dioxide emissions in its own production and processes by a further 30% by 2030. Sustainability is also about responsible mining, through the entire supply chain; for example, Aasheim is currently engaged with a project on safe tailings disposal at the International Council on Mining & Metals, plans to replace historical oil and coal-based production in Brazil with gas and electrification respectively, and is focused on reforestation across its operations.

The company is also seeking alternative, non-landfill uses for residual tailings and is even exploring whether it can avoid tailings entirely, Aasheim noted. “The entire supply chain matters, and we should be in a good position here because we are in the whole value chain and have a lot of competences. We have to defend and promote aluminium as a material, and sustainability is very much about that,” she said.

Hydro is a member of the Aluminium Stewardship Initiative (ASI), a global, multi-stakeholder standards-setting and certification organization. The company now has the longest unbroken chain of ASI certifications in the industry, from mining through refining and primary aluminium production to fabrication of end-products.

According to Aasheim, profitability is not just about EBIT, but also about how a company uses its cash and capex. This led her to announce a goal for over-the-cycle return on capital employed (ROCE) of 10%, up from 6% in 2019 and lower in prior years. “We had never announced the ROCE target externally before, and I wanted to put that out there very visibly, making sure that we allocate capital in areas we’ve had very high profitability in the past and avoid allocating capital in areas where returns have simply been too low,” she said.

Based on this, the company has defined strategic goals for its different business areas; it will sustain and improve, but not necessarily grow, its upstream business, and invest further in renewables, batteries and recycling. The company’s push into renewables comes as it recognizes growth in that sector as well as a desire to diversify into an emerging megatrend where it can use existing strengths, Aasheim said. This includes batteries in recycling and transportation, wind power in Norway and solar energy in Brazil; it will not include a move into mining other raw materials like lithium or cobalt, although it could involve recycling them, she added.

Coping with Covid-19

When the Covid-19 pandemic initially emerged, it shuttered Hydro’s three extruded-products plants in Shanghai and Suzhou in China. But it was “not something that would be left in China,” as the company had initially thought, Aasheim said.

As the virus spread around the world, the company’s operations across 40 different countries were impacted, particularly its downstream business, where 30% of capacity was reduced at one stage as demand slumped in key end-use markets such as transportation, housing and construction. Its upstream operations largely continued as normal.

“We [Hydro] are very good at handling crises. During the cyber-attack we saw an extraordinary effort in an extraordinary situation, and it’s the same for Covid-19,” she told Metal Market Magazine. By the time Covid-19 reached Brazil, where cases have been extremely high, Hydro was able to use the lessons it had learnt from its experiences elsewhere to rapidly deploy initiatives to mitigate the situation.

“There are two priorities – the absolute first is the health and well-being of our employees and their families. That has been very clear, and we’re doing our utmost to reduce the spread of the virus inside the plants and also helping outside. But at the same time, we also want to keep the wheels turning as best as we can,” she added.

The company is expecting weak end-use markets for some time, Aasheim said, with a high level of uncertainty on how and when the economy will pick up, whether the various stimulus efforts will work, and whether there will be another wave of Covid-19. “In some areas we don’t expect a pick-up until 2023 or 2024,” she added.

Despite the benefits of the various improvement programmes, the company has frozen capex, issued bonds and suspended its dividend as precautionary measures to preserve cash in the event that the pandemic and its impacts are felt for some time.

Aasheim said that the methodology of how to behave and coordinate through a crisis makes it easier to get an overview of Covid-19 quickly, understand the critical points and then act based on those learnings. “You have to prepare for the worst and hope for the best. If you only hope for the best, then you’re not prepared,” she added.

Surviving cyber attack

Hydro’s crisis preparations had actually included several training exercises for a potential cyber attack. But even then, Aasheim said that you can’t imagine what it is like until you are in the midst of it: “You’re almost blindfolded. You have to be as prepared as possible and then you have to improvise along the way.”

When Aasheim first heard that Hydro was the victim of the metals and mining industry’s first publicly disclosed cyber attack, she did not believe it was real. The phone woke her in Oslo, Norway; it was 4am, and her appointment as the company’s new CEO had been announced the prior day. “I answered, and a voice said, ‘Hilde, we are under serious cyber attack. This is not an exercise. You had better come to work.’ I wondered, is this a joke, is someone testing me?” she recalled.

It was neither a joke nor a test. Using relatively new ransomware known as LockerGoga, hackers had infiltrated the company’s systems globally, impacting its 170 sites and 35,000 employees around the world. The company immediately took the decision not to pay the bitcoin ransom and went public with the news of the attack. It is a move that won Hydro accolades from the security industry for its transparency.

This allowed a forensic team – including technology providers – to thoroughly remap and learn from what happened, tracking backwards to see how the hackers moved around the system and confirming how sophisticated the attack was. It turned out to be something of a Trojan horse: the hackers had chosen their ‘patient zero’ – an email conversation with a Hydro customer – months in advance. The virus was eventually placed throughout the Hydro system and launched by a code.

By affecting the company’s ability to access its systems, the attack also impacted industrial production at some of Hydro’s sites. Fortunately, energy, bauxite and alumina managed to run as normal, while the primary metal plants also continued as usual with a higher degree of manual operations. The rolled products operations meanwhile were mostly back to normal within a couple of days.

Badly affected, however, was Hydro’s extruded solutions business, which relies on highly specialized customer-specific data being fetched from the servers detailing what to produce. As a workaround, any orders that the company had access to on paper had to be manually punched into the systems. Once these were fulfilled, production had to stop.

Although Hydro’s cyber defenses are industry-standard, the company is not reticent about the likelihood of another attack in the future and it has redesigned and strengthened its systems accordingly. For Aasheim, it is only a matter of time. “We are sharing our experience as industry players will become victims of future cyber attacks, whether it is us or someone else,” she said.

Women in commodities

As one of very few female CEOs in metals and mining, Aasheim is very conscious of the need to push for greater gender diversity within the industry. “There’s a real business case for tapping into the entire workforce – women make up half the population, so why shouldn’t we utilize that 50% of the recruitment base?” she said.

Even as Hydro CEO, Aasheim has experienced gender bias. She recalled an industry meeting after which the CEOs were asked to group together for an official photograph. Taking her place in the line-up, the photographer asked her to leave it as the shot was “only for the CEOs.”

The industry needs to deal with this kind of bias by promoting equality as a value, she said, “which is not only about gender but also about race, age and background, because we need diversity,” she told Metal Market Magazine. “We have different backgrounds, and we bring more collectively to the table than if we were all the same as each other,” she added.

Aasheim said where you are based also plays a huge role in facilitating the return of women to the workplace after childbirth, with Norway having a good set-up for families and some areas, such as the USA and Brazil, having shorter maternity leaves. “We have a lot of work to do, and the industry can help to go beyond the law. In Hydro, we have more space to do that,” she said. “The industry is quite good at bringing young women in, but by the time we look to recruit them as middle managers, some of them have already gone.”

From the outset, Aasheim’s father instilled a strong sense of regard for the role her mother played and made her believe firmly in equal opportunities. “We always had this notion that we could do what we wanted to do and there was equality in the gender sense,” she said.

Another key inspiration for Aasheim was Norwegian prime minister Gro Harlem Brundtland, whose influence was twofold: she was a successful politician and mother of four, as well as one of the earliest proponents for sustainability. “She worked hard as a minister to create kindergartens as something that is offered to all as a public service. For her that was a business case for Norway – we needed the females to come to work, so it was obvious someone needed to take care of the children,” Aasheim said.

“That was also the first time I heard about sustainability. She set the scene very early on – not just in her work as Environment Minister, but also in her later work at the World Health Organization – in establishing that economic development and bringing people out of poverty is part of sustainability. It was an interesting learning for me and has always been brought with me,” she added.

Aasheim said her own experiences have demonstrated that natural resources can offer a variety of roles. “Perhaps I have been fortunate with the people I worked for, but having said that, you also have to sacrifice something in order to be in a position where you’re seen and are promoted,” she said.

“I have had very good support from my husband over the years – we’ve helped each other, and he also had to sacrifice. Hopefully that is easier now than it was during my generation, or even the one before me,” she added. Aasheim met her husband, Tom Erling, in high school in her hometown at 18 years old; the childhood sweethearts have been together for over 40 years since. The couple have a son and daughter, “who are now grown up and of whom we are very proud.”

In her spare time, Aasheim walks a lot. She lives close to the woods and uses this as the opportunity to refresh her mind, or even prepare a speech or presentation in her head. She also reads, and in the winter goes cross-country skiing, which is a skill she learnt when she was small. “It’s like riding a bike – once you know how to do it, you never forget!” she said.

Her children are “definitely not in metals” – in fact, her son is a famous comedian in Norway working for NRK, the Norwegian government-owned radio and television public broadcasting company. “Performing for the company annual party? That I have said is a no-go!” she laughed.

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