Background
Frank Iepema studied at the Eindhoven University of Technology and started his career at Alcoa in the Netherlands. After three years, he moved to Hungary in 2003 to join the Hungarian sister plant in Székesfehérvár (then Alcoa, later Sapa, and now Hydro). In 2014, Iepema became the managing director of the Aluminium Extrusion plant based 60 km southwest of Budapest. During his 20 years in Hungary, he has driven a significant plant transformation: the old-style, low-cost, volume-driven aluminum company has changed into a modern, value-driven, and highly innovative business mainly serving the premium automotive market. Since 2012, the company has focused on e-mobility and took the next steps in sustainability last year by beginning construction of a new aluminum recycling facility next to the current plant. With his Hungarian wife, he is raising two daughters. The family enjoys exploring nature on the weekends together. Besides these healthy outings, they often kayak and swim in Lake Velence. Iepema was a runner-up in the Budapest Business Journal’s Expat CEO of the Year Awards in 2022.
What is the greatest challenge currently facing the industry?
The aluminum extrusion industry for the automotive sector, especially in Europe, is grappling with several major challenges. The most urgent are transitioning to more sustainable practices and staying cost-effective in an unstable market with unpredictable and fluctuating demand. To overcome these challenges, the industry must maintain a high degree of flexibility, reduce carbon emissions, and increase the use of recycled materials, all while remaining competitive in a cost-sensitive market.
How is the rise of electric vehicles impacting your sector of the automotive industry, and what initiatives is your company undertaking to adapt?
Electric vehicles are heavier than traditional cars due to their large battery packs. To offset this added weight, car manufacturers are increasingly turning to aluminum, which is lightweight, strong, and sustainable. Aluminum can be recycled repeatedly without losing its properties, making it an ideal material for this purpose. The demand for aluminum is surging as the amount used in electric vehicles is up to ten times greater than in conventional combustion-engine cars.
In response to this growing demand, we have invested in expanding our production capacity in Hungary. By 2024, we will finalize a EUR 35 million investment in a highly efficient extrusion press specifically built for the needs of the electric car industry. We are also investing over 30 million euros in special machining and assembly cells for battery modules.
What do you foresee as the most significant opportunities and challenges for your business in Hungary?
The future of our aluminum extrusion business in Hungary is shaped by both significant opportunities and challenges. The growing demand for lightweight, sustainable materials in the automotive sector presents a clear path for expansion and innovation. However, rising energy costs, uncertainties around electric mobility, and fierce Chinese competition pose substantial challenges. We invest strategically in technology and talent and prepare for constant changes in customer demand and product design with advanced, flexible production concepts. By doing so, we can turn these challenges into opportunities and secure our position as a leader in the European aluminum extrusion industry.
How is your business addressing sustainability and environmental concerns associated with your segment in the industry?
Driving sustainability is central to our mission and a key driver of growth. Our customers value our low-carbon aluminum, which is made with a high percentage of recycled content. We have recently opened a huge new recycling plant (an EUR 88 million investment) where we will process both industrial scrap and post-consumer scrap, such as old aluminum wheels and window frames. By giving aluminum a new life, we use 95% less energy compared to producing new aluminum.
I am proud that Hydro is truly living up to its commitment to sustainability. The investments in our high-performing Hungarian plant have been substantial and impressive. Increasingly, customers are choosing to purchase our recycled products and even recycle their own scrap with us. We recycle—join the loop!
This article is going to be featured in the Top 50 Executives, The Most Influential Automotive Executives in Hungary 2024 issue of November 4, 2024.
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