Manufacture sector

The largest manufacturing industries in Iceland are the aluminium smelters, which produce exclusively for export. Other manufacturing exports have also grown considerably in recent years. In 2007, manufactured products accounted for 39% of total merchandise exports, up from 22% in 1997. Power-intensive products (mainly aluminium) amounted to 29% of total merchandise exports in 2007, as opposed to 12% in 1997.

A number of export-oriented manufacturing companies have emerged in recent years. Some have grown from small and medium sized enterprises to become key international players in fields such as medical equipment, pharmaceuticals, and capital goods for fisheries and food processing. Most of these companies are founded on product innovation, R&D, strategic marketing and ITC. These industries now account for approximately 1/4 of manufactured goods exports.

Iceland’s aluminium industry is mainly based on competitive energy costs and a skilled labour force. Aluminium production has risen sharply in recent years, from 210 thousand tonnes in 2000 to an estimated 770 thousand tonnes in 2008. The largest smelter, owned by Alcoa and located in East Iceland, commenced production in April 2007 and will reach its full capacity of 346 thousand tonnes per year (tpy) in 2008. Century Aluminium’s smelter in Southwest Iceland is also being expanded from 180 thousand tpy to 270 thousand tpy by 2008. A new plant owned by Century Aluminum is under construction at Helguvik in Southwest Iceland. The first of two stages of construction will be on line with a production capacity of 150 thousand tpy in 2011. Alcan Iceland’s smelter near Reykjavík has a capacity of 180 thousand tpy, with planned expansion to 230 thousand tpy by 2010. The total production capacity of the aluminium industry in Iceland will therefore be around 1 million tpy in 2011, or nearly fourfold the production level in 2006. This will make Iceland one of the ten largest aluminium producers in the world, with roughly 3% of global production. Icelandic Alloys (Elkem ASA) is a ferrosilicon plant with an annual production capacity of 120 thousand tpy.

Economy of Iceland,Central Bank of Iceland