Editors’ Note

Knut Flakk is also Chairman of the Board of Directors of Hexagon Composites ASA. He also serves as a member of the Company Nomination and Remuneration Committees. He has experience in industrial company start-ups, and development and operation in Norway and internationally. He is a former Chief Executive Officer of the company and has served as Chairman of the Board of Directors of all its main subsidiaries.

Company Brief

The Flakk Group of Companies (flakk.no) consists of businesses in different industries, ranging from travel and tourism to helicopter services, energy-saving building materials, light-weight composites, innovative log homes, and natural textiles. The diverse group of companies are all aiming to develop products and services that can contribute to the enhancement of life and to a sustainable environment. From a modest start two generations ago, the Flakk Group has grown into a medium-sized group of companies with a broad international presence.

How would you describe the Flakk Group?

The Flakk Group is a privately held company that has several subsidiaries in different industries, including travel and tourism. The Hexagon Company is the public part of the Flakk Group. We are the largest shareholder in Hexagon, which is traded on the Oslo Stock Exchange so it’s a company that has a number of shareholders in addition to Flakk.

What products does Hexagon produce?

It makes products out of composites, which are basically fiber-reinforced plastics. The majority of the products we make are for storage for natural gas and hydrogen for the transportation industry. We see an increasing use of natural gas in the transportation sector instead of diesel and gasoline.

Is oil still a good investment?

You’re going to see some dramatic changes in terms of natural gas taking a much more important position compared to oil. The U.S. shale gas developments are going to drive that change.

Not in Norway?

Not in Norway, because Norway is very obsessed with oil and I don’t think they have opened up their eyes yet to developments in shale gas.

But that’s not stopping your companies from continuing to be involved?

We are very much involved because we make these composite storage systems for natural gas. If you’re going to have a natural gas vehicle, you would need a system like we supply.

We are definitely taking advantage of this development. I just don’t think Norway as a country has seen this trend that is taking place.

What would you suggest as an overseas investment?

You should watch for the changes that natural gas and the low-cost shale gas from the U.S. will have on different industries and markets. There is great potential within that sector. This poses a threat to a number of other industries like oil, because the oil industry is today working at a very high cost level, especially in Norway. New fields will require a break-even price of maybe $80 per barrel. At the same time, the cost of shale gas in the U.S. is about $20 to $30 if you convert with the same energy content.

So this makes a huge difference, and if the price of oil then goes down, production activity within the oil sector will go down too.•