Elkem, Norwegian supplier of silicones, silicon and carbon based material, has released that it has accept to sell the majority of its silicones division to its largest stakeholder, China’s Bluestar, and that the Chinese corporation might end to be a shareholder in the Norwegian group following the transaction.
In return for assuming over on the silicones unit, Bluestar will cancel all its 338.3-million stocks in Elkem, corresponding to 52.9% of the group’s capital, estimated at 9.77-bn Norwegian crowns ($1.02-bn) at February 11’s final share price.
“By selling the majority of the Silicones division, we’re clarifying our business, refining our strategic target and allocating capital wherein we see sturdy long-term growth opportunities,” Elkem’s CEO Mr. Helge Aasen stated in a press statement.
As Elkem’s largest shareholder and former owner of parts of the silicones assets, Bluestar possesses deep knowledge of Elkem’s silicones division and is strategically targeted on growing its role within the silicones value chain, Elkem stated within the statement.
The silicones entities being retained Elkem and no longer included within the deal are Yongdeng (silicon metal in China), Roussillon (upstream silicones in France) and Chakan (downstream silicones in India). For Roussillon, Elkem has entered right into a 5-yr supply agreement of upstream silicones to the downstream business to be obtained by Bluestar, as well as to a third party, making sure economically viable operations that can be expected to be earnings neutral. For the other retained silicones assets, strategic options are being explored.
“Following the transaction, Elkem will be a targeted metals and materials manufacturer. This permits us to pursue tailored techniques aligned with our divisions’ particular strengths and respective market dynamics. We will retain to prioritize development by our R&D centres worldwide, to satisfy the demands stemming from heightened target on supply chain security for crucial materials,” stated Mr. Aasen.
Output reduction at two plants
In an prior development, Elkem, introduced that it’s far temporarily curtailing manufacturing at its plants in Rana and Salten in Norway.
The corporation attributed the action to “a tough market environment, high inventory levels and high power prices” and introduced that the move could result in temporary layoffs of employees.
As of 13 February, the three furnaces at Salten and the two at Rana will all be shut down, the corporation stated.
The core product at Rana is ferrosilicon, that is a important raw material for the steel industry, while Salten particularly produces silicon, utilized in a wide variety of products and applications starting from ceramics to batteries and aluminium alloying.
