Norwegian ferro-alloy and silicon producer Elkem has launched a review of its silicones division with the target of streamlining the business in a challenging market environment, and to reallocate capital to its silicon products and carbon solutions divisions.
Elkem is an integrated producer in the silicones industry, ranging from silicon metal to upstream siloxane to downstream silicone specialities, but overcapacities in China and weak consumer markets present a challenging environment in which to operate.
Elkem operates nine silicone production sites across Europe, Asia, the US and Brazil with key sites in France and China.
The company invested 4.4bn Norwegian kroner ($390mn) across it Chinese and French operations to raise overall capacity by 140,000 t/yr in 2024. The improvements in China were completed in May last year, while the project in France was scheduled for completion in the fourth quarter.
The silicones division reported earnings before interest, taxes, depreciation and amortisation of NKr145mn in January-September 2024, rising from a loss of NKr672mn in 2023. The recovery was attributed to operational efficiencies and utilisation, higher volumes and the ramp-up of new capacity.
Elkem has appointed Norwegian bank ABG Sundal Collier to advise.
Details on the timeline of the review were not disclosed. Elkem is due to report fourth-quarter results on 12 February.
