OSLO, Norway—Elkem ASA is taking a close look at its flourishing Elkem Silicones business unit, initiating a strategic review of the segment in an effort to optimize its wider business plan.
The review comes as a follow-up to the company's "thorough assessment" of its growth and return prospects, officials said. Elkem officials hope to streamline the company's silicone business unit and overall process via the review, as well as grow the footprint of the business unit for 2025 and beyond.
"The review is initiated with a target to streamline Elkem, as well as to enable allocation of capital to accelerate growth in the silicon products and carbon solutions divisions," Elkem said Jan. 23. "The decision by the company to initiate the strategic review follows a thorough assessment of the growth and return prospects of Elkem, as well as its capital allocation strategy and the market dynamics in the silicones business."
Elkem also manufactures several upstream products, including the refinement of silicon metal and siloxane monomer.
The business unit improved in 2024, echoing a silicone industry trend. Elkem Silicones reported close to $12.9 million in year-to-date EBITDA in Sept. 2024, an improvement over the $59.6 million loss in 2023's corresponding period.
Elkem said that the unit's EBITDA improvement largely is due to operational efficiencies, higher production volumes and a ramp-up of new manufacturing capacity. The company hopes to continue its upward trend in 2025 following the strategic review process.
"The silicones products have multiple application areas and exposure to several growing end-markets," the company said, "and Elkem's division has a global production footprint with key sites in France and China with exposure both to the upstream and downstream specialty markets."
