Orkla Materials comprises the companies Elkem and Borregaard. Elkem is one of the world's leading companies in the environment-friendly manufacture of metals and materials. Its main products are aluminium, energy, silicon metal, special ferrosilicon alloys for the casting industry, carbon and microsilica. Elkem has also invested heavily in the solar industry. The company has manufacturing facilities in Europe, North and South America, Africa and Asia, as well as a comprehensive network of sales offices and agents in the major markets.
Borregaard has one of the world's most advanced biorefineries and is a leading manufacturer of biochemicals based on renewable raw materials. The company also holds attractive positions in ingredients, fine chemicals and energy, and has factories and sales offices in more than 20 countries. In 2007, a resource centre was established to promote the further technological and commercial development of the biorefinery concept. The centre will focus on exploiting opportunities in the growing market for fuel, chemicals and materials based on renewable biomass instead of petroleum-based ingredients.
More about Elkem
Elkem's operating revenues totalled NOK 10,293 million in 2007, compared with NOK 9,180 million in 2006. The market prices for silicon-related products picked up during the year. Primary Aluminium realized somewhat higher prices on the market, but the effect was neutralised by a weaker USD against the NOK. The energy business saw a decline in operating revenues as a result of lower power prices than in 2006.
EBITA was NOK 1,363 million, compared with NOK 1,438 million in 2006. Silicon-related activities experienced a favourable profit trend as a result of robust markets. The aluminium business reported a weaker result due to trends in exchange rates and raw material prices. Energy delivered a satisfactory result.
Elkem Solar's construction project and the establishment of a new operational organisation in Kristiansand progressed briskly in 2007. At the same time work continued on construction of the hydropower plant in Sauda, and on relocation of production of processed ferrosilicon from Bjølvefossen to Iceland. The anode factory at Mosjøen was completed in the latter half of the year.
Primary Aluminium
Primary Aluminium consists of aluminium production at the works in Mosjøen and Lista, and anode production at Mosjøen. Elkem Aluminium is organised as a partnership with the US aluminium manufacturer Alcoa; Elkem owns 50 % of the aluminium plants and 18 % of the anode factory.
Primary Aluminium reported a weaker result than in 2006. The reduction is ascribable to higher raw material prices and a weaker USD against the NOK. At year end, Elkem had forward sales of 361,000 metric tonnes of aluminium, covering the period 2008 to 2011, at an average price of USD 1,959 per metric tonne. Volumes delivered to customers totalled 318,000 metric tonnes, a decline of 4,000 metric tonnes from 2006.
Energy
Energy activities consist of hydropower production and power trading. Elkem's Norwegian hydropower plants are located in Salten, Bremanger and Sauda.
Energy posted a satisfactory result in 2007. Energy production totalled 3,205 GWh, an increase of 403 GWh from 2006 due to heavy precipitation. Power plant reservoir levels were considerably higher than normal at the end of 2007. The trading result was satisfactory, although slightly weaker than the very strong result in 2006.
Silicon-related
The silicon-related business comprises solar, silicon metal, foundry products, microsilica, carbon and calcium carbide. The solar business consists of Elkem's own project for manufacturing silicon metal for the solar cell industry. In the silicon metal segment, the recently restructured production base after being restructured now consists of three smelting plants in Norway. Elkem's foundry products are currently produced in Norway, Iceland, Canada and China. The microsilica business consists of the purchase and sale of materials mainly filtered from tapping fumes from smelting plants. In 2007, production for the carbon business took place in Kristiansand (Norway), at two plants in Brazil, one in South Africa, and one in China. Calcium carbide is manufactured at a plant in Oklahoma (USA).
The silicon-related units reported significantly better EBITA than in 2006. Market prices for silicon and ferrosilicon metals improved substantially during 2007 due to strong demand, higher production costs, and more restrictions on Chinese manufacturers. Carbon production increased somewhat, and the microsilica business built up its operations in China.
Elkem Solar is building a factory for the production of solar-grade silicon at Elkem Fiskaa in Kristiansand. This solar investment is based on new, environment-friendly process technology and the plant will begin supplying metal to the market towards the end of 2008.
More about Borregaard
Borregaard's operating revenues in 2007 totalled NOK 4,637 million, an underlying1 growth of 1 %. EBITA was NOK 369 million, up from NOK 366 million in 2006. The chemicals business reported a substantial profit improvement. Good market conditions led by strong demand and higher prices were to some extent offset by unfavourable currency exchange rates and higher prices for timber and energy. As expected, Energy experienced a decline.
A new facility in Ålesund for Omega-3 products neared completion and an upgrade initiated at the Borregaard Power Plant will boost energy production. A NOK 280 million investment programme was concluded. The programme will result in substantial energy savings and ensure compliance with the environmental standards in the new licence for the Sarpsborg facility.
Chemicals
Borregaard LignoTech, the world's leading supplier of lignin-based binding and dispersing agents, posted a markedly better profit than in 2006, primarily due to higher prices and a better product mix. This more than offset higher raw material and energy prices and a weaker USD. There was brisk demand, especially from the construction industry in Europe and the Middle East, and from time to time scarcity of raw materials. New products reported stronger sales and profit performance.
Borregaard ChemCell is Europe's leading supplier of speciality cellulose for chemical applications. The improved performance in 2007 was ascribable to price increases, a better product mix and more stable production in Switzerland. Bio-ethanol continued to provide a good contribution to profit.
Borregaard's Ingredients & Pharma business supplies advanced products that meet high quality and hygiene standards. Overall, the area reported a weaker result. Aroma products, yeast and Omega-3 oils had a good market trend, but rising costs put a damper on profitability. The Fine Chemicals business reported a decline in profits.
Energy
Borregaard Energy's activities consist of the production and supply of power and trading on the Nordic power market. The weaker performance in 2007 is ascribable to reductions in the availability of power as a result of the agreed gradual reduction in contract volume under the DNN agreement, combined with lower market prices. Borregaard's own production volumes were somewhat higher than in 2006, while the contribution from financial power trading declined.
Borregaard |
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PRODUCTS AND APPLICATIONS
Speciality Chemicals
Lignin: Additives for use in concrete, textile dyestuffs, ceramics, agricultural chemicals, batteries and oil drilling. Binding agents for animal feed, briquetting and dust mitigation on gravel roads.
Speciality cellulose: Speciality cellulose for products used in the construction and petroleum industries and in the manufacture of food products, tablets, cosmetics, filters and personal hygiene products, as well as paint, varnish, printer’s ink, textiles and plastics. Bio-ethanol is used for instance for technical applications in the pharmaceutical industry, paint, varnish and car care products.
Ingredients & Pharma
Ingredients: Vanillin products, Omega-3 oils and yeast products for use in food products and selected animal feed products.
Pharmaceutical products: Intermediates for X-ray contrast media (diagnostic applications) and medicines.
Diphenols: Intermediates for aroma chemicals, agricultural chemicals, photo chemicals and pharmaceutical products and applications.
Energy
Electric power: Power production and financial trading of power contracts. |
Elkem |
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PRODUCTS AND APPLICATIONS
Primary aluminium
Rolling ingots for the packaging and transport industries, extrusion billets for the construction and transport industries and foundry alloys for foundries that cast rims and other components for the automotive industry.
Energy
A major power producer in Norway and one of the main players on the Nordic power market.
Silicon-related
Solar: Elkem Solar will manufacture high-grade silicon metal for the solar cell industry.
Silicon: Production of metals used by the chemical industry to produce silicones, by the electronics industry as a basis for the manufacture of semiconductors, and by the aluminium industry as an alloying metal.
Foundry: Production of special materials for the foundry sector. The main customer groups are the automotive industry, pipe manufacturers and other mechanical engineering industries.
Microsilica: Used as an additive in concrete, structural and refractory materials, for drilling in the petroleum industry and for sealing tunnels.
Carbon: Production of electrically calcinated anthracite and Søderberg electrode paste for use in metallurgical processing and other industries.
Calcium carbide: Used in the industrial gas, iron and steel industries. |