Detailed examination of Elkem’s carbon division

There was a great deal of interest in Elkem’s carbon division.

Elkem’s Carbon division is a supplier of Søderberg electrode paste, lining materials and speciality carbon products such as pre-baked electrodes and other carbon based products for metallurgical processes, primary aluminum and base metals, all of which Elkem defines as a group of similar products.

The division had a total combined operating income of NOK1,576.7-million (2016: NOK1,375.1million) or 7% of the Group’s total combined operating income, and an operating profit NOK208.9-million (2016: NOK219.6-million).

The carbon division is a global leading supplier of Søderberg electrode paste. It has an annual production capacity of approximately 260,000 mt of Søderberg electrode paste and approximately 105,000 mt of other carbon products.

The carbon division generated 7% of Elkem’s combined total operating income in 2017.

The operating units are:

Elkem Fiskaa, Norway

The Elkem Fiskaa plant produces Søderberg electrode paste, ELSEAL® ramming paste, furnace lining materials (tamping paste), tap hole repair materials and ELGRAPH® recarburisers. The total annual capacity is approximately 126,000 mt.

Elkem Shizuishan Carbon, China

The Elkem Shizuishan Carbon plant produces Søderberg electrode paste, furnace lining materials (tamping paste), tap hole repair materials and ELSEALTM ramming paste. The annual production capacity is approximately 70,000 mt of Søderberg electrode paste and other carbon products. The plant is located together with the Foundry Products division’s plant in Shizuishan.

Elkem Ferroveld JV, South Africa

The Elkem Ferroveld JV plant, which is a joint venture between Elkem Carbon AS and Samancor Chrome, produces Søderberg electrode paste and has a total annual production capacity of approximately 60,000 mt, of which 50%, 29,000 mt, is Elkem’s share.

Elkem Carboindustrial, Brazil

The Elkem Carboindustrial plant produces pre-baked carbon electrodes, Søderberg electrode paste and ramming/tamping paste. The annual production capacity of the plant is approximately 60,000 mt of Søderberg electrode paste and 10,000 mt of other carbon products. The plant employed 104 employees as of 31 December 2017.

Elkem Carboderivados, Brazil

The Elkem Carboderivados plant is located in the same area as Elkem Carboindustrial in the state of Espirito Santo, Brazil. The plant is the Carbon division’s coal tar distillation facility for the production and processing of pitches, oils and blends. It has an annual total production capacity of approximately 60,000 tonnes of distilled coal tar products.

Elkem Sarawak, Malaysia

The Elkem Sarawak plant manufactures Søderberg electrode paste. The plant has an annual production capacity of 28,500 mt. The plant is a mixing plant that receives electro-calcined anthracite from the other Elkem Carbon plants and mix this with coal tar pitch in order to produce Söderberg electrode paste.

In 2017, 13.6% of the sales of Elkem Carbon were within the Group. The Carbon division’s external operating income by geography for 2017 was: Americas (43%), Europe (19%), Asia (27%), Africa (9%) and the rest of the world (3%).

The Carbon division’s input factors as percentage of recipe costs (energy and raw materials) are as follows: Anthracite/coke (50 – 55%), coal tar (30 – 35%) and energy (10 – 20%).

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