Norwegian industrial group Elkem is rolling out a sweeping restructuring plan aimed at strengthening its financial resilience and sharpening its competitive edge following the sale of a majority stake in its Silicones division.

 

The company will introduce a new corporate structure and implement deep cost-cutting measures expected to generate NOK 1.3 billion in cash optimisation, alongside permanent annual cost reductions of NOK 0.6 billion starting in the third quarter of 2026. The moves come as Elkem navigates a challenging global market marked by weak demand and persistent pricing pressure.

 

The overhaul follows Elkem’s announcement on 13 February 2026 that it had agreed to sell a majority of its Silicones division to Bluestar, a move designed to reshape the company into a focused global metals and materials producer.

 

Under the new structure, Elkem will operate through three divisions: Elkem Silicon, Elkem Foundry Alloys, and Elkem Carbon.

 

Elkem Silicon, led by SVP Luiz Simão, will produce silicon, ferrosilicon, Silgrain silicon, Elkem Microsilica, and quartz. The division will operate eight main production sites across Norway, Iceland, and Spain, as well as a silicones production facility in France.

 

Elkem Foundry Alloys, headed by SVP Inge Grubben-Strømnes, will focus on supplying foundry alloys through seven production sites located in Norway, Canada, China, Paraguay, the United Kingdom, and India.

 

Elkem Carbon, led by SVP Izaias Entringer, will remain a global supplier of electrode paste and carbon products for metallurgical industries, with six main production facilities in Norway, Slovakia, Brazil, China, and South Africa. 

 

Elkem said its markets remain difficult, citing weak demand and ongoing pricing pressure. In the fourth quarter of 2025, Elkem excluding Silicones reported EBITDA of NOK 485 million, down from NOK 800 million in the same quarter a year earlier.

 

Geopolitical tensions are also adding uncertainty. The conflict in the Middle East is disrupting value chains for many of Elkem’s customers, the company said.

 

In response, Elkem has reduced production at several facilities and temporarily halted operations at its Rana and Salten plants in Norway. 

 

While the company expects conditions to improve gradually, it now anticipates the first half of 2026 will be weaker than previously forecast. At the same time, falling power prices in northern Norway will reduce the anticipated financial benefit from selling contracted electricity to the market.

 

As part of its restructuring, Elkem plans to reduce its global workforce by around 300 full-time positions by the end of 2026 — roughly 10% of its workforce after the Silicones divestment.

 

The cuts will begin immediately and will mainly affect roles linked to the sale of the Silicones business, as well as corporate and divisional support functions. Blue-collar roles are expected to be less affected.

 

Alongside the workforce reductions, Elkem aims to improve working capital and capital expenditure by NOK 1.3 billion while cutting salary and operational expenses by NOK 0.6 billion annually. About half of these savings are expected to be realised by the end of 2026.

 

The company estimates the total cash impact of the measures will reach NOK 1.6 billion in 2026. Capital investments for the year will be capped at NOK 1.0 billion.

 

"As we move forward following the sale of the majority of our Silicones division, Elkem is taking decisive steps to strengthen our competitiveness and ensure financial resilience. Our focus on cost reductions and efficiency is essential to secure Elkem's future as a robust, agile company capable of seizing new opportunities rapidly. 

 

"We believe these measures will position us to deliver long-term value for our customers, employees, and stakeholders once market conditions improve," said Elkem CEO Helge Aasen.

 

Elkem said it will work closely with employee representatives during the transition and stressed that the restructuring will be carried out with transparency and in line with the company’s values of respect and inclusion.