Silicones firm Elkem ASA says it is further strengthening the company’s competitiveness and financial resilience by introducing a new corporate structure and reducing working capital and annual costs following the approval of the announced Silicones transaction.
Elkem will reduce its global workforce by approximately 300 by year-end 2026, which represents approximately 10% of the total work force after the sale of the majority of the Silicones division. This process will begin immediately and will primarily affect functions directly impacted by sale of Silicones, as well as support functions at corporate and division levels. Blue collar positions will to a lesser extent be affected.
The cash optimising measures amount to NOK1.3 billion, in addition to permanent cost reductions with an annual effect of NOK0.6 billion starting from third quarter 2026. The cost reductions form a part of Elkem’s efforts to streamline operations and are aimed at enhancing profitability amid ongoing market challenges.
The cost reductions are also a result of the conflict in the Middle East that has added to the macro-economic uncertainty and is impacting the value chains for many of Elkem’s customers. Elkem has reduced production at several of its plants and temporarily curtailed all production at the Rana and Salten plants in Norway.
Elkem expects market conditions to gradually improve, however, the first half of 2026 will be weaker than previously expected and visibility for now remains less clear. Power prices in the Northern part of Norway have declined and the expected positive financial contribution from the sale of contracted power to the market will be lower than anticipated.
On 13 February 2026, Elkem announced the agreement to sell majority of the Silicones division to Bluestar to create a focused, globally-leading metals and materials producer. Following this transaction, Elkem is unveiling a new corporate structure, composed of three divisions: Elkem Silicon, Elkem Foundry Alloys and Elkem Carbon.
Elkem Silicon will be led by SVP Luiz Simão. The division will be a global producer and provider of silicon, ferrosilicon, Silgrainsilicon, Elkem Microsilica, and quartz, and will be composed of eight main production sites in Norway, Iceland, and Spain, including a silicones production site in France.
Elkem Foundry Alloys will be led by SVP Inge Grubben-Strømnes. The division will be a globally-leading provider of foundry alloys and composed of seven production sites in Norway, Canada, China, Paraguay, United Kingdom, and India.
Elkem Carbon will be led by SVP Izaias Entringer. The division is a world leading supplier of electrode paste and other carbon products to metallurgical industries, and will be composed of six main production sites in Norway, Slovakia, Brazil, China, and South Africa.
Elkem adds its markets remain challenging, with continued pricing pressures and weak demand. For the fourth quarter 2025, Elkem ex. Silicones reported an EBITDA of NOK485 million, compared to NOK800 million in the corresponding quarter of 2024.
In response to the adverse market conditions, Elkem is implementing significant cost-cutting measures as part of its reorganisation.
In addition, the company is targeting working capital and capital expenditure improvements totaling NOK 1.3 billion, alongside salary and operational expenditure cost reductions amounting to NOK0.6 billion, with approximately half of these savings expected to be realised by year-end 2026. The overall estimated cash impact for 2026 stands at NOK1.6 billion, while investments will be capped at a maximum of NOK 1.0 billion for the year.
“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.