on may 14, 2020, elkem released its results announcement for the first quarter of 2020. although the market environment has been challenged by the covid-19 pandemic, the company produced satisfactory performance, reflecting its strong capability of operation and healthy financial conditions on the international market.
market prices remained stable in the first quarter, but declined in march, which is attributed to such a fact that the slow recovery of downstream silicone production led to an increase in inventories. however, silicone is widely applied in different terminal markets. currently, automobiles, construction and other industries are weak, while the demand for products from consumer markets and medical applications is growing steadily. these factors also bring uncertainties to the future silicone business.
prices of silicon materials and ferrosilicon alloys continued to rise in the first quarter, due to reduced supply and customer demand. carbon products remained in a steady supply. therefore, compared with the performance in the first quarter of 2019, that of silicon material and carbon divisions has improved.
in april, elkem completed its acquisition of guangdong polysil technology co., ltd., china’s leading manufacturer of silicone rubber and resin materials. the acquisition will empower elkem to become a more attractive supplier in the global food- and medical-grade silicone industry to consolidate its position in china’s special silicone field.
not only that, elkem also launched a global efficiency program to reduce personnel costs in the first quarter. starting from the end of 2021, it will achieve a cost improvement of over nok350 million per year.
the covid-19 pandemic is ravaging across the world this year. in a bid to coordinate the effective response of branches around the world, elkem urgently set up a task force to take a series of actions to maintain the stability of production and operation. at the beginning of the epidemic, elkem’s business in china was also affected but it returned to normal in march. elkem will actively look for business opportunities and do its utmost to make up for the epidemic-caused losses to sales and customers.
elkem ceo michael koenig said, “despite the constraints and disruptions that the covid-19 has brought to business operations as well as the challenging external market environment, elkem delivered its normal operating performance and consolidated its position as an industry leader by virtue of its low-cost strategy for enhanced competitiveness, diversified product mix, extensive geographical coverage and steady financial conditions compared with the previous quarter. our branches around the world do everything in their power to maintain elkem’s normal operation while putting health and safety first. in the future, we will stand ready to continuously seek opportunities to sharpen elkem’s competitive edge and continue our efforts in accordance with our long-term professional development strategy.”