Norwegian industrial concern Orkla confirmed on Monday that it’s in negotiations to sell the silicon-related operations of its metals company Elkem to China National Bluestar. Elkem employees quickly expressed concerns over potential job losses.
Orkla’s brief statement followed a story in Norway’s leading business newspaper Dagens Næringsliv (DN) on Monday, which reported that China National Bluestar and Orkla had agreed on a takeover of Elkem. Orkla noted that the pending sale to the large Chinese unit of state-owned giant ChinaChem does not include the shares in Elkem Energi AS. It does include Elkem Solar.
The sale will, however, amount to most of what’s left of Elkem after it sold its aluminium operations to Alcoa. Elkem’s main products now are solar grade silicon, special alloys for the foundry industry, silicon, carbon, microsilica and energy. DN reported that analysts have valued the company at as high as NOK 15 billion, but no pending sales price has been revealed.
Elkem, founded by industrialist Sam Eyde in 1904, has been wholly owned by Orkla since 2005. It currently has production facilities in Europe, North and South America, Africa and Asia and employs around 2,500. Operating revenues in 2009 amounted to NOK 7.4 billion (USD 1.23 billion).
China National Bluestar, by comparison, employs more than 40,000 persons outside China alone and can boast revenues of nearly NOK 40 billion a year. It’s recently been taking over European companies including Rhodia and Adisseo of France. In both of those deals, DN reported, local French management has largely been retained as have the companies’ research and development ventures.
That would seem to bode well for Elkem but some union representatives told Norwegian Broadcasting (NRK) that they feared new Chinese owners would pare jobs and make other changes. Their fears may be unfounded: Orkla’s leadership managed to find a buyer for the vast majority of Elkem that seems genuinely interested in maintaining Elkem’s solar operations intact along with its research and development activities, reports DN.
The Orkla-China National Bluestar deal comes after months of rocky relations between Norway and China, which was furious over the awarding of the Nobel Peace Prize to Chinese dissident Liu Xiaobo. Negotiations over a bilateral trade agreement between China and Norway have been suspended.
DN reported that announcement of the sale of Elkem was delayed because of the fuss over the Peace Prize but now it’s ready to move forward. Orkla said Monday it would “make a further announcement as and when appropriate,” while DN reported that Orkla’s biggest shareholder, Stein Erik Hagen, has advised