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Q&A with Elkem’s CEO on the coronavirus situation

The world is experiencing a global health crisis and an emerging global economic crisis. Societies and companies face unprecedented challenges as they are trying to deal with the situation. Elkem is addressing three issues at the same time: Putting health and safety first, while keeping the wheels turning and also contributing to society. We spoke with Elkem’s CEO Michael Koenig for five Q&As on the company’s response to the coronavirus situation.

1: How is the coronavirus impacting health and safety in Elkem?
“With more than 3000 employees in China, Elkem was exposed early to the potential spread of this disease. However, it was an employee at our head office in Oslo, Norway, who was our first confirmed case, after returning from a holiday. This led to the previously announced temporary closure of the head office on 6 March. So far, Elkem has had only a small number of confirmed infections in Norway and Iceland. I am pleased that the affected colleagues have light symptoms and are doing well.”

“Elkem has established a corporate task force to coordinate our coronavirus response worldwide. Our focus remains the health and safety of our people, in line with Elkem’s zero-harm philosophy. We counter the outbreak on several fronts, taking pre-emptive action, from heightened standards of hygiene and increased distance between workers to encouraging home office where appropriate. In addition, we have implemented a global ban on international travel in affected areas. We of course also comply with the government measures in each country where we are present.”

2: How is the coronavirus impacting Elkem’s production and sales?
“Elkem’s production so far continues mainly in line with normal capacity. In China, where we experienced a delayed start-up after Chinese New Year due to the coronavirus, production is now back to normal levels. We are facing some disruptions in other countries, but those do not significantly impact Elkem’s total production. Our largest plants are in China, Norway and France.”

“We still experience good demand for Elkem’s products but see large and increasing uncertainty in our customers’ markets. Logistics also remains a challenge across the world. Our global footprint provides some natural hedging, with China being our largest single market. However, we also have to be prepared for reductions in demand and potential shutdowns if this situation continues. We closely follow political developments in all key markets regarding new coronavirus-related restrictions or potential reopenings.”

“Elkem also continues to implement the new global productivity improvement programme to improve our cost position and streamline the organisation, as started already before the coronavirus situation. Our financial position remains solid, with good liquidity and a strong capital structure.”

3: How is Elkem contributing to solving the coronavirus situation?
“We can take pride in knowing that Elkem’s products are key enablers for a healthy and sustainable future: Silicones are key for several medical applications which hospitals now depend on, and silicon materials are key in the computers and mobile phones we all rely on for our digital communications, to name a few examples. Keeping up production is therefore one of the best contributions we can make. Elkem’s operations also make significant contributions to society throughout the value chain.”

“This situation also gives us a unique chance to contribute directly: To support the global response, Elkem is establishing a KN95 silicone mask production line in China, utilising the advantages of silicone raw materials and internal resources. This production line is being built at Elkem Xinghuo and the ambition of the project is to realize an annual production capacity of several million masks. This is just one example of how the Elkem family mobilizes in this very special situation.”


4: How is the coronavirus situation affecting your work as Elkem’s CEO?
“Back in March, I was interviewed by a newspaper while working from home after the temporary closure of our head office. At that time, home office was rather unusual for a CEO. Now, in April, this is business as usual. Our experience confirms that we have been well prepared in Elkem, with good infrastructure and already-existing processes for working digitally. Nothing can replace human contact, but with good leadership and digital tools, we are able to keep the wheels turning.”

“That said, I am even more impressed by the dedication of our colleagues with jobs that cannot be done digitally, i.e. at our production facilities. By continuing to come to work at our plants, while keeping within Elkem’s heightened hygiene standards as well as the government recommendations, they are demonstrating true loyalty and dedication to the company. These are our true heroes.”

5: How does the coronavirus impact your long-term view of Elkem and the industry?
“It is too early at this stage to be conclusive – the only thing we can truly be certain about is how little we know. Since Elkem was founded in 1904, we have experienced many large changes, positive and negative. Elkem’s official history, prepared for our anniversary in 2004, described the first 100 years as ‘a century of initiative, determination and success, as well as disappointment and even despair’! This teaches us to see through ups and downs, even when they can feel overwhelming.”

“Fundamentally, the world’s ability to solve the health crisis will likely determine the severity and duration of the economic crisis. But there will come a stage after the pandemic, where focus turns to rebuilding societies and build the post-coronavirus economy, better and more sustainable for all.”

“I believe that long-term megatrends – like sustainability, energy demand, urbanisation, increased standard of living, ageing and growing population, and digitalisation – will continue in one form or another. This will drive growth in demand for advanced materials from Elkem, including silicon, silicones and carbon solutions. So we still see good opportunities ahead – as long as we stay true to our vision: Advanced materials shaping the future, adding value to our stakeholders globally.”
 

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