Bluestar clout earns new partnership

After joining China National Bluestar (Group), silicon and silicones maker Elkem has embraced new growth opportunities as it shares its technology prowess and management expertise with its Chinese partners.

Since the acquisition by Bluestar, a subsidiary of China National Chemical Corp, or ChemChina, in 2011, Elkem has doubled in size.

Elkem's strategy is to strengthen its market positions, both geographically and in all business segments, which is one of the key factors for the company's success, said its CEO Helge Aasen.

Founded in 1904, the century-old Norwegian company now has an integrated value chain from quartz up to its highly specialized silicones products. It has taken a rising position in silicones and specialized foundry alloys.

The growth is also partially due to support from its parent company with which it had the foresight to forge a partnership six years ago.

Back in 2011, bidding against other multinational companies, ChemChina Chairman Ren Jianxin invited Elkem's management to Bluestar for inspection. Bluestar's competitiveness in the sector and its huge growth potential impressed Elkem's executives and thus prompted the acquisition deal, which has since put the Scandinavian company on the fast track to development.

Bluestar poured $100 million of aid into Elkem for its research and development of new products in 2013. The Chinese chemical giant invested another $200 million in helping to improve solar-grade silicon production in 2014, which enabled the company's annual output to increase from the previous 6,000 metric tons to 8,000 tons while reducing cost from $30 per kilogram to less than $10.

After taking over Norwegian solar panel manufacturer REC in May 2015, Elkem now manages two other divisions of Bluestar - the Jiangxi Xinghuo Organic Silicone Plant and Lanzhou Bluestar Silicon Material Co - to provide high-quality silicon and silicone products.

"After combining our efforts with Bluestar Silicones, we now have an integrated value chain from quartz to silicones and are pursuing a product specialization strategy," Aasen said.

"We believe that this strategy will make Elkem well positioned to benefit from major trends, which will influence the global economy in the years to come," he said.

The company tries to ensure synergy by implementing the Elkem Business System, which forms the foundation of Elkem's corporate culture and is a set of fundamental principles describing how employees work to achieve common goals and continuous improvement, he added.

The Elkem business system and other mature management mechanisms have been introduced to other sections of Bluestar, which helped to replace rule-of-thumb decisions with data-based judgments. One of the exemplary cases is the Lanzhou company, where the rate of qualified products has jumped from 50 percent to 97 percent.

"In terms of investor relations, Bluestar is the boss, yet when it comes to management, you're our teachers," said Ren, who also serves as the chairman of the board of directors at Bluestar.

Gunnar Allnor, one of Elkem's Norwegian technological experts, close to 70 years old, made seven visits to the Lanzhou company in Gansu province throughout the last 18 months of his career to help improve its technology and management. Due to his training, the Lanzhou facility's production efficiency has improved. Even after his retirement, the technological staff from Elkem and the Lanzhou company have held regular video meetings to explore technical solutions.

Bluestar approved the relocation of a casting plant in the Ningxia Hui autonomous region in 2016. Relocation of the plant is expected to cost 70 million yuan ($10.15 million) and will expand its annual production capacity from 10,000 tons to 30,000 tons.

Chinese-made special-purpose casting sales are forecast to account for 40 percent of the total used in Elkem facilities worldwide by 2022.

Under the leadership of Bluestar, Elkem is sure to achieve its sustainable growth via technological innovation and continuous improvements, Aasen said. "Our enhanced cooperation with various stakeholders is contributing to environmental protection and will create a sustainable, prosperous future."

zhuanti@chinadaily.com.cn