We are proud of our history. Elkem Iceland (former Icelandic Alloys ltd.) was established on April 28th 1975 and operation started in 1979 at Grundartangi.
Plant history and ownership
Initially the company was called Icelandic Alloys hf., founded on April 28th 1975 by the Icelandic Government in cooperation with the company Union Carbide in the United States. Just over a year after the company was founded, Union Carbide withdrew from the partnership and was replaced by Norwegian major Elkem company. Elkem owned a 45% share against a 55% share in the state. In 1984, Sumitomo Corporation bought Japan a 15% share in Járnblendifélagið from Elkem, but by 1997 Elkem had become a majority shareholder in the company. Several changes were made to its holding in the following years and for a time the company was listed on the Icelandic stock market. Elkem acquired the company in full in 2003. In 2008 the name of the company was changed to Elkem Iceland ehf.
Plant and production
The Railway Company's plant was initially drawn with four furnaces to be built in two phases. The first phase began in 1977 with the construction of two furnaces, with the first being brought into use in 1979 and the second a year later. The combined production capacity of the two kilns was approximately 60 thousand tons of 75% silicon iron per year, but was later increased to 72 thousand tons.
In the first few months after the plant began operations, the silicon iron market was strong, but the deficit subsided when the second oil crisis hit in 1979. The price of steel fell, causing the company to operate at a loss up until 1984. Due to this, plans for the expansion of the plant were put on the shelf for now. The company's operations therefore suffered because the size of the plant was limited and therefore on the verge of being considered an economical and competitive operating unit. The company's operations were restructured in 1992 and 1993 for this reason, and also in response to the difficult world market conditions that were faced in the wake of the collapse of the Soviet Union. Following restructuring, the company turned a profit in 1993. Profit came from operations over the next five years, and the Company's equity grew rapidly during this period.
Elkem acquired a majority share in the company in 1997 following agreements between the owner related to the enlargement of the plant and the need for financing this investment. The enlargement of the factory was formally approved by the company's Board of Directors on 19 March 1998 and construction began immediately thereafter. The third furnace was opened in autumn 1999.
In April 1998, the Icelandic sold a 26.5% share in the company after an auction. Icelandic Járnblendifélagið hf. was listed on the Main List of the Icelandic Securities Exchange on 18 May 1998. The price of iron silicon fell sharply in the latter half of 1997 and further in the following years. The company's operations suffered losses in 1999 and for the next two years, affecting equity position and thereby the terms of long-term loans. The company's share capital was increased by an offer to shareholders in 2000, but Elkem underwrote the offering. After that, Elkem had a larger share in the company. In November 2001 the company's share capital was written down, followed by an offer of increased share capital. Elkem also underwrote this offering and subsequently owned a 72.59% share in the company. In December 2002, Elkem purchased a 10.49% share in the state and made an offer to other shareholders to buy their shares. In March 2003, Icelandic Alloys was delisted from the Main List of the Icelandic Stock Exchange, by which time Elkem had acquired over 90% of the share. Elkem bought shares in other shareholders later that year and has been the owner of the company in full since 2003.
For a long time, Icelandic Alloys produced almost exclusively standard or conventional silicon iron, which is blended in ratios of 25% iron and 75% silicon metal. In 1997, the proportion of non-traditional silicon iron products was about 7%. By manufacturing silicon iron with lower content of additives such as aluminum, carbon and titanium, the company has continuously increased the value of the products.
The Board of Elkem approved on 13 October 2006 the construction of a new FSM production unit for further processing of liquid silicon iron. The investment was estimated at NOK 270 million (Norwegian kroner). FSM is a silicon iron mixed with magnesium and other substances, written MgFeSi. FSM is English abbreviation for the elements ferro, silicon and magnesium. Operations of the FSM unit commenced in 2008.
In early 2012, production of magnesium silicon iron (FSM) was largely discontinued at Elkem in Iceland. But after all, the factory was operating at full capacity with the production of other products.