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Review of Elementis
Since joining Elementis in October 2001, I have visited 17 Elementis
locations to speak to employees in each business and have been impressed
by the dedication and teamwork at all levels.
Elementis has strong market positions in its chosen areas of expertise,
a capable management team, a healthy balance sheet and a commitment
to excellence throughout its operations.
Immediate priorities
Managing the business in the tough global economic climate is clearly
the first priority. Focus continues on tightly controlling costs,
capital expenditure and working capital. Simultaneously, a growth
strategy is being initiated.
To drive Elementis forward, a new management team has been formed
consisting of executive directors, the leader of each business,
and heads of strategic functions, including the newly appointed
heads of corporate finance, human resources and information technology.
Members of the team have responsibility for driving growth through
the four key business processes: operational excellence, innovation,
customer focus and people development.
Strategic programmes addressing opportunities for step change financial
performance improvement have been initiated in each of the businesses.
Elementis Specialties is a world
leading producer of rheological additives and is the Group’s primary
focus for growth. To accelerate this, additional management resource
is now in place to develop and deliver a high growth strategy.
Elementis Chromium, the world’s largest
producer of chromium chemicals, has a competitive and well invested
manufacturing base in the UK and US and has scope to strengthen
its market position. The recent statement by the US Environmental
Protection Agency is expected to result in the phasing out of CCA
for some wood treatment applications. This could significantly impact
the business and will remain a high management priority.
Elementis Pigments has a strong market
position but reduced volumes, driven by the North American downturn,
have challenged the business’s ability to cover fixed costs. This
is being addressed on several fronts including a strategic review
of the Birtley, UK facility.
Investments in the Linatex continuous
rubber plant and continuous press in Malaysia, together with the
leading Linatex brand name, have given the Specialty Rubber division
a solid platform for growth. To enhance profitability, further step
change improvements in manufacturing structure are being sought.
A programme is under way to evaluate the potential of a Groupwide
Enterprise Resource Planning (ERP) system. The decision whether
to proceed will depend on the strength of the business case demonstrated
and on trading conditions and future outlook.
Refreshing the Elementis culture will underpin the growth strategy.
It will be achieved by transferring people and skills between the
businesses and creating more operationally focused central resources.
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