Fiven Annual Report 2020

Fiven Annual Report 2020 Board of Directors’ Report About Fiven Fiven ASA was founded on February 5th 2019 and is the parent company in the Fiven Group with registered offices in Oslo, Norway. The Group is the result of an acquisition of the silicon carbide business from Compagnie de Saint-Gobain S.A in May 2019. The Group history can be traced back more than 100 years. Fiven is a global leader in silicon carbide (SiC), a material used in a variety of industrial applications. SiC is recognized for superior hardness, high thermal conductivity and chemical inertness, making it the preferred material for demanding applications: abrasive, metallurgy, filtration, technical ceramics and other uses. Fiven product brand “SIKA” is recognized as a premium brand with high quality and supply consistency. The Fiven Group is headquartered in Oslo (Norway). There are manufacturing entities in Arendal and Lillesand (Norway), Hody (Belgium), Barbacena (Brazil) and Puerto Ordaz (Venezuela). Fiven GmbH located in Cologne (Germany) is a management office. There are also sales representation offices in Pittsburgh (USA) and Shanghai (China). The Market In 2020, the corona virus pandemic had caused worldwide disruption and economic hardship. As most countries plunged into recession, Fiven experienced substantial demand slowdown and uncertainties linked to the unusual stress in key market economies. However, and despite challenging macro-economic conditions, sales of specialty products grew by 2.9 per cent. The global market for silicon carbide is diversified, and trends differ between regions and end-markets. In Europe, the specialty market segment was less impacted by the pandemic. Still, the strong downward trend in the construction and the automotive markets strongly affected the demand for metal- lurgy, refractory, and abrasives products. As a consequence of this, Fiven revenues from standard products were reduced by 24.5 per cent year on year. In North America, Fiven had a clear upturn in sales of specialty products driven by ongoing co-development projects. In Latin America, Fiven faced that Silicon Carbide was partly replaced by other raw material in the steel- and construction market due to lower prices, devaluation of the Brazilian Real, and a strong pandemic-caused market decline. The worldwide competitive landscape is diversified and intense. Fiven has a strong market position in Europe and Latin America, and face robust local competition in North America, Europe, and Latin America, and global competition from Asian silicon carbide producers. Fiven’s Strategy Fiven’s strategy remains in place: to grow profitably based on two pillars. 1. Accelerate growth in specialty products by targeting applications with high growth dynamics and focusing on innovation and co-development with key customers. 2. Selectively serving core markets, improving the cost com- petitiveness, and through providing a high level of service offerings. Organic growth will be driven through R&D and should be achieved by the development of new products and applica- tions. Fiven is also looking to grow through M&A where there is a good fit with Fiven and where there are possible synergies. Fiven will also look to optimize its supply chain further to secure a steady supply of crude by careful risk management and constant search for synergies. In the coming years, Fiven will increase efforts to meet envi- ronmental demands to ensure that the Group remains on good terms with the citizens in the locations in which the company operates. 16   Board of Directors’ Report