Net sales totalled EUR 220 million
In business relationships, 2017 was a year of significant development. Net sales more than doubled from the previous year. Procurement was enhanced by longer and more comprehensive partner agreements.
Terrafame began building a strong customer base as early as 2015, and in 2017 this work was continued by the Trafigura Group, which became Terrafame’s new partner in February. Terrafame was thus able to utilise Trafigura’s extensive market knowledge.
In accordance with the agreement between the companies, most of the production of nickel-cobalt sulphide and zinc sulphide in 2017 was delivered to end customers through Trafigura’s resale network.
Significant growth in sales volumes
The sales volumes of Terrafame’s metal sulphide products grew from quarter to quarter in 2017, following the growth in production volumes. Compared to the previous year, net sales more than doubled. The company’s profitability also improved throughout the year in accordance with the targets.
The global market prices of metals developed positively on the whole. The price of zinc continued to increase in 2017, and the development in the price of nickel was positive in the second half of the year. The combined stock levels of London Metal Exchange and Shanghai Futures Exchange dropped globally in both nickel and zinc during the year. However, the value of the US dollar, commonly used in the global trade of metals, weakened against the euro.
Closer to end customers and consumers
Since the start of its operations, Terrafame has conducted research into the further processing options of the nickel-cobalt sulphide product. By processing nickel-cobalt sulphide more than today, the value and revenue of the product would increase.
One of the options studied during the year was the possibility of processing nickel precipitate into nickel oxide by roasting, which would be suitable as a raw material for stainless steel, globally. The production of battery chemicals used in electric vehicles was identified as an even more interesting option. In November, Terrafame announced that it was preparing an investment in a battery chemical plant.
In commercial operations, the design of further processing required, for example, arrangements for plant-scale test runs, as well as the identification of sales opportunities for new kinds of products. In addition to end customer segments, the monitoring of consumer markets was strengthened at Terrafame, especially based on studies concerning the growing popularity of electric vehicles.
Terrafame filed a licence application for uranium recovery with the Finnish Government at the end of October. The applications for sales-related licences with the European Atomic Energy Community (Euratom) and the Ministry for Foreign Affairs of Finland will become relevant later.
Partners were engaged in joint development work
The transition from the ramp-up phase towards stabilised industrial activity was also visible in procurement. New, extensive contracts were concluded during the year to organise, for example, industrial cleaning, waste management, storage and production supplies. The cooperation with import and export ports was developed to streamline logistics and increase the security of supply.
Terrafame wants to engage the companies selected as partners in the continuous improvement of operations and the support of business growth. This means that partner companies will be audited regularly and concrete development targets will be set for cooperation.
Electronic tools enhance procurement
The utilisation of electronic tools as part of the procurement process was expanded during 2017. Companies striving to become partners can now register in Terrafame’s electronic procurement system by entering basic information on their operations, which is used as a basis for assessing the possibility of them succeeding in the cooperation.
Also, the submission of requests for offer and the reception of offers was initiated in early summer from electronically pre-registered partners, based on their competencies. Additionally, the first online auction was held in the summer. Electronic tools can correspondingly be utilised, for example, in the sale of waste fractions.
On the whole, electronic tools enhance operations, both at Terrafame and in its partner companies. Duplicate and repetitive work can be reduced when basic company information as well as the requests for offer and the submitted offers can be found in the same format in the same location. Good ground work and systematic information management clearly emerge as important factors, and time is freed up for cooperation development.
Terrafame grew into an even more significant export company in 2017. Net sales increased to EUR 220 million.