Steel is one of the world’s most important construction materials. From bridges to buildings, tools to transport, kitchen appliances to agricultural equipment – the strong and adaptable metal is everywhere and plays a prevalent role in our modern world.
With steel in such high demand, companies like Vargön Alloys have become a vital link in the supply chain. Based in Vargön, Sweden, the organisation is one of Europe’s biggest and oldest producers of ferrochrome, an essential material in the steel-making process.
Ferrochrome is an alloy of iron and chromium, produced by reducing chromite ore with carbon sources at high temperatures. The material is largely used in the production of stainless steel, but also plays a part in the manufacture of various other special steel types.
“High carbon ferrochrome gives steel its hardness and corrosion resistance,” explains Vargön’s Managing Director Anders Lehman. “At Vargön Alloys, high carbon ferrochrome is what we produce, with a composition that can be tailored to each customer’s specific requirements.”
Around two-thirds of Vargön’s ferrochrome is exported. Close to 75% of the company’s products end up in the European Union, but the business also has customers as far away as Japan. The remaining ferrochrome is sold into the Swedish market.
“We are the only ferrochrome producer in Sweden, so we collaborate closely with Swedish steel producers,” adds Annelie Papadopoulos, Vargön’s Manager of Process Metallurgy & Sustainability. “We are also one of only three ferrochrome producers in the EU.”
Vargön operates from a plant with four electric arc furnaces that can reach up to 3,000 degrees celsius. The biggest of these furnaces has a production capacity of 130,000 metric tons per year.
To support the world’s demand for steel, ferrochrome production at Vargön never stops, with furnaces running twenty-four hours a day, seven days a week. Part of the CoreX Holding, the company also enjoys its own supply of raw materials used in the creation of ferrochrome, including chromite and quartzite.
Vargön’s production facility benefits from a favourable location close to the Göta River (the largest in Sweden) and is within reach of nearby ports at Trollhättan and Gothenburg. The location is part of a package of measures that make the facility one of the most sustainable of its kind.
“Our location provides us with easy access to power and excellent transport routes,” Anders points out. “Moving our product by boat helps to keep emissions low, and the nature of our energy contracts means we are more or less a fossil-free operation.”
As Anders hints, Vargön signed a five-year power purchase agreement in 2024 with Fortum, one of the cleanest energy companies in Europe. The energy that will power Vargön as part of the agreement is 100% fossil free. Similarly, the company is always looking for new, innovative ways to make its production processes more environmentally friendly and collaborates with organisations like Sweden’s Industrial Research Institute for Metals and Mining (Swerim) to help advance the sector.
“Earlier last year,” Annelie remarks, “we embarked upon a full-scale industrial campaign in which we used sustainably sourced biocarbon to replace fossil coke. The results were very good, and we reduced our fossil process emissions by almost 25%.”
The biocarbon substitution programme earned Vargön an International Chromium Development Association (ICDA) Sustainability Award in 2024. However, the company will not be resting on its laurels and aims to reduce its Scope 1 carbon footprint by 30% by 2030.
“We are involved in various different projects to help make this a reality,” Annelie states. “If we cannot reach the target through the introduction of biocarbon alone, we are exploring alternatives like carbon capture, in line with the EU’s EMPHATICAL campaign.”
Forward-thinking and detail-oriented, Vargön prides itself on being a niche, rather than bulk, producer of ferrochrome. The organisation works closely with its customers, developing products that suit their needs, such as low-phosphorous ferrochrome important to some steel producers.
Despite its rare capabilities and celebrated position as one of the world’s top ferrochrome producers, Vargön is a lean organisation with a team of only 220 employees. Even in a business shaped by science and technology, Anders argues that none of Vargön’s success would be possible without its skilled and industrious workforce.
“People are our most important asset,” he affirms. “Our geographical location makes hiring a challenge sometimes, so we focus on hiring locally, and training staff ourselves.
“Internal training is very important for our line of work. We have systematic development programmes, as well as external leadership training for all managers.”
The strength and versatility of Vargön’s team was most evident during the Covid-19 pandemic. Not only did the organisation’s owner, Robert Y. Yildirim, have the courage to keep Vargön open, all workers – including office staff – stepped out onto the plant floor and kept the furnaces running.
Having remained resilient during difficult times, Vargön is now well-positioned for the future. Thanks to strong financial backing from Yildrim and his Group, Anders believes that Vargön is about to enter an “interesting” phase of its development.
“Our owner has recently approved our new CapEx investments, and they are historically big,” he reveals. “He has great confidence in our company.
“For instance,” Anders continues, “one of our furnaces has been closed for years, but that is now under renovation. We also have environmental investments in the pipeline that will keep us in line with the Industrial Emissions Directive, but more importantly, we understand that the environment and productivity go hand-in-hand.”
Ferroalloys have been produced for well over a century, but as Vargön’s emphasis on the environment illustrates, the company is propelling the industry into the future. Annelie has been a key part of the organisation for more than 25 years, and in that time, one thing has become clear – the importance of co-operation and working together.
“I was just sitting here thinking about everything that has happened since I started at Vargön,” Annelie says. “With the green transition happening right now, I think it’s more important than ever to have collaboration throughout the value chain to ensure success.”
Just as the right amounts of chromium and iron combine to form ferrochrome, so the ideal mixture of collaboration and innovation is now coming together to form Vargön Alloys’ bright future.
