Ireland: Kingspan has earmarked Euro20m for its initial expansion into Mexico, which it expects to enter in 2016 or 2017, according to chief executive Gene Murtagh. The greenfield expansion was confirmed by the group as it posted record first-half results, boosted by acquisitions and favourable foreign exchange movements.
Revenue rose by 39% to Euro1.24bn, while its trading profits jumped by 61% to Euro112m. Excluding currency benefits, revenue was 29% higher, while trading profits were up by 44% on the same basis. Kingspan reported that its overall performance was underpinned by strengthening UK and US markets, while there has also been recovery in other important markets for the group, such as the Netherlands.
Kingspan completed two significant acquisitions so far in 2015: the Euro320m purchase of Belgian group Joris Ide and the Euro139m purchase of Canada's Vicwest. The company also plans to install new insulated panel manufacturing capacity at plants in Belgium, France and Russia over the next two years.
Murtagh said that Kingspan has allocated Euro75 - 80m/yr for capital spending over the next four to five years, which includes the start-up costs for its entry to Mexico. "There were some bolt-on opportunities in Mexico but we haven't managed to unlock any of those, said Murtagh. "The investment at the start will be in the order of Euro20m. Naturally, over time that becomes larger as we expand the business."
Kingspan has also continued to eye opportunities in Brazil. "We haven't made any significant headway, but it's still very much in our thinking," added Murtagh. "Our ambition in Brazil would be to do it through an existing player and that just takes a bit of patience."
