Insulation industry news from Global Insulation

Austria: Austrotherm plans to raise the prices of its expanded polystyrene (EPS) and extruded polystyrene (XPS) insulation products by up to 15% from 25 September 2023. The insulation producer said earlier in August 2023 that production reductions and unexpected plant shutdowns had increased the costs of its main raw materials.

US: Owens Corning is planning to close its fibreglass insulation plant at Eloy in Arizona due to poor residential housing market conditions. The Casa Grande Dispatch newspaper reports that the company’s decision was announced at a local council meeting in late July 2023. The Eloy plant was in operation for 15 years before being previously closed in 2010. However, in late 2021 the company announced plans to restart production at the unit. The closure will entail 36 job losses.

US: Owens Corning has agreed to sell the site of its Santa Clara, California, insulation plant to property company Panattoni Development. Local Press has reported that the plant’s closure ‘on or around’ 31 October 2022 will result in the loss of 225 jobs.

Finland: Following negotiations with staff Paroc has decided to shut down its Oulu stone wool plant in July 2017. The closure will involve the transfer and centralisation of support functions currently in Oulu to other Paroc plants and locations. Production of building insulation will be moved mainly to the Paroc plant in Parainen and support functions will be moved to other Paroc locations. 64 members of staff will lose their jobs, including all of the production workers at Oulu, and five staff will be moved to other locations.

“The decision to shut down the factory was difficult due to the considerable impact it will have on the personnel. However, the utilisation rate of the current capacity of Finnish stone wool factories is too low to ensure competitive operations in Finland. The factory located in Oulu is old and, in addition to the already high cost structure, continuing operations would require significant investments in the near future,” says Kari Lehtinen, chief executive officer of Paroc Group.”

Finland: Paroc Group is planning to shut down the operations of its stone wool plant in Oulu. The decision has been blamed on overcapacity of Finnish production without a similar increase in consumer demand. The plan also includes transferring and centralising support functions to other Paroc factories at other locations. Approximately 70 workers at the site will be affected by the decision and negotiations are on going.

“Starting the cooperation negotiations is very unfortunate. However, the utilisation rate of Finnish stone wool factories’ current capacity is too low to ensure competitive operations in Finland. The factory located in Oulu is an old one, and, in addition to the already high cost structure, continuing its operations would require significant investments in the near future,” said Kari Lehtinen, chief executive officer of Paroc Group.

Saudi Arabia: During a field inspection in Riyadh, the supervisory teams of the Commerce Ministry shut down three thermal insulation factories that were manufacturing flawed products. Samples taken by the teams proved that the insulation products did not comply with the required energy-efficiency specifications and standards of insulation materials. The Ministry has halted six production lines at the plants and confiscated 1500 product units. Plant managers were summoned by the Ministry for further inquiries. If found guilty of negligence, they could face severe fines or in some cases imprisonment.

US: Dow Chemical Company, the world's second-largest chemical producer, plans to close four plants producing Styrofoam. Dow Chemical will close plants that make the insulation material in Portugal, Hungary and the US state of Illinois and it will idle a Styrofoam facility in the Netherlands.

The decision comes as part of a cost saving exercise, including a cut of 900 jobs and a US$350m restructuring charge, to counter weakness in the European construction market and exit a loss-making business in Brazil. The moves are aimed at saving US$250m/yr.

Dow Chemical had cut production during the final quarter of 2011 to levels not seen since early 2009. It cited concerns about ebbing demand in Europe and the outlook in China during a recovery that Chief Executive Andrew Liveris described as 'jagged'. The job cuts represent around 1.7% of Dow's global work force. The effort is part of a broader streamlining program unveiled by the chemical giant in 2011.

New Zealand: EnergySmart, a major partner in the New Zealand government's home insulation scheme, has been placed into liquidation. The company owes a reported USD780,000 in outstanding unpaid invoices.

EnergySmart has offices across New Zealand and is one of the Warm Up New Zealand scheme's larger providers, having carried out 5% of 115,000 home insulation retrofits across the country since the scheme began in 2009. The company's turnover in 2009-10 was USD11m, but it made a loss of USD590,000. Mike Underhill, chief executive of the Energy Efficiency and Conservation Authority, which runs the USD270m scheme, said he was 'appalled'.

EnergySmart was sold by its founders, Peter and Robyn McKeown, for USD390,000 in 2006. After trying to attract a commercial buyer, the company was acquired by the Hutt-Mana Charitable Trust, who injected USD590,000 in 2009.

US: Knauf Insulation, a manufacturer of fibreglass insulation used in new homes, is halting production at its plant in nearby Lanett, Alabama a move that will see layoffs for 146 employees. Joey Viselli, Knauf's vice president of marketing, said that the 800,000ft² facility would be shuttered because of the continued and extreme downturn in demand in the home construction sector.

The workers impacted by the move will be will be paid through to 18 August 2011, according to an official notice filed with the Alabama Department of Economic and Community Affairs. Workers were informed of the closure on 14 June 2011, with most being released from their jobs immediately.

"The building economy has taken a turn for the worse in a fairly dramatic way," said Viselli. "At the peak of the market, (the industry was) starting about 1.7 million homes a year in the US. This year we'll be lucky to start 500,000 homes." A report released last month by the US Department of Housing and Urban Development and the US Census Bureau showed privately owned housing starts were at a seasonally adjusted annual rate of 523,000.

Viselli said severance deals would be offered and that some workers will be given opportunities to relocate to other Knauf facilities in Shasta, California and Shelbyville, Indiana, where Knauf Insulation North America is headquartered. He added that there were no plans to sell the Lanett plant at this time.

"It is a difficult decision to mothball a plant," said Mark Andrews, CEO of Knauf Insulation. "It is our sincere regret that we must take this action at this time. We will re-examine the status of the Lanett facility as market conditions change."