Insulation industry news from Global Insulation

Netherlands: Nine-month restated sales for Recitel fell by 7.3% year-on-year to Euro924m in September 2019 compared to Euro997m in the corresponding period of 2018. Despite ‘double-digit’ volume growth, insulation sales over the period fell by 4.5% to Euro193m from Euro202m due to pricing issues stemming from the loss of market share to fibre insulation as a lingering after-effect of the isocyanate shortage of 2017. The company noted the ‘ramping-up’ of production at its new plant in Finland, with all products now certified for sale in the Nordic countries. Recticel CEO Olivier Chapelle noted the continued substantial decrease in debt as a positive in the period.

Finland: Paroc has started to introduce new logotype, updated packages and new communication material following its acquisition by Owens Corning. The insulation materials producer said that is was a ‘strong’ brand and that it would continue marketing its products under the red-and-white striped brand image. The company was purchased by US-based Owens Corning in early 2018.

Belgium: Recticel’s sales from its insulation division have rallied following the resumption on methylene diphenyl diisocyanate (MDI) supplies after a shortage in 2017 and poor weather in the first quarter of 2018. Its sales rose by 2.7% year-on-year to Euro129m in the first half of 2018 from Euro133m in the same period in 2017. Earnings before interest, taxation, depreciation and amortisation (EBTIDA) increased by 60.6% to Euro14.2m fro Euro22.8m. It attributed the growth in profitability to price rises and efficiency gains. The company also said that the construction of a new plant in Finland, dedicated to the supply of the Scandinavian and Baltics markets, is on schedule to start up in late 2018.

US: Owens Corning has completed its acquisition of Finland’s Paroc Group for Euro900m. Completion followed the US company obtaining all the necessary regulatory clearances to buy the mineral wool producer.

“We’ve had a strategic goal to broaden our product portfolio and diversify our geographic scope to better address our customers’ needs and support their growth. The acquisition of Paroc does both. We now have a leading position in Europe and in the global mineral wool business,” said Julian Francis, president of Owens Corning’s Insulation Business.

US/Finland: Owens Corning has signed an agreement with CVC Capital Partners to acquire Paroc Group for Euro900m. The sale, which is subject to regulatory approvals and other customary conditions, is anticipated to close in early 2018. The company plans to finance the acquisition through a combination of long-term debt and pre-payable bank financings.

“The acquisition of Paroc delivers on Owens Corning’s strategy to provide our customers with a portfolio of insulation products that cover the full temperature spectrum in the three largest insulation markets – Europe, North America and China. Over its 80-year history, Paroc has earned a reputation for high-quality products and technical expertise,” said Owens Corning chairman and chief executive officer Mike Thaman.

The acquisition of Paroc is expected to expand Owens Corning’s mineral wool technology, grow its presence in the European insulation market, provide access to a variety of new end-use markets and will increase the company’s sales mix of the insulation business outside the US and Canada to 35%.

Paroc is a European manufacturer of mineral wool insulation solutions for a variety of end markets. Paroc manufactures building insulation for thermal, fire and acoustic applications in residential and commercial construction. The company also manufactures technical insulation for HVAC (heating, ventilation, and air conditioning) systems, industrial processes and the marine, offshore and original equipment manufacturer industries. It employs over 1800 people in 13 countries and operates facilities in Finland, Lithuania, Poland, Russia and Sweden.

Finland: Recticel plans to build a new Euro23m polyurethane (PUR) foam insulation board plant. Production at the site is scheduled to start in the second half of 2018. The site will manufacture thermal insulation products for sale in Finland, Norway, Sweden, Denmark and the Baltic countries

“This investment is an additional step in the execution of the growth strategy of our Insulation business. It offers an attractive expansion in the Nordic region, which is a growing market for high performance insulation materials,” said Olivier Chapelle the company’s chief executive officer (CEO).

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 has described 2016 as ‘fairly challenging’ as its net sales fell slightly to Euro376m and its earning before interest, taxation, depreciation and amortisation (EBITDA) rose by 4% to Euro76.5m in 2016 from Euro73.3m in 2015. Despite reporting an improvement in construction activity in the second half of the year, sales fell in Russia. The insulation producer solid its Paroc Panel System (PPS) business to Kingspan Group in December 2016 and it announced plans to shut its Oulu stone wool plant in January 2017.

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.

Brazil/Finland: Saint-Gobain Isover has obtained Environmental Product Declarations (EPD) for its products in Brazil and Finland. It has obtained five EPDs in Brazil where it has become the first insulation company in the country to obtain EPDs registered with Environdec. In Finland it has published three new verified EPDs through the Norwegian EPD platform EPD Norge.