Insulation industry news from Global Insulation

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.

Finland: Paroc Group has agreed to sell sale its Paroc Panel System (PPS) business to Kingspan Group. The personnel of PPS will all be transferred to the new owner. Along with the transaction, the parties have agreed on commercial cooperation in stone wool supply to the PPS factory in Parainen. No value for the deal has been disclosed.

"The arrangement supports the focus of Paroc on building and technical insulation. We will continue to seek market expansion and growth possibilities in those areas,” said Kari Lehtinen, chief executive officer of Paroc Group.

PPS is a subsidiary of Paroc Group Oy. In 2015, PPS sales totalled Euro47m, with about 100 employees in Finland, Sweden, Norway, Denmark, and Germany. Paroc Panel System panels are manufactured in Parainen, Finland.

Russia: Restrictions on imports have stopped Paroc from transporting stone from its Lapinlahti in Finland to its insulation plant in Russia. Joakim Westerlund, Paroc's chief operating officer, said that the import restrictions on crushed rock material were imposed with relatively short notice in summer 2016 according to the Savon Sanomat newspaper. Subsequently the insulation producer has had to source stone locally in Russia. Quarrying at Lapinlahti for Paroc by Fjäder Group has previously totalled 20,000t/yr.

Finland: Paroc’s net sales for its building insulation division has risen by almost 1% year-on-year to Euro215m in the first nine-months of 2016 from Euro213m in the same period of 2015. However, on an adjusted basis for comparable insulation rates the insulation producer says that its sales grew by 2.4%. It reported sales volumes growth in most markets except for the Baltic countries and Russia. Overall sales for the company rose slightly to Euro301m, boosted by growing sales for technical insulation.