Insulation industry news from Global Insulation

UK: Kingspan has reported 7% year-on-year growth in its third-quarter 2014 revenue, partly due to an upturn in the UK property market. It now expects to deliver a full-year trading profit in the region of Euro144m, up by 17% from the year ago period. Net debt at the end of September 2014 was Euro39.1m lower than at the same point in 2013, at Euro108m.

US: Element Partners, a growth equity firm focused on investing in businesses providing innovative products, software and services to the energy and industrial markets, has executed a definitive agreement to sell Icynene to FFL Partners.

Established in 1986, Icynene manufactures and supplies spray foam insulation. In the past 25 years, more than 3Bnft² of Icynene spray foam insulation has been installed in nearly 500,000 residential and commercial projects.

Bulgaria: Bulgarian insulation materials producer Hydroizomat has announced that its non-consolidated loss fell by 24% year-on-year to Euro95,100 in the first nine months of 2014. Non-consolidated revenues fell to Euro484,667 in January - September 2014 from Euro823,167 in the same period of 2013, while sales expenditures fell to Euro22,637 from Euro50,934. Its non-consolidated operating loss fell to Euro29,839 in the first nine months of 2014, compared to Euro92,605 in the same period of 2013.

Australia: Boral CEO Mike Kane has said that Australia's brick industry will pay the price if the competition regulator sticks to its ‘narrow view’ of the brick market. He warned that plant closures and land sales were likely if the merger of Boral and CSR's brick businesses was blocked.

Boral announced plans to merge its east coast brick business with rival CSR in April 2014 in a bid to boost profitability. In its statement of issues in October 2014, the Australian Competition and Consumer Commission (ACCC) rejected Boral and CSR's definition of bricks as part of a broader cladding market and gave the preliminary conclusion that the deal would increase the price of bricks and reduce consumer choice.

Kane said that the ACCC's issues paper was ‘concerning.’ "We are in the fortunate position where the high price of land in Australian eastern metropolitan markets means that value will eventually be delivered for Boral shareholders if an ultimate exit over time is the only remaining option," said Kane. About 550 people work in Boral's brick business. Boral has cut more than 1000 jobs in the last two years. "Sadly for Australia, a narrow view by regulators will see the brick industry on the same trajectory as the auto, oil, refining, steel, aluminium and cement industries," said Kane.

ACCC chairman Rod Sims stressed that the issues paper was a preliminary view and the regulator was seeking more information. "Every time we assess a merger, the merger parties argue that our view is too narrow. Our preliminary view is that most residential houses use bricks, as distinct from other cladding,” he said. The ACCC plans to make its final decision on 18 December 2014.

Denmark: Rockwool is rolling out a new strategy under the management of the company's chairman of the board, Bjørn Høi Jensen, whose first decision was to replace CEO Eelco van Heel with Jens Birgersson.

Birgersson was chosen for the task due to his significant global experience. Rockwool wants to replace its present strategy, which involves aggressive investments in building plants, with a smarter global organisation and new ways of entering markets. According to Jensen, the previous strategy had not proved successful and the return on investment capital had not been impressive. The new strategy is expected to generate bigger earnings for Rockwool.

Germany: The German cartel office has started a probe into the country's producers of insulating materials due to suspicions of possible prohibited price agreements. A spokesman of the cartel office in Bonn, North Rhine-Westphalia revealed that there had already been a large-scale raid with the support of the police in mid-March 2014. The investigators are trying to find out whether the companies held illegal talks concerning prices and sales regions for hard-resistance foam, which is used for insulation in new buildings. 

Ireland/US: Irish insulation and building materials manufacturer Kingspan has completed the acquisition of US firm Pactiv. The US$82m deal has been funded from Kingspan's existing cash resources.

Pactiv produces a range of extruded polystyrene (XPS) insulation products under the GreenGuard brand, which it supplies throughout the US from its manufacturing base in Virginia. Pactiv had sales of US$84m in the year to June 2014 and recorded an operating profit of US$10m in the period. The enterprise value is US$82m, of which US$72m is payable in cash on completion plus US$10m of working capital. Gross assets being acquired are US$30m.

US: Johns Manville (JM), part of Berkshire Hathaway, has named Mary Rhinehart as chairman of the company. Rhinehart was appointed as president and CEO in November 2012.

Warren Buffett, chairman and CEO of Berkshire Hathaway, selected Rhinehart for this additional role due to her diligent leadership of JM. “With more than three decades of comprehensive experience at JM, Mary Rhinehart has proven not only her ability to succeed at every level, but also her commitment to the business and passion for JM’s employees and customers. Mary is the right choice for chairman of JM,” said Buffett.

Rhinehart has held a variety of roles during her 35-year career, including general managership of several Johns Manville business units. Before being named CEO, she was CFO, providing her breadth of experience in all financial operations of the company. Rhinehart’s wide range of responsibilities have also encompassed global business management and strategic business development. 

“I am proud to assume the role of chairman of Johns Manville and am grateful for the confidence Berkshire Hathaway has placed in me,” said Rhinehart. “Moving forward, JM will continue to win by delivering powerful experiences to our customers and employees, experiences that will create lasting relationships, sustainable competitive advantage and profitable growth.”

UAE: Rockwool International has won a new order to supply insulation to Abu Dhabi's Takreer refinery project. The refinery will have a 30,000 barrels/day capacity for crude oil and will produce 40,000t/yr of carbon black. The refinery is due for completion in December 2015.