Insulation industry news from Global Insulation

UK: Insulation and cladding companies have blamed each other in a public inquiry investigating the Grenfell Tower Fire that took place in 2017 that led to 72 deaths. During closing statements to the inquiry the Press Association reports that the legal representation for Ireland-based Kingspan said, "In its phase one report the inquiry concluded that the cladding system on Grenfell Tower did not comply with the building regulations and that the PE ACM [polyethylene cladding] manufactured by Arconic was the principal reason for the rapid fire spread." The lawyer went on to summarise that Kingspan’s Kooltherm K15 phenolic insulation product was safe when used appropriately and not relevant to the nature and speed of the spread of the fire in this instance.

In a written statement though Arconic blamed the cause of the fire upon the failure by those involved in the refurbishment of the tower in assessing the fire performance of the building materials used and their configuration. It added, "A failure which was in significant part the result of the efforts made by the manufacturers of the insulation, Celotex and Kingspan, to hide or downplay the combustible and hence (under the prevailing regulatory regime) non-compliant nature of their product, an awareness of which would otherwise and in any event have led inexorably to the choice and configuration of the components being re-visited and amended."

The majority of the insulation purchased for use in a refurbishment of Grenfell Tower prior to the fire in June 2017 was Celotex’s RS5000 polyisocyanurate foam (PIR) insulation board. However, Kingspan confirmed in July 2017 that a small amount of its Kooltherm K15 product had also been used without its knowledge and that it had no involvement in the design or specification of the refurbishment.

Ireland: Kingspan says that it expects to record a profit of Euro415m in the first half of 2022, up by 26% year-on-year from Euro329m in the first half of 2021. The company noted that its global backlog of insulated panels orders fell by 2% year-on-year in volume on 31 May 2022, having previously been up by 19% year-on-year on 31 March 2022. It said that order volumes nonetheless remained above 2019 levels.

Ukraine: Ireland-based Kingspan plans to spend Euro200m towards building a ‘Building Technology Campus’ in Ukraine. The site will be used to manufacture insulation and district heating products. Development of the project is due to start immediately with eventually commissioning forecast for 2027. The insulation company has appointed a project team to identify a suitable site, likely to be in the west of the country, and is liaising with the Ukrainian Government. Over 600 jobs are expected to be created when the site opens.

Gene Murtagh, the chief executive officer of Kingspan Group, said “This investment sits at the crossroads of three crises: the climate crisis, the energy security crisis, and the crisis caused by the Russian war against Ukraine. The new Building Technology Campus we are planning will make positive contributions on all three fronts, supporting Ukraine as it rebuilds its economy, meeting demand across central and Eastern Europe for energy efficient buildings, and helping Europe to reduce reliance on oil and gas imports.”

Kingspan previously said it had exited the Russian market and divested its operations to local management in April 2022 following a decision made in March 2022.

UK: Mannok recorded sales of Euro270m in 2021, up by 16% year-on-year from Euro233m in 2020. The company’s earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 17% to Euro25.8m from Euro31.1m. The group attributed this to substantial cost absorption beginning in mid-2021. It noted particularly high raw material costs in its insulation segment due to current global shortages. Overall energy prices rose by 66% year-on-year, while the cost of carbon emissions trading scheme (ETS) credits more than doubled to Euro80/t at the end of the year.

Mannok said that demand for its products remains resilient, supported by stronger cost recovery. It added that a levelling out in energy prices has driven stronger profitability in the first quarter and April of 2022.

Russia: Ireland-based Kingspan says it has exited the Russian market and divested its operations to local management. The decision was made in early March 2022 but it took several weeks to carry out. The company said that Russia accounted for less than 1% its global operations. Following the departure Kingspan products will no longer be available for sale in Russia.

The insulation producer added that it was “Deeply saddened by the growing humanitarian crisis as a result of Russia’s unjustified attack on Ukraine and its people.” It has made a US$750,000 donation to the United Nations Children's Fund (UNICEF) for the setup of five Blue Dot Centres to assist refugees on the Ukrainian border.

France/Denmark: Ireland-based Kingspan has signed deals for two diversifying acquisitions. On 18 February 2022, it agreed to buy France-based roofing and building waterproofing company Ondura from France-based Naxicap Partners for Euro550m. Meanwhile, in Denmark, the group has also agreed to acquire wood-based acoustic board producer Troldtekt. Troldtekt produces its boards from ordinary Portland cement (OPC) and shredded Norway spruce wood.

Speaking of the latter deal, Kingspan Insulation managing director Alan Lawlor said "I am delighted to welcome Troldtekt to the Kingspan family. As the global leader in high-performance insulation and building envelope solutions, we have the capacity to help them expand beyond their core markets, whilst bringing acoustic and decorative boards and natural insulation materials into our portfolio. Troldtekt has been able to continuously innovate and it sets the bar impressively high in the field of the circular economy.” He concluded "We will invest significantly in the company's production facilities to set them up for geographic growth."

Ireland: Kingspan says that it saw ‘dramatic’ price inflation from its key raw materials in 2021. To compensate it passed on around Euro700m in cost increases to the market. The group’s revenue grew by 42% year-on-year to Euro6.50bn in 2021 from Euro4.58bn in 2020. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 42% to Euro893m from Euro630m. Turnover from the group’s insulated panels business represented 65% of total revenue at Euro4.23bn and its insulation boards business represented 18% at Euro1.18bn. The insulation producer noted particular positive markets in the Americas, France and the UK.

“The business delivered an exceptional performance last year, with our growing sales to customers in the technology, online distribution, and automotive sectors instrumental in the results. Whilst dramatic input price inflation was a major feature, our cost recovery efforts helped ensure continued margin improvement,” said Gene M Murtagh, the chief executive officer of Kingspan.

Slovakia: Ireland-based Kingspan has stopped an attempt to buy Trimo due to difficulties obtaining approval from the European Commission. Regulatory approval failed to arrive before a deadline set in August 2020 when Kingspan and Polish private equity fund Innova Capital signed a contract for the sale, according to the Finance newspaper and the Slovenian Press Agency. During its investigation the commission expressed concerns that the acquisition could reduce competition and lead to price rises in several countries. It added that the acquisition would have created the largest supplier of mineral wool sandwich panels in Europe.

Trimo was acquired by Innova Capital in 2016. It produces mineral wool sandwich panels and is reportedly the second largest seller of the products in Europe with a 10% market share. It operates production plants in Slovenia and Serbia and most sells panels in Europe. Innova Capital is expected to select a new buyer for Trimo.

UK: Kingspan has recalled all uninstalled Kooltherm K15 phenolic insulation from UK customers pursuant to an order by the government’s Office for Product Safety and Standards. The company estimates the value of the affected stock to be Euro180,000. InsideHousing News has reported that the company hopes to resume its sale of Kooltherm K15 insulation following its suspension on 23 December 2021.

Kingspan says that recent tests have shown that Kooltherm K15 insulation is eligible for a C rating under European safety standards, which would enable it to be fitted in buildings of above 18m in heigth.

UK: The Mercedes-AMG Petronas F1 motorsport team has terminated its sponsorship contract with Ireland-based Kingspan in response to public pressure. The team’s cars first displayed Kingspan sponsorship at the Saudi Arabian Grand Prix on 3 - 5 December 2021. Grenfell Tower Fire survivors and bereaved families group Grenfell United protested against the display.

Kingspan withdrew fire test reports on its Kooltherm K15 phenolic insulation in November 2020 after admitting at the Grenfell inquiry that they may not reflect the actual product. Refurbishers used Kooltherm K15 in Grenfell’s exterior insulation system prior to the deadly fire at the tower in June 2017.

Mercedes-AMG Petronas said "Both parties have subsequently concluded that it is not appropriate for the partnership to move forward at the current point in time. We have therefore agreed that it will be discontinued with immediate effect."