Insulation industry news from Global Insulation

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: Michael Gove, the Secretary of State for Housing, Communities and Local Government, has told parliament that the government intends to make building materials producers and developers pay to fix all fire-safety issues at high-rise buildings. In a statement Gove said, “We will make industry pay to fix all of the remaining problems and help to cover the range of costs facing leaseholders. Those who manufactured combustible cladding and insulation, many of whom have made vast profits even at the height of the pandemic, must pay now instead of leaseholders.” Flat owners in buildings over 11m tall will no longer be forced to pay for their own repairs under the proposed plans, according to the Times newspaper. Manufacturers and developers face a potential Euro4.8bn bill for the remedial work.

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."

Ireland: Kingspan’s consolidated sales were Euro4.72bn in the first nine months of 2021, up by 22% year-on-year. Its insulated panel sales increased by 47% and its insulation boards sales increased by 51% over the same period. In the third quarter of 2021, the company’s sales rose by 50%, its insulated panels sales rose by 53% and its insulation boards sales rose by 78%.

The group said “Our backlog is strong, though it is reducing week-on-week as sales activity outpaces new order placement. Underlying panels order intake volume is down by 10% year-on-year in the third quarter of 2021. 2021 so far has been unusual and characterised by order placement earlier in the year than is typical, as customers sought to get ahead of on-going inflation and availability pressures. It is likely what we are experiencing now is a fallow period in order placement following that. Raw material prices have been somewhat stable in more recent weeks, albeit at record high levels and following a period of unparalleled increases. There are no signs yet of any meaningful raw materials deflation, although should that come the impact would be negative.” It added that its activity pipeline is ‘generally encouraging,’ saying “2021 has still to play out fully, with the seasonally important fourth quarter remaining and, accordingly, we expect to deliver a full year trading profit in the region of Euro750m, significantly ahead of the Euro508.2m recorded in 2020.”

US: Ireland-based Kingspan has acquired Minnesota Diversified Products, the producer of the DiversiFoam range of expanded polystyrene (EPS) and extruded polystyrene (XPS) foam and polyisocyanurate (PIR) foam billets. The group says that DiversiFoam will join Kingspan Insulation’s North American division and become a key proponent of its 10-year sustainability programme, Planet Passionate. It plans to expand the company’s Rockford EPS foam plastic recycling plant. Minnesota Diversified Products is committed to recycling 99% of production waste.

Managing Director Doug Crawford said "DiversiFoam and Kingspan are a natural fit from a geographic, technical and cultural perspective. The combination of these two outstanding businesses, coupled with Kingspan’s commitment to further investment will provide our collective customer base, our employees and our business partners with significant value. I am thrilled to welcome the DiversiFoam team into the Kingspan family.”

Ireland: Kingspan has forecast first-half consolidated net sales growth of 40% year-on-year in 2021 to Euro2.90bn from Euro2.07bn in the first half of 2020. It predicted a rise in operating profit of 57% to Euro315m from Euro200m. The company concluded its acquisition of Denmark-based pipe insulation producer Logstor International Holding on 22 June 2021 for Euro253m.