Insulation industry news from Global Insulation

US: The Rockfon unit of Denmark's Rockwool International will build a US$42m plant in Marshall, Indiana to make acoustic ceiling tiles. The 130,000ft² plant will employ at least 90 people. Construction is scheduled to begin in 2016, with the plant opening in the middle of 2017 on a 404,686m² site at the Chickasaw Trail Industrial Park shared with corporate sibling Roxul.

The new plant will make ceiling tiles with stone wool insulation made at the neighbouring Roxul plant, which also owned by Rockwool. That US$160m plant opened in 2014 and employs 150 workers. It will be the fifth Rockfon plant worldwide and the first in North America. John Medio, Rockfon's President of the Americas, said that the plant is, "Extending global capacity and meeting the growing demand for Rockfon's stone wool acoustic ceiling products in North America."

The Mississippi Development Authority will give the company US$2.4m for infrastructure and worker training, with the Appalachian Region Commission providing US$300,000. The Tennessee Valley Authority and Marshall County are providing undisclosed assistance. Rockfon has been granted a 10-year tax exemption from non-school property taxes.

Denmark: Rockwool's profit rose by 34% year-on-year to Euro19m in the third quarter of 2015. Its operating profit fell from Euro51.5m to Euro31.9m and its turnover dropped from Euro580m to Euro571m. Rockwool has now downgraded its growth for 2015 to 1 – 2% and its profit to Euro147m.

CEO Jens Birgersson said that Rockwool's most important markets, Germany and France, were challenging, while there is positive development in the US and in Northern Europe. The company has invested Euro36.2m in a new ceiling board production plant in Mississippi, US. Rockwool is implementing a savings strategy aimed at making annual savings of Euro49.9m as of 2017.

Denmark: Rockwool International has posted its financial results for the first half of 2015. These show a marginal improvement in performance for the period compared to the same period of 2014.

Its sales came to Euro1.06bn, a 2.3% increase compared to the same period of 2014 with no significant overall effect from exchange rates. However, for the second quarter of 2015, net sales were 1.7% down compared to the second quarter of 2014.

The external sales of Rockwool's Insulation Segment reached Euro798.6m in the first half-year, which is slightly below 2014 but represents an increase of 1.0% based on comparable exchange rates. For the second quarter of 2015 external sales decreased by 1.0% compared to same period of 2014, mostly due to a negative exchange rate effect of 1.2%. Earnings before interest, tax, depreciation and amortisation (EBITDA) for the first half were Euro155.6m.

Sales prices have continued to be stable in most countries where Rockwool operates with the exception of France where sales prices decreased in a number of key segments. Input costs have were also reported to have been 'stable' in the first half of2015, with some positive effect from raw materials stemming from lower energy prices.

First half-year sales in Western Europe increased by 2.0% with only limited effect from exchange rates. The German and, to a lesser extent, the French insulation markets continued to be disappointing whereas most other European countries showed solid signs of recovery. For the second quarter of 2015 Western Europe increased 0.4% against the same period in 2014, with no impact from currencies.

Eastern European insulation sales decreased by 14.6% compared to the first half of 2014 and also decreased by 2.6% based on comparable exchange rates. While sales in Poland continued to perform well, the decrease was primarily due to lower sales in Russia where difficult market conditions continued to prevail. For the second quarter of 2015 sales decreased by 11.3% but by only 1.8% based on comparable rates, thanks to slightly more positive conditions in Russia.

In North America and Asia, the positive development of sales in the first quarter slowed. Sales increased by 21.7% compared to 2014 primarily due to a positive exchange rate effect as the increase at comparable exchange rates was 8.9%. The growth mainly comes from North America while sales in Asia decreased slightly. For the second quarter of 2015 sales increased by 20.7% but only 5.4% based on comparable rates.

Going forward, Rockwool expects that market conditions in Europe will continue to improve gradually in line with the development seen in most of the countries during the first half of 2015. It is also expected that trading conditions in Germany will improve in the coming quarters, even if it is unlikely that the delayed plan for new government incentives to stimulate energy renovation in buildings will be ready to benefit the German insulation market in 2015. Sales prices in Europe are expected to remain around their current level.

The instability in the Russian economy makes it difficult to predict how business conditions will develop, but Rockwool has maintained its forecast of a decline around 15%. It is not expected that sales price increases can offset the high inflation given the competitive situation in the Russian insulation market.

Despite a slower development in the second quarter, Rockwool says that it is still confident that sales in North America will register a double digit increase supported by good market conditions and increased interest in the properties of mineral wool. The green field factory in Mississippi remains on target to reach the end of its scheduled running-in period by end 2015.

Denmark: Theo Kooij, division managing director of the east division, will leave Rockwool Group to pursue other career opportunities. Theo has been a member of group management since 2001.

"During his years in the Rockwool Group, Kooij has contributed to our development and growth in many areas. I would like to thank Theo for his contribution to the group and wish him all the best in his future endeavours," said Jens Birgersson, Rockwool CEO.

In the ineterim the east division will be managed by CFO Gilles Maria.

UK: According to Builders Merchant Journal, an open letter to prime minister David Cameron published in the Financial Times on 10 June 2015 warned that a failure to tackle climate change could put the economy at risk, while decisive action could create jobs and boost competitiveness. The letter was sent by 80 UK businesses, including Knauf Insulation, Rockwool, Baxi, Akzonobel and Worcester and Bosch.

The businesses have called on the new administration to:

• Seek a strong global climate deal in Paris in December 2015 that limits temperature rises to below 2°C;

• Set an ambitious 5th carbon budget covering 2028 – 2032 to drive forward UK emissions reductions;

• Establish a long-term framework for investment in the low-carbon economy, giving industry much-needed clarity over what is expected in terms of low-carbon development and boost the confidence of green investors.

"British business is ready to step up. From construction and energy to retail, the best British enterprises know that green growth is the future," said Worldwide Fund for Nature (WWF) UK chief executive David Nussbaum. "They take on board that it's no longer credible to base a sustainable economy on fossil fuels, so the government should put us on track for a low-carbon world. As we approach international climate talks, Britain should be a global champion for change, but a lack of consistent long-term policies sends a confusing message to business and undermines our attractiveness to investors. The prime minister should send a clear message that the only way forward is a green economy and support forward-looking firms that want to build a clean economy."

Denmark: Rockwool has said that its results for 2014 were negatively affected by the devaluation of the Russian Rouble and that Russia will continue to impact its results for some time to come. Its turnover, however, increased by 9% year-on-year to Euro2.18bn, whereas earnings before interest and taxes (EBIT) fell by 4% to Euro161m. Post-tax profit decreased to Euro112m from Euro116m in 2013. Rockwool expects its net sales growth in 2015 to be slightly positive and EBIT to reach around Euro150m.

Canada/US: Roxul, a subsidiary of Rockwool International, has adopted a new 'strategic direction' for the North American Industrial, Marine and Offshore business. Effective from 1 January 2015, the Roxul Industrial & Marine team has been integrated into a global platform with Rockwool Technical Insulation (RTI) to create Roxul Technical Insulation.

"With our existing expertise and combined resources, Roxul Technical Insulation can provide improved support to its North American customers by leveraging our global influence, ultimately bringing greater value to our local response," said Mike Kozokowsky, vice president Industrial, Sales. The North American team will continue to be headquartered out of Roxul's Milton offices in Ontario, Canada.

Russia: Danish insulation materials producer Rockwool is among the companies that are reportedly channelling funds out of Russia for fear of a collapse of the Russian Ruble. Rockwool deputy officer for finance and tax, Jens Krogsgaard, fears that Russia will introduce currency restrictions to protect the Ruble. Russia is currently the fourth biggest market for Rockwool.

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.

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.