Insulation industry news from Global Insulation

Russia: Saint-Gobain has bought a 25.1% share in ISOROC, a Russian building materials company based in Tambov. The cost of the acquisition has not been announced nor has Saint-Gobain revealed who sold the shares. The transaction is in line with Saint-Gobain Group's expansion strategy that enables it to continue growing its insulation activity in Russia.

ISOROC is a leader in the central region of Russia for mineral wool products, the most commonly used insulation material in the Commonwealth of Independent States (CIS). The company reported revenues of Euro46m in 2011.

According to the SPARK database, Germany's Erste AMSC Unternehmensbeteiligungs GmbH owned 37.94% of ISOROC as of 7 September 2012, the European Bank for Reconstruction and Development (EBRD) owned 35.93% and Rabo Black Earth B.V. owned 7.18%.

Saint-Gobain previously announced in June 2012 that it had acquired British insulating foam producer Celotex to strengthen its position in the UK insulation market.

UK: Saint-Gobain has signed an agreement to acquire Celotex Group Limited, one of the leading British producers of high performance insulating foam.

Celotex had a turnover of Euro86.7m during its last fiscal year to August 2011. The company currently has 170 employees and two production lines based in Hadleigh near Ipswich, UK. It recently extended its capacity with a new Euro3.7m distribution and innovation centre in order to support its growth in the construction market. Celotex will continue to operate under its brand name and with its existing management team.

Already present in the UK and Ireland on the insulation market with its Isover brand, Saint-Gobain will enhance its insulation offer for new market segments such as flat roofs and floors. It also strengthens its positions in the insulation for the new construction and renovation markets.

Completion of the acquisition is subject to approval of the UK Office of Fair Trading.

France: Saint-Gobain has posted a net income of Euro1.3bn for 2011, a rise of 14% from Euro1.1bn in 2010. The group has attributed this to strong demand for its building materials in emerging markets combined with its ability to pass higher raw material costs to customers in the form of higher prices.

Recurring net income spiked to Euro1.7bn in 2011, a 30% rise from Euro1.3bn in 2010. Operating income rose to Euro3.4bn, a 10% rise compared to Euro3.1bn. Group sales increased to Euro42bn, a 5% rise from Euro40bn.

"We managed to limit the impact of the strong increase of raw material and energy thanks to the increase of the prices of our products," said chief executive Pierre-Andre de Chalendar.

De Chalendar added that he expects a moderated growth of revenues in 2012 as the company intends to continue transferring higher costs to its products' prices. He declined to give specific data, though he said the growth will be slower than the 5% in 2011.

In its Interior Solutions division (which includes insulation) the group recorded sales of Euro5.5bn for 2011, a rise of 6.1% from Euro5.2bn in 2010. Operating income met Euro450m in 2011, a rise of 19% from Euro380m. Notably capital expenditure increased to Euro330m, a rise of 70% from Euro190m. Overall the group doubled investment spending for 2011, in energy efficiency and energy markets, to almost Euro900m.

Sales volumes for Interior Solutions were up in all geographic areas, particularly in the US, Asia and emerging countries. In Western Europe and especially France, trading continued to be buoyed by stricter energy performance regulations.

Saint-Gobain's CEO has announced an ambitious expansion plan to boost total revenues to Euro55bn and net profit to Euro3bn by 2015, through acquisitions and organic growth. The company said the plan to spin off its unit Verallia is still being considered, but market conditions are not favourable in the short term.