Insulation industry news from Global Insulation

UK: The UK's energy-efficiency scheme, the Green Deal, has been launched. The scheme gives homeowners and businesses the option of paying for energy efficiency improvements such as insulation and new heating systems through an unsecured loan that is added to their electricity bill. The scheme aims to cover the cost of the improvements by the reduction in consumers' energy bills.

"More and more families are being hit by the rising cost of fuel bills and the best way people can protect themselves from increased costs is to use less energy. This is where the Green Deal comes in, giving people a whole new way to pay for energy saving home improvements," said Energy and Climate Change Secretary Edward Davey.

The Green Deal includes 45 different types of improvements to help people warm up their homes and pay for some or all of the improvements over time through their electricity bill. According to government statistics 8m households in the UK could benefit from solid wall insulation and 4m households could benefit from cavity insulation. It is expected that 60,000 jobs will be supported in the insulation sector by 2015, an increase of 26,000 in 2011. Euro4.1m of funding is to be spent on training in 'key' Green Deal skills.

Among others the Green Deal has been criticised by the environmental group Friends of the Earth for containing 'significant' flaws such as the interest rate on the loans offered. However, the Friends of the Earth did support the scheme's Cashback Scheme that makes Euro146m available to householders without them having to make any borrowings.

UK: Superglass Holdings plc, a Stirling, Scotland-based manufacturer of glass fibre insulation, has reported in an interim management statement covering 1 September 2012 to 14 January 2013 that the first phase of Project Phoenix, its capital investment programme, remains on budget and is on track for completion during the first half of 2013.

Estimated annualised cost savings from the programme have increased from Euro4.33m to Euro6.02m, with the first full year of savings expected in 2013-2014. The increase in savings is mainly due to the installation of new fiberising technology. One of the company's newly installed production lines is now running at full capacity and the second line scheduled to be upgraded in the spring of 2013. However, upgrading each line will incur 'significant' costs as a result of six weeks production downtime.

Sales volumes for the period have been steady but a stronger than anticipated demand for volume commodity products has had a negative impact on average sales prices. Overall market conditions are also affecting prices. Input costs have remained under pressure, particular as energy costs continue to rise.

Superglass remains cautious about the UK Green Deal and it continues to work on broadening its routes to market. Volumes are likely to reduce with potentially slow start-up of the Green Deal scheme.

UK: PipeHawk, a provider of advanced engineering solutions, has announced that its OM Systems subsidiary secured a contract with Kingspan to deliver a complete new production line, worth over Euro1.25m. The project comprises the provision of a turnkey automated production line to one of Kingspan's UK facilities and will be delivered during 2012-2013 financial year.

UK: Superglass Holdings plc, a Stirling-based manufacturer of glass fibre insulation solutions, has announced that its performance in the second half of the year ending 31 August 2012 will be below its first half performance due to extremely challenging market conditions. The company also reported the appointment of Allan Clow as its new finance director.

According to a trading statement, business in the second half period has been disappointing and demand in the market is subdued. Sales through CERT (Carbon Emission Reduction Target) related activity have been particularly disappointing. Net sales in the second half of the current financial year are lower than anticipated in the interim report as reported in April 2012 and will be below the level reported for the first half of the year ending 31 August 2012. Average daily sales tonnages have declined since a relatively strong performance in March 2012. Financial performance has also been adversely affected by a short-term increase in overhead costs incurred as a result of the turnaround process.

Meanwhile, cost reduction at the company remains focused on Project Phoenix, a capital investment programme that was central to the refinancing completed in December 2011.

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.

UK: Superglass Holdings, which makes glass fibre insulation, has reported that it made a pre-tax profit for the half year that ended on 29 February 2012. It added that market conditions remain difficult and that there is uncertainty over how the UK government's Green Deal environmental policy will operate.

Revenue for the half year rose year-on-year to Euo21.1m from Euro18.4m in the same half year in 2011, an increase of 14%. Pre-tax profit rose to Euro9.92m from a loss of Euro2.7m. Tight control continues to be exercised over costs and working capital.

UK: Roofing and insulation materials supplier SIG has returned to profit but it warned that its UK business is beginning to feel the bite of government austerity cuts.

The Sheffield-based group reported pre-tax profits of Euro9m in the year to 31 December 2011, compared to losses of Euro97m in 2010, as it outperformed its markets and benefited from restructuring. In the UK and Ireland, sales increased by 3.6% despite it reducing branch numbers by 34 to 330, as trade was boosted by a slight increase in its residential markets and by strong commercial demand in the south east of England.

Despite a return to profit, SIG warned that a reduction in public sector demand towards the end of the year will be more pronounced in 2012. The group sold three of its UK businesses in June 2011 as part of its plan to focus on its core markets of insulation and energy management, interiors and exteriors.

Underlying profits across the group were up by 27% to Euro98m. Revenues rose by 7.1% to Euro3.2bn, driven by a strong performance in mainland Europe, which accounts for more than half of SIG's business. Sales growth across the group has slowed to 1% in the first weeks of 2012 and it says it expects its overall markets to contract 2012 although it will continue to gain market share.

The group recently announced it is to close more of its stores, including 15 in the UK and Ireland, as part of plans to save Euro6m. It will also continue to open new sites, mainly under the Builders Express format in London and the south east having opened four over the past year.

UK: Superglass Holdings plc, an independent UK manufacturer of glass wool mineral fibre insulation products, has announced that sales in the first half of its fiscal year, which ended 29 February 2012, were significantly ahead of the first half of the preceding fiscal year. Despite the improvement the results were still behind the company's own forecast. The company said that it expects the second half of the fiscal year to be significantly better than the first half, with increased volumes, increased selling prices and the benefits of sales specification activity taking effect.

Superglass said that financial difficulties prior to its successful recapitalisation impacted trading adversely during the period under review, but that a shortfall in sales has been partially mitigated by lower costs. The board reviewed the progress achieved in the three months since the recapitalisation as 'satisfactory.'

On 21 February 2012 Superglass announced that its Finance Director, Tony Kirkbright, had resigned with immediate effect following the company's successful recapitalisation. The company board has started the process of recruiting his replacement. In the meantime David Wilton has been appointed as a consultant. He will report to board on the financial affairs of Superglass on an interim basis.

The company also said that it was still too early to assess the real impact of the transition the UK's new environmental policy, the Green Deal, which takes effect at the beginning of 2013.

UK: Jablite, the UK's leading manufacturer of expanded polystyrene insulation products, has appointed Silo, a new design studio, as 'designers-in-residence' at its Belvedere manufacturing site in east London. This unlikely relationship between an insulation manufacturer and the pair of designers, both MA graduates from the Royal College of Art, is taking both parties in unexpected and exciting directions.

"We were very impressed when we saw Silo's final degree show pieces made from EPS that we had given them," said Richard Lee, Managing Director at Jablite. "They were looking for sponsors to help them set up a studio. Instead of cash, we offered them studio space on our site." Jablite was keen to offer the pair a 'residency.'

"This is not something Jablite has ever done before but we are changing the way we work," said Lee. "Innovation of our products and operations is now central to our way of doing business and taking on Silo seemed an interesting step for us and them."

Through a process of trial and error, Silo has developed a new variant of EPS called 'Not So Expanded Polystyrene' (NSPS) and they have created some extraordinary and beautiful pieces with it, using handmade textile moulds.

"For us, the relationship with Jablite is a great opportunity. We can see how Jablite manufactures, the high standards it works to and the pressure of making quality products in large volumes to order and we can learn from that," said Oscar Wanless, one half of Silo. "Our aim is to use the same material and processes, but in an entirely new way, in a way that enables us to find new potential in a familiar material."

"Our challenge was to change the material properties to create a more durable, rigid and structural material that people will want to use and keep," added Silo's Attua Aparicio.

UK: A Euro230m government energy-efficiency scheme which aims to refurbish 14 million homes in the UK has been criticised for putting millions of homeowners in a worse position.

The Green Deal announced on 24 November 2011 will allow homeowners to take a loan to install insulation or other energy-saving measures from October 2012. It is intended that the bill savings from the measures will be larger than the loan repayments.

"But millions of hard-working households will lose existing subsidies for insulating their home and will have to borrow the costs of insulation at commercial rates instead," claimed Steven Heath, of Knauf Insulation.

Although subsidies remain for the fuel poor, Heath said that households struggling to pay rising fuel costs would be adversely affected. "The Green Deal initiative needs to be revised to ensure a sensible, effective transition over the next five years from current green energy subsidies," he said.

The Green Deal proposals allow for up to Euro170 to be given as a cashback offer to homeowners, but that is added to the loan. Richard Lloyd of Which? said, "It's crucial that the Government gets the Green Deal right. If it's not good value for consumers overall, short-term incentives will not be enough."

At the launch of the scheme Energy and Climate Change Secretary Chris Huhne said, "We want the Green Deal to be a game changer for British consumers who've been buffeted by global energy prices." It is hoped that the Green Deal will kick start around Euro16bn of private sector investment over the next decade until 2022.