Insulation industry news from Global Insulation

US: Owens Corning (OC) has reported that its net income sank by half in the second quarter of 2012, as the construction and industrial-materials maker's sales softened and expenses rose. OC reported a net income of US$39m for the three months ending on 30 June 2012 compared to US$78m for the same period in 2011. Revenue fell by 4% to US$1.39bn from US$1.45bn.

OC's management has said that it no longer expects that its adjusted earnings before interest and taxes will grow in 2012, citing a weaker outlook for its roofing segment. However, the company anticipates that its profits will improve in the second half of 2012 versus the first six months of 2012. OC's operating expenses climbed by about 7% to US$154m. Higher asphalt costs ate into the company's roofing unit's profits, management noted.

Looking ahead, OC anticipates US homebuilders will break ground in 2012 on between 700,000 to 750,000 homes. On the basis of that outlook, the company expects its insulation segment will significantly narrow its losses in 2012.

US: Masco Corp. is due to face a class action antitrust lawsuit at a district court in Atlanta on 23 July 2012. The lawsuit will examine whether the leading US insulation installer has abused its market dominance.

Nearly 370 companies that install insulation in homes accuse Masco of having conspired with makers of fibreglass insulation between 1999 and 2003 to ensure that other installers paid much more than Masco for the material. The suit argues that Masco agreed to accept price increases so long as the manufacturers charged other installers even more when prices went higher, preserving Masco's cost advantage.

The insulation installers are now seeking about US$250m in damages. Under antitrust law any damages awarded are automatically tripled. The four makers of insulation - Johns Manville, CertainTeed Corp., Knauf Insulation GmbH and Guardian Fiberglass Inc. - that were also named in the suit against Masco previously agreed to pay a total of US$37.3m to settle claims made by the insulation installers in 2008.

A Masco spokeswoman said that the allegations are 'baseless' and that the company, "intends to continue to defend itself vigorously." In a recent securities filing Masco said it can't 'reliably estimate' the damages that could result from an adverse ruling in the case.

Masco is the biggest installer of insulation made by other companies in new homes in the US. Its market share has been estimated at 40-60%.

US/Denmark: The board of directors at Denmark's Rockwool have approved a plan to establish the group's first production facility in the United States. The new plant will be constructed in Marshall County, Mississippi, approximately 50km from Memphis, Tennessee. Subject to the successful completion of due diligence in the coming months, the plant is expected to be ready in 2014 and will, when reaching full capacity, be able to deliver more than 100,000t/yr of stone wool insulation. The investment is expected to total around Euro125m.

Commenting on the expansion, Rockwool CEO Eelco van Heel said, "We have seen strong interest from big DIY chains to offer our products to their customers. The unique thermal, acoustic and fire safe qualities of our stone wool insulation are appreciated by their customers. With this new plant in the southern part of the US, we are happy to expand our geographical coverage to new regions of the continent where we are currently not present. The additional capacity will also support our strong growth in other key insulation markets such as commercial buildings, flat roofs and industrial applications".

Rockwool has seen good sales growth in North America in recent years despite the otherwise troubled US construction sector. To date the US market has been serviced from the group's two factories in Canada. In 2011 sales in North America accounted for 8% of total group sales. This share is expected to grow in the coming years.

US: Knauf Insulation has been granted a building permit to construct an US$8.7m warehouse and logistics facility in Shelbyville in the US state of Indiana. At a tax abatement hearing, local attorney Lee McNeely, who represented Knauf, told the Shelbyville Common Council that the building is part of an expansion that will bring back a major line producing light fibreglass to the insulation producing plant, known as the 602 line.

"The warehouse will replace an old manufacturing building," said Joey Viselli, vice president of marketing for Knauf. "It just gives us a lot more flexibility to have a warehouse on site," he said.

The building was the subject of a tax abatement request in November 2011, which was granted by the council. According to the tax abatement documentation, Knauf plans to tear down an existing building and then build the new 285,000ft², pre-fabricated metal warehouse and office space. Knauf's main US office is located in the same town.

The abatement documentation further added that, "Knauf intends to demolish an existing structure and build a new warehousing and office facility in order to support additional production for a growing customer base."

Knauf reported the total cost of the project to be US$10.9m. The City of Shelbyville permit is for US$8.7m in construction. The project is expected to add about eight jobs, creating an additional payroll of US$319,000.

In June 2011 Knauf closed its plant in Lanett, Alabama with the loss of 146 jobs. At the time, a company spokesman had said that Knauf was affected by an ongoing slump in housing construction. Viselli said that the closure of the Alabama plant is one element that changes the demands placed on the Shelbyville location.

US: Demand for insulation in the US is forecast to rise by 7.8%/yr to reach US$8.9bn in 2016, according to a new report by the Freedonia Group. The report says that the advance will be driven by a rebound in building construction expenditures from a depressed 2011 base. Further growth will be spurred by changes in building codes and continuing consumer interest in reducing energy consumption and utility bills. It also says that home and building owners will add or upgrade insulation to achieve these goals.

Freedonia says that the residential market will post the most rapid gains until 2016, advancing at a double-digit pace as housing starts to rebound. Moreover, builders will construct homes with larger amounts of insulation to make them more desirable to potential buyers. Residential insulation demand will also be supported by the attic re-insulation and home improvement and replacement markets. Insulation demand in the non-residential market will reportedly also see solid advances. Rebounding non-residential building construction expenditures, particularly in the office and commercial segments, will promote gains.

Fibreglass insulation accounted for the largest share of insulation demand in 2011 with 48%. The report says that fibreglass insulation will remain the market leader in 2016, with demand rising by 8.1%/yr to US$4.4bn. Growth will be spurred by a rebound in the residential market.

Demand for foamed plastic insulation, which accounted for the second largest share of the market in 2011, is expected to rise by 7.3%/yr to US$3.9bn in 2016. Advances will be driven by the rebound in building construction spending.

Demand for radiant barrier and reflective insulation is anticipated to grow by 8.7%/yr to US$190m in 2016. The rebounding housing market will boost demand, with further gains supported by increases in industrial and non-residential building construction spending. Growth will be concentrated in the south and west of the country regions, as structures in those regions are more often exposed to sunlight.

US: Owens Corning (OC) has swung to a fourth-quarter profit due to prior-year acquisition-related costs as the company continued to see stronger sales in its building materials. OC saw sales improve for its roofing and insulation materials in 2011 despite the ongoing slump in the US housing market. A focus on costs has helped support its bottom line.

OC reported a profit of US$50m for the fourth quarter of 2011 from a year-earlier loss of US$110m. The year-earlier period included a net US$135m in asset-sales losses and acquisition and restructuring-related charges. Its revenue increased by 2.4% to US$1.2bn and its gross margin rose to 19.2% from 17.1%. The building materials segment, OC's biggest area, reported net sales growth of 8%, including an increase of 8.7% in insulation sales.

Chairman and Chief Executive Mike Thaman said that OC anticipates improved US housing starts and modest growth in the global economy in 2012. The company expects that a strong performance in its building materials business will more than offset impacts of near-term market challenges in its composites business.

US: CalStar Products has appointed Joel Rood as its new CEO. Rood's experience includes senior roles at industry leaders in the gypsum wallboard, insulation and fiber-cement industries. CalStar develops and manufactures sustainable masonry products that reduce the energy and carbon footprint of the built environment.

Prior to joining CalStar, Rood was General Manager for CertainTeed Canada. Earlier, he was the general manager of the Southern US Division at James Hardie Corp. "We're thrilled to have Joel joining us," said CalStar Products Chairman Paul Holland. "Joel's executive skills, strong core values and record of managing growth and innovation across the building products industry make him the perfect fit to lead CalStar as we scale-up the business."

US: The Environmental Claims Service of UL Environment (ULE) has certified that Knauf Insulation's products contain 55.7% of post-consumer waste.

"As one of the first manufacturers in our industry to work with ULE on this type of initiative, we are proud to announce the validation of environmental and sustainability claims for our glass wool products," said Scott Miller, director of sustainability at Knauf Insulation. "Independent, third-party validation provides our customers with confidence in the sustainable attributes of our insulation products. Knauf Insulation, as a company, will continually adapt to the constantly changing atmosphere of environmental sustainability and stay in the forefront with our sustainability platform."

Steven Wenc, president of ULE, said, "We applaud Knauf Insulation for their commitment to diverting waste to make insulation. Knauf Insulation is also committed to building confidence and trust in the marketplace by validating their claims with an independent, third party."

US: Johns Manville (JM) officially broke ground on a new commercial roofing single ply membrane manufacturing facility in Milan, Ohio on 8 July 2011. The production facility will manufacture ethylene propylene diene monomer (EPDM) roofing products beginning in the second quarter of 2012.

During the groundbreaking ceremony - which hosted local officials, members of the Milan community, media and JM leadership - JM Chairman, President and CEO, Todd Raba noted that "This is a great day for JM and it's really incredibly gratifying to see the level of community support. JM has a strong presence in the state of Ohio and we are excited to be part of the Milan community." This facility marks the company's third facility in Ohio, with representation in three lines of its North American businesses of Insulation Systems, Engineered Products and Roofing Systems.

Raba also noted that, "This is the right time to invest in enhancing our product portfolio and JM now has one of the broadest offerings of commercial roofing products in the industry."

"Everything starts with our customers," stated Bob Wamboldt, vice president and general manager of JM's Roofing Systems business. "With over USD125m invested in our commercial roofing business over the past five years, this is really the crowning jewel of a five-year effort. JM has dedicated substantial resources to underscore our commitment to the single ply business and ensure a strong future for our customers in this segment of the commercial roofing industry."

US: Owens Corning has released its 5th annual Sustainability Report, outlining the company's environmental footprint reduction performance. "Our 2010 Sustainability Report demonstrates Owens Corning's continued focus on and progress towards improvements in greening our operations and products and accelerating energy efficiency and renewables penetration in the built environment," said Vice President and Chief Sustainability Officer Frank O'Brien-Bernini. "We have met three of our seven goals already and are confident that six of the seven goals will be achieved by 2012."

Among the key accomplishments highlighted in the report is a 24% intensity reduction in greenhouse gas (GHG) emissions compared to 2009 levels. The company removed 950,000t of CO2 from its operations in 2010, which is equivalent to eliminating the CO2 impact of more than 170,000 passenger cars. The report also detailed progress towards intensity reductions in energy usage, and reductions in nitrogen oxides, volatile organic compounds, particulate matter, waste-to-landfill contributions and water usage.

The company took the opportunity to launch a new set of 2020 goals designed to raise the bar on its commitment to sustainability. The announced 2020 goals will target reductions in energy, greenhouse gas, water, toxic air emissions, particulate matter and waste-to-landfill measures, as well as supplier sustainability and life cycle assessments.

"These new goals raise the bar on our commitment to sustainability and reflect an increasingly holistic approach that encompasses how our company operates, the attributes of our products and our desire to affect change by partnering with our customers and suppliers to deliver sustainable solutions," added O'Brien-Bernini.

The disagreement comes at the same time as the publication of an article in the journal Respirology that warns of massive rises in deaths from asbestos-related lung diseases in Asia in the coming decades. Dr Ken Takahashi, Acting Director of the World Health Organisation Collaborating Centre for Occupational Health (WHOCCOH) and his team put together data on asbestos use in 47 Asian countries for the report.

Asian countries accounted for 64% of the global consumption of asbestos in 2001-2007, a striking increase from 14% between 1920 and 1970. This is the result of unregulated asbestos import and use in many Asian countries.