Insulation industry news from Global Insulation

Europe: The European Commission (EC) has opened an in-depth investigation to assess whether the proposed acquisition by Mondi of two industrial packaging plants currently owned by Walki is in line with the EU Merger Regulation.

Mondi is a vertically integrated packaging and paper manufacturer that operates plants across Europe that manufacture extrusion coating products, such as those used for insulation production. The plants Mondi intends to buy from Walki also manufacture extrusion coating products. The EC has concerns that the removal of a key competitor may lead to less choice and higher prices for customers. The EC now has 90 working days, until 18 January 2016, to investigate whether these initial concerns are confirmed. The opening of an in-depth investigation does not prejudge the outcome of the investigation.

"The proposed merger could remove a key competitor for several types of packaging material. These are used in everyday items such as food packaging. I am concerned that the merger would lead to higher prices and less choice for these companies' clients and that the price increases could ultimately be passed on to consumers," said commissioner Margrethe Vestager, who is in charge of competition policy.

The EC's initial investigation has shown that the proposed acquisition of Walki's plants may remove a major competitive constraint on Mondi. Remaining competitors would have considerably lower production capacity than the merged entity and may not be able to match its product offering or proximity to key customers. The EC has concerns that these competitors may be unable to exert sufficient competitive constraint on the behaviour of the merged entity. This risks leading to a reduction of choice for customers and potentially to price increases for the products concerned.

Finland: Walki is answering increasing market demand for multilayer laminates by investing in a new production line at its Valkeakoski plant in Finland. According to Walki, there is an extensive growth potential, particularly in the construction business.

The new line, which, according to Walki executive vice president of construction Kari Salminen, will be 'unique on the market,' will start operations in the first quarter of 2016. It will be highly flexible and will cater to several different product segments in addition to the construction industry, such as consumer packaging and the pharmaceutical industry.
 
This flexibility will significantly shorten lead times.

The European Union's 202020 target, which, among other things, aims at a 20% improvement in energy-efficiency, is putting pressure on energy-efficient housing. Efficient insulation is key in keeping heating and cooling costs down.
 
Along with a recovery in the European economy, the construction business is expected to pick up, which will have a significant positive effect on the demand for insulation solutions, particular in those products requiring multilayer facings.

"With this investment, Walki strengthens its position as the premium supplier of multi-layer laminates globally. Further, the investment supports our strategy to focus on the growing segments of energy-saving laminates for building purposes and on value adding consumer packaging solutions," said Leif Frilund, president and CEO.