Insulation industry news from Global Insulation

Russia: TechnoNICOL has installed a new glass furnace and polymerisation chamber at its Serpukhov glass wool plant in Moscow Oblast. AK&M News has reported that that the upgrade will expand the plant’s glass wool capacity to just under 2Mm³/yr and enable it to produce a total of 300 different types of insulation. TechnoNICOL is investing US$18m in the project, which uses equipment from Russian suppliers and is intended to reduce the sanctioned nation’s reliance on imports.

Kazakhstan/Russia: The government of Kazakhstan says that it now expects Germany-based Knauf Group to relocate its Russian business to Kazakhstan. It says that this is due to the on-going Russian invasion of Ukraine, which initially led Knauf to freeze investments in the sanctioned state and suspend its trade between it and the EU from March 2022.

Deutsche Welle News has reported that Knauf Group ‘did not confirm’ the Kazakh government’s contention. In defending its decision to so far remain in Russia, Knauf Group’s chair Alexander Knauf said “It’s not about money for us, it’s about 4000 employees. Loyalty to these people means to me that I won’t send them off into an uncertain future.” Russia reportedly contributed 10% of the group's turnover in 2022.

Russia: TechnoNicol expects to commission its upgraded Khabarovsk stone wool insulation plant later in 2023. Local press has reported that the on-going upgrade involves replacement of the plant's rock melting furnaces and fibreisation chambers. When commissioned, the upgraded plant will produce insulation using a biopolymer bonding agent. The producer expects to export its products to the Japan and South Korea markets.

Belarus/Russia: US-based Owens Corning has agreed to sell its Belarusian and Russian assets to materials and technologies company Umatex. Umatex is a subsidiary of Russian state-owned nuclear power provider Rosatom. World Service Wire News has reported that the assets in question include the Gus-Khrustalny glasswool plant in Vladimir Oblast and the Tver mineral wool insulation plant in Tver Oblast, both in Russia.

Owens Corning chair and CEO Brian Chambers said "This announcement represents the final step in our process to fully exit our operations in Russia. I would like to thank our colleagues in Russia for their contributions to our company and customers over the years."

Ukraine: Rockwool confirmed on 5 December 2022 that builders used some of its products in rebuilding work in Russian-occupied Mariupol, Donetsk. Rockwool clarified that it did not supply the materials, which it says had been delivered by a third party.

Rockwool's communications manager Michael Zarin said it is 'almost impossible' for the company to control distributors' activities. Zarin said "The company strongly condemns the war in Ukraine and hopes for an early solution."

Denmark/Russia: The Association of Ukrainians in Denmark has launched a protest outside Rockwool's headquarters in Hedehusene to demonstrate against the company's continuation of activities in Russia via its local subsidiary. Local press has reported that Rockwool allegedly told the Association of Ukrainians in Denmark that divesting the Russian business would allow its profits and future cash flows to remain in Russia.

In October 2022, Rockwool clarified that it remains out of contact with its Russian business and views their relationship as a mere ownership of shares.

Russia: Denmark-based Rockwool says that it is entirely out of contact with its Russian business, under on-going EU trade sanctions against the country. As such, the group now views its relationship to its Russian plants merely as an ownership of shares.

EnergiWatch has reported that Saint-Gobain has described a similar situation in relation to its operations in the sanctioned nation. The France-based producer said "The Russian part of our business has lived a self-governing and strangled existence since the start of the invasion. This happened to secure jobs for our employees." It added "We have stopped all investment projects."

Russia: The Ministry of Industry and Trade of the Russian government says that building materials are in high supply, but projected possible future shortages, beginning in 2024. Russian construction remains dependent on imports, and the government says that it will look to further develop the domestic production capacity of insulation and other materials from 2024.

Belarus: Gomelstroymaterialy has entered talks with the administration of St Petersburg’s Krasnogvardeyski District over the possible start of exports of insulation and wall panels to the Russian population centre. Business World Magazine has reported that construction, especially of social facilities, is also an area in which the local government officials say they would like to advance cross-border cooperation.

Denmark: Rockwool recorded consolidated sales of Euro924m in the first quarter of 2022, up by 38% year-on-year from first-quarter 2021 levels. The group’s earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 12% year-on-year to Euro155m.

CEO Jens Birgersson “High demand and sales price increases drove double-digit revenue growth across almost all business units. While not materially affecting sales performance at this point, the terrible war in Ukraine and the challenging geopolitical situation are contributing to an already stressed global economy. Even with the price increases, the soaring energy, material, and logistics costs diluted margins in the first quarter. This will necessitate further price increases across the businesses.” Birgersson added “We expect to restore margins in the coming quarters.”

In its Outlook 2022, Rockwool predicted full-year net sales growth of 20 – 25% in local currencies and Euro425m-worth of group investments during the year, excluding acquisitions. It says that its business in Russia continues operating on a stand-alone basis, in order to avoid nationalisation and loss of its intellectual property.