Insulation industry news from Global Insulation

Russia: Denmark's Rockwool has opened a US$150m plant producing insulating materials in the Alabuga Special Economic Zone in Tatarstan. A second production line may be added to double capacity. The economic zone now has six plants from a variety of companies.

Eelco van Heel, Rockwool president and CEO, said at the opening ceremony that this was the group's biggest plant in the world with a capacity of 110,000t/yr, and its biggest investment in a new plant. Its products will supply the Volga region, Urals, Siberia and Kazakhstan. Russian Economic Development Minister Elvira Nabiullina said at the ceremony, "We aim to reduce the energy-output ratio of GDP to 40% by 2020 and that means using energy-saving technologies." Heat consumption is currently high in Russia - it takes roughly three times more energy per cubic meter to heat buildings in Russia than in Scandinavia, which has a comparable climate.

US: Dow Chemical Company, the world's second-largest chemical producer, plans to close four plants producing Styrofoam. Dow Chemical will close plants that make the insulation material in Portugal, Hungary and the US state of Illinois and it will idle a Styrofoam facility in the Netherlands.

The decision comes as part of a cost saving exercise, including a cut of 900 jobs and a US$350m restructuring charge, to counter weakness in the European construction market and exit a loss-making business in Brazil. The moves are aimed at saving US$250m/yr.

Dow Chemical had cut production during the final quarter of 2011 to levels not seen since early 2009. It cited concerns about ebbing demand in Europe and the outlook in China during a recovery that Chief Executive Andrew Liveris described as 'jagged'. The job cuts represent around 1.7% of Dow's global work force. The effort is part of a broader streamlining program unveiled by the chemical giant in 2011.

Uzbekistan: The Uzbek Metallurgical Plant, based in Bekabad in eastern Uzbekistan, has announced that it will start production of insulation materials by 2014.

The company has started a feasibility study of a US$12m project, which will allow the production of thermal insulating materials, such as mineral wool, mats, and plates. The estimated capacity of the plant will be 10,000t/yr. One of the basalt deposits in the Tashkent region will serve as a raw material base for the new production facility.

The production of thermal insulation is included in a list of investment projects approved by Uzbek President Islam Karimov. According to a representative of the plant, a tender for the purchase of the necessary equipment will be announced in the second half of 2012. The project will be financed through the plant's own funds worth US$3m and loans from Uzbek banks worth US$9m.

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.

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.