Insulation industry news from Global Insulation

US: Owens Corning has lost US$56m in the fourth quarter of 2012, pulled down by hefty debt-related and restructuring charges. In the same period of 2011 it reported earnings of US$50m. The construction and industrial-materials company said it expects to get a boost in 2013 from an improving US housing market and moderate global growth.

Net sales for the fourth quarter of 2012 fell year-on-year by 3% to US$1.16bn from US$1.20bn. For 2012 as a whole Owens Corning posted a slight decline in net sales to US$5.17bn from US$5.34bn.

Net sales for the company's insulation business rose by 7% to US$413m in the fourth quarter of 2012 from US$US$387m. For 2012 as a whole net sales in insulation rose by 7% to US$1.47bn from US$1.37bn. The company said that its insulation business should benefit from the growth in residential construction, along with higher utilisation rates and better pricing. Yet Owens Corning noted that prices remain significantly below historical levels.

US: Chemical maker Huntsman Corp has seen revenue from its polyurethane division rise by 10% to US$4.89bn in 2012 from US$4.43bn in 2011. The company attributed this to higher sales of the foam insulation constituent. The polyurethane division also benefitted from increased prices, although this was partly offset by the strength of the US Dollar against the Euro.

Overall revenue stayed stable at US$11.2bn in 2012 compared to US$11.2bn in 2011. Gross profit rose by 11% to US$2.03bn from US$1.84bn. Adjusted earnings before non-recurring items, depreciation and amortisation (EBITDA) rose by 15% to US$1.40bn from US$1.21bn.

"Our 2012 adjusted EBITDA of US$1.40bn represents record earnings for our current configuration of businesses. I am very enthusiastic about the direction in which the company is headed. Within our largest division, Polyurethanes, our MDI business is growing at attractive rates and future prospects are pointing towards tighter market conditions," commented president and CEO Peter R Huntsman.

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.

China: Demand for insulation materials in China is projected to grow 9.4%/yr to meet US$10.6bn in 2016, according to a new study from the Beijing office of The Freedonia Group. The Cleveland, US based industry research firm has also predicted in its report 'Insulation in China' that continued increases in building construction and output in the manufacturing sector will drive gains. Further growth will be spurred by changes in building codes to reduce energy consumption in building applications as well as efforts to reduce energy use in manufacturing processes.

The study valued demand in China for insulation in 2011 at US$6.74bn. This broke down into foamed plastic (US$5.52bn, 82%), fibreglass (US$386m, 6%), mineral wool (US$386m, 6%) and other products (US$450m, 6%). Predicted demand for 2016 was broken down as follows: foamed plastic (US$8.62bn, 82%), fibreglass (US$627m, 6%), mineral wool (US$643m, 6%) and other products (US$675m, 6%).

Building construction markets will continue to account for more than two-fifths of China's total insulation demand. The residential and non-residential segments will each expand at 10%/yr until 2016, supported by healthy growth in building construction. New multi-family housing starts, driven in large part by China's continuing urbanisation, and strong fixed investment activity in office, commercial, institutional and other highly insulated structures such as power and petrochemical plants will boost market gains for insulation materials. In addition, improvement and replacement of insulation in existing housing in order to raise energy efficiency, as well as to enhance comfort, will continue to promote market gains. Concerns about energy loss will lead to gains in all markets as the intensity of use of insulation increases.

Demand for insulation in the industrial and heating, ventilation and air conditioning (HVAC) equipment market will rise 8.4%/yr until 2016, trailing overall growth. Strong increases in investment in industrial and HVAC equipment as a result of continued industrialization in China will boost demand. Efforts to reduce energy consumption and costs in these applications - by both producers and the government - will also spur demand gains in this market. Demand in other important markets will be driven by rapidly expanding output of insulation-containing appliances (e.g., refrigerators and freezers) and transportation equipment.

New Zealand splits Christchurch US$34m rebuild contract between Winstone and Knauf

New Zealand: A US$34m New Zealand government procurement deal to supply wallboard for the rebuilding of Christchurch has been split between New Zealand's only wallboard manufacturer, Winstone Wallboards, and multinational manufacturer Knauf. Home affordability and a lack of competition for building supplies in the country were cited by a Productivity Commission report as key issues in making the decision

"Having Knauf set up shop in New Zealand will see increased industry competition that will provide consumers with more choice and could potentially drive down prices," said Economic Development Minister Steven Joyce. The government expects to save around 6% on wallboard costs.

Knauf, the world's second-largest wallboard manufacturer and one of only seven firms that dominate four-fifths of global production, already has a New Zealand operation, selling wool-based insulation material. The contracts will cover wallboard and associated fasteners, adhesives and jointing compounds being used in the Earthquake Commission and Southern Response Earthquake Services Limited reconstruction programmes. The contracts were let after a competitive tender that attracted nine bids.

Belgium: Spray foam manufacturer, Icynene Inc, has formally opened its first European office in Brussels.

"Over the past 18 months, Icynene has experienced a significant growth in Europe, which we expect to continue at the same pace as we look to new markets in the region. Thermal regulations have become more stringent and are now focused on air-tightness and healthy insulation products. Icynene nicely fits into this new environment and brings alternative solutions to traditional insulation." said Bertrand Lauret, Managing Director of Abington Gate Europe, Icynene contact for Europe, Africa and the Middle East.

The office opened on 7 January 2012 following negotiations with the Brussels Science Incubator (BLSI). The office will initially accommodate two staff with an expansion expected later in 2013.

Established in 1986, Icynene builds energy-efficient residential and commercial structures in over 31 countries. Its products include light density open cell and medium density closed cell spray foam insulation for both insulation and air barrier purposes.