Insulation industry news from Global Insulation

Ireland: Kingspan, the insulation and building energy specialists, has reported a 19% increase in trading profits for the first half of 2012. The company made Euro52.7m in 2012 compared to Euro44.2m in the same period in 2011. Revenue remained stable rising by 3%, to Euro757m from Euro736m, but this represented a decrease of 1% on a constant currency basis. Earnings before interest, tax and amortisation rose by 13% to Euro71.9m from Euro63.5m.

By segment both the group's insulated panels and insulation boards businesses revenues remained stable at Euro361.1m and Euro232.1m respectively for the first half of 2012. By region the company's Irish revenue fell by 9.4%, to Euro32.8m from Euro36.2m. Revenue in the UK and the rest of Europe remained stable at Euro303.9m and Euro259.7m respectively despite volumes falling. Revenue in the Americas increased by 10.7% to Euro110.7m and in Australasia it increased by 52% to Euro50.3m.

In its business review the company explained that western Europe was 'hamstrung' by an unusually weak construction environment in the Netherlands, owing in the main to sentiment driven weakness in the residential sector. Germany performed well, as did the core central European markets but sales declined in Russia and Turkey.

"The trading environment across many of our geographies continues to be very uncertain, which is having a moderating impact, albeit with Kingspan continuing to outperform the general markets in which we operate," said chief executive of Kingspan, Gene Murtagh.

Ireland: Insulation materials group, Kingspan has bought ThyssenKrupp Construction from its parent group for Euro65m and the Middle East firm Rigidal Industries LLC for Euro31.4m. Both acquisitions are subject to local approval.

Kingspan said that it has entered into an agreement with ThyssenKrupp Steel Europe AG to acquire 100% of the share capital of the various companies which comprise ThyssenKrupp Construction Group, the leading European insulated panels business.

ThyssenKrupp Construction Group, which includes market-leading brands such as Hoesch, Isocab and EMS, has seven well-invested manufacturing plants in Germany, France, Belgium, Austria and Hungary. The business had sales in the year to 31 March 2012 of Euro315m and recorded an operating loss of Euro5.7m in the period. It has gross assets of around Euro101m.

Separately, Kingspan also announced that it has agreed to acquire 100% of the share capital of Rigidal Industries LLC, a leading Middle Eastern manufacturer of composite panels and roofing systems based in Dubai with an extensive route to market in the Gulf region. It had sales of Euro31.8m in the year to 30 June 2012.

"The ThyssenKrupp business will transform our mainland Europe insulated panels market presence in a region where market penetration is growing, rooted in the need for more energy efficient buildings. The Rigidal Industries LLC business is an excellent platform to develop our existing business and market presence in the Gulf region where demand is growing," said Gene Murtagh, Kingspan CEO.

US: Masco Corp has agreed to pay US$75m to settle a massive price-fixing case in the US. The settlement was agreed on the eve of a trial in US District Court in Atlanta to settle the antitrust class action with 369 independent fibreglass insulation contractors who are the company's competitors in the insulation installation business.

Masco's settlement augments an earlier US$37m settlement with four other fibreglass insulation manufacturers - Johns Manville, CertainTeed Corp, Knauf Insulation and Guardian Fiberglass Inc - who were accused of colluding with Masco and had also been named as defendants in the suit. Another manufacturer, Owens Corning, filed for bankruptcy protection before the suit was filed and was not named as a defendant.

In a news release Masco said that it has reached 'an agreement in principle' to settle the litigation. "While we continue to deny that the challenged conduct was unlawful and we do not admit to any wrongdoing this business decision eliminates the considerable expense and uncertainty of continued litigation and is in the best interest of the company and its shareholders."

US: Johns Manville (JM) has announced that it has purchased Industrial Insulation Group, LLC (IIG), a manufacturer of insulation for industrial, commercial and fireproofing applications.

IIG was formed in 2002 as a joint venture between JM and The Calsilite Group. JM previously owned a minority interest in IIG, but will now be wholly-owned by JM. IIG's product line complements JM's portfolio of insulation products, allowing JM to offer an even broader range.

"Expanding JM's interest in IIG is another way we are addressing customers' needs by offering the industry's most complete line of insulation products," said Todd Raba, JM's chairman, president and CEO. "IIG has a consistent track record of product performance, in keeping with the quality our customers expect from JM. We look forward to exploring opportunities to build on IIG's strong market position and expand its product portfolio."

IIG manufactures a wide range of insulation products for use in industrial, commercial and fireproofing applications and offers a portfolio of high-temperature insulation, ranging from mineral wool to perlite to calcium silicate.

"With our increased investment in IIG, JM will be able to offer the most complete line of mechanical insulation solutions to a broader commercial and industrial customer base," said Dave Skelly, director of sales for JM's Performance Materials business. "We look forward to continuing IIG's tradition of superior product performance and customer service."

JM does not plan to significantly change the operations at IIG. JM says that the existing IIG plants located in Brunswick (Georgia), Grambling (Louisiana), Fruita (Colorado), Phenix City (Alabama) and Houston (Texas) are a key part of its future commercial and industrial strategy. IIG chairman and chief executive Philippe Delouvrier will remain involved with the company in an advisory role.

"IIG is pleased to join the Johns Manville and Berkshire Hathaway families," said Delouvrier. "This next chapter in IIG history sets us up for continued success with greater opportunity for growth in existing and new markets."

"Philippe Delouvrier and his team have made IIG a recognised leader in industrial insulation," said Fred Stephan, vice president and general manager of JM's Insulation Systems business. "We're delighted that Philippe will remain involved with the business as we work to build on the success his team has established."

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.