Insulation industry news from Global Insulation

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.

UK: Superglass Holdings plc, a Stirling-based manufacturer of glass fibre insulation solutions, has announced that its performance in the second half of the year ending 31 August 2012 will be below its first half performance due to extremely challenging market conditions. The company also reported the appointment of Allan Clow as its new finance director.

According to a trading statement, business in the second half period has been disappointing and demand in the market is subdued. Sales through CERT (Carbon Emission Reduction Target) related activity have been particularly disappointing. Net sales in the second half of the current financial year are lower than anticipated in the interim report as reported in April 2012 and will be below the level reported for the first half of the year ending 31 August 2012. Average daily sales tonnages have declined since a relatively strong performance in March 2012. Financial performance has also been adversely affected by a short-term increase in overhead costs incurred as a result of the turnaround process.

Meanwhile, cost reduction at the company remains focused on Project Phoenix, a capital investment programme that was central to the refinancing completed in December 2011.

US: Masco Corp. is due to face a class action antitrust lawsuit at a district court in Atlanta on 23 July 2012. The lawsuit will examine whether the leading US insulation installer has abused its market dominance.

Nearly 370 companies that install insulation in homes accuse Masco of having conspired with makers of fibreglass insulation between 1999 and 2003 to ensure that other installers paid much more than Masco for the material. The suit argues that Masco agreed to accept price increases so long as the manufacturers charged other installers even more when prices went higher, preserving Masco's cost advantage.

The insulation installers are now seeking about US$250m in damages. Under antitrust law any damages awarded are automatically tripled. The four makers of insulation - Johns Manville, CertainTeed Corp., Knauf Insulation GmbH and Guardian Fiberglass Inc. - that were also named in the suit against Masco previously agreed to pay a total of US$37.3m to settle claims made by the insulation installers in 2008.

A Masco spokeswoman said that the allegations are 'baseless' and that the company, "intends to continue to defend itself vigorously." In a recent securities filing Masco said it can't 'reliably estimate' the damages that could result from an adverse ruling in the case.

Masco is the biggest installer of insulation made by other companies in new homes in the US. Its market share has been estimated at 40-60%.