Insulation industry news from Global Insulation

Poland: Finland’s Paroc is spending around Euro60m on an expansion project at its Trzemeszno mineral wool plant. A new 70,000t/yr stone wool production line will be built at the site. The upgrade is expected to be completed in 2019.

"This is an important step for Paroc to continue the profitable growth. Demand for insulation has been increasing, especially in the Central and Eastern Europe. With increased production capacity we are able to grow together with our customers and improve our competitiveness and efficiency," said Kari Lehtinen, chief executive officer (CEO) of Paroc.

Finland: Following negotiations with staff Paroc has decided to shut down its Oulu stone wool plant in July 2017. The closure will involve the transfer and centralisation of support functions currently in Oulu to other Paroc plants and locations. Production of building insulation will be moved mainly to the Paroc plant in Parainen and support functions will be moved to other Paroc locations. 64 members of staff will lose their jobs, including all of the production workers at Oulu, and five staff will be moved to other locations.

“The decision to shut down the factory was difficult due to the considerable impact it will have on the personnel. However, the utilisation rate of the current capacity of Finnish stone wool factories is too low to ensure competitive operations in Finland. The factory located in Oulu is old and, in addition to the already high cost structure, continuing operations would require significant investments in the near future,” says Kari Lehtinen, chief executive officer of Paroc Group.”

Finland: Paroc has described 2016 as ‘fairly challenging’ as its net sales fell slightly to Euro376m and its earning before interest, taxation, depreciation and amortisation (EBITDA) rose by 4% to Euro76.5m in 2016 from Euro73.3m in 2015. Despite reporting an improvement in construction activity in the second half of the year, sales fell in Russia. The insulation producer solid its Paroc Panel System (PPS) business to Kingspan Group in December 2016 and it announced plans to shut its Oulu stone wool plant in January 2017.

Russia: Finland’s Paroc has launched its Extra Light stone wool insulation product. The release is part of a strategy to diversify its offering to the Russian insulation and construction market. The insulation producer operates an insulation plant at Tverskaya Oblast.

Finland: Paroc Group is planning to shut down the operations of its stone wool plant in Oulu. The decision has been blamed on overcapacity of Finnish production without a similar increase in consumer demand. The plan also includes transferring and centralising support functions to other Paroc factories at other locations. Approximately 70 workers at the site will be affected by the decision and negotiations are on going.

“Starting the cooperation negotiations is very unfortunate. However, the utilisation rate of Finnish stone wool factories’ current capacity is too low to ensure competitive operations in Finland. The factory located in Oulu is an old one, and, in addition to the already high cost structure, continuing its operations would require significant investments in the near future,” said Kari Lehtinen, chief executive officer of Paroc Group.

Finland: Paroc Group has agreed to sell sale its Paroc Panel System (PPS) business to Kingspan Group. The personnel of PPS will all be transferred to the new owner. Along with the transaction, the parties have agreed on commercial cooperation in stone wool supply to the PPS factory in Parainen. No value for the deal has been disclosed.

"The arrangement supports the focus of Paroc on building and technical insulation. We will continue to seek market expansion and growth possibilities in those areas,” said Kari Lehtinen, chief executive officer of Paroc Group.

PPS is a subsidiary of Paroc Group Oy. In 2015, PPS sales totalled Euro47m, with about 100 employees in Finland, Sweden, Norway, Denmark, and Germany. Paroc Panel System panels are manufactured in Parainen, Finland.

Russia: Restrictions on imports have stopped Paroc from transporting stone from its Lapinlahti in Finland to its insulation plant in Russia. Joakim Westerlund, Paroc's chief operating officer, said that the import restrictions on crushed rock material were imposed with relatively short notice in summer 2016 according to the Savon Sanomat newspaper. Subsequently the insulation producer has had to source stone locally in Russia. Quarrying at Lapinlahti for Paroc by Fjäder Group has previously totalled 20,000t/yr.

Finland: Paroc’s net sales for its building insulation division has risen by almost 1% year-on-year to Euro215m in the first nine-months of 2016 from Euro213m in the same period of 2015. However, on an adjusted basis for comparable insulation rates the insulation producer says that its sales grew by 2.4%. It reported sales volumes growth in most markets except for the Baltic countries and Russia. Overall sales for the company rose slightly to Euro301m, boosted by growing sales for technical insulation.

Poland: Paroc Group has upgraded its mineral wool plant in Trzemeszno to increase its production capacity with an investment of over Euro13m. “Up till now, some of the Paroc’s technical insulation solutions had been produced only in Finland,” said Joakim Westerlund, Chief Operating Officer at Paroc. “Shipping from Poland, combined with the fact that more products can now be transported on one truck thanks to new technology, not only will save time and resources of our customers, but also fits in our sustainability and energy efficiency policy.”

The investment marks a continuation of Paroc’s long-term development strategy in its Baltic and Central Europe area. Since 1998, when the Polish Paroc production plant was set-up, the company has invested over Euro140m in the Trzemeszno plant.

Lithuania: Paroc has announced that it does not expect its revenue from its operations in Lithuania to grow in 2016. The mineral wool manufacturer saw its profit in the country fall by 28.3% year-on-year to Euro4.24m in 2015 from Euro5.92m in 2014. Its revenue fell by 7.1% to Euro42.9m, according to BNS News.

"The income from sales within the country increased year-on-year, while exports to Russia, Belarus and Latvia shrank considerably. The decline was in part compensated by the sharp growth of supplies to Poland," Paroc said in its annual report. According to the statement, the company's 2016 income and profit are not expected to rise.