Insulation industry news from Global Insulation

US: Knauf Insulation has been granted a building permit to construct an US$8.7m warehouse and logistics facility in Shelbyville in the US state of Indiana. At a tax abatement hearing, local attorney Lee McNeely, who represented Knauf, told the Shelbyville Common Council that the building is part of an expansion that will bring back a major line producing light fibreglass to the insulation producing plant, known as the 602 line.

"The warehouse will replace an old manufacturing building," said Joey Viselli, vice president of marketing for Knauf. "It just gives us a lot more flexibility to have a warehouse on site," he said.

The building was the subject of a tax abatement request in November 2011, which was granted by the council. According to the tax abatement documentation, Knauf plans to tear down an existing building and then build the new 285,000ft², pre-fabricated metal warehouse and office space. Knauf's main US office is located in the same town.

The abatement documentation further added that, "Knauf intends to demolish an existing structure and build a new warehousing and office facility in order to support additional production for a growing customer base."

Knauf reported the total cost of the project to be US$10.9m. The City of Shelbyville permit is for US$8.7m in construction. The project is expected to add about eight jobs, creating an additional payroll of US$319,000.

In June 2011 Knauf closed its plant in Lanett, Alabama with the loss of 146 jobs. At the time, a company spokesman had said that Knauf was affected by an ongoing slump in housing construction. Viselli said that the closure of the Alabama plant is one element that changes the demands placed on the Shelbyville location.

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.