exam study star - acs industry focus pack - nov 2010
TRANSCRIPT
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Industry Research - Loft Insulation Industry
November 2010 Sitting – Advanced Case Study
Produced 19 October 2010
All Rights Reserved ExamStudyStar © 2010
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TABLE OF CONTENTS
Introduction .......................................................................................................................... 3
UK Loft Insulation Industry .................................................................................................... 4
1. Introduction – Loft Insulation ............................................................................................. 4 1.1 Major Types ........................................................................................................................................ 6
1.2 Major Benefits ..................................................................................................................................... 7
1.3 Savings................................................................................................................................................. 7
1.4 Loft Insulation Grants.......................................................................................................................... 8
1.5 Insulation Market Structure* ............................................................................................................ 12
1.6 Market Size – UK Loft Insulation ....................................................................................................... 13
1.7 Major Players in the market ............................................................................................................. 15
Rockwool Limited ................................................................................................................................................ 15
Knauf Insulation .................................................................................................................................................. 17
Kingspan Insulation ............................................................................................................................................. 19
Superglass Insulation .......................................................................................................................................... 21
Excel Industries Limited ...................................................................................................................................... 21
1.8 Impact of Recession* ........................................................................................................................ 23
2. Global Insulation Market ................................................................................................. 24 2.1 Europe Insulation Market ................................................................................................................. 24
2.2 North America Insulation Market ..................................................................................................... 25
2.3 China and South East Asia Insulation Market ................................................................................... 26
2.4 Russian Insulation Market................................................................................................................. 26
3. Regulations and Industry Bodies ...................................................................................... 27 3.1 National Insulation Association (NIA) ............................................................................................... 28
3.2 British Board of Agrément (BBA) ...................................................................................................... 29
4. Mergers and Takeovers .................................................................................................... 30
5. Demographics* ................................................................................................................ 31
6. Marketing ........................................................................................................................ 32
7. Technology ...................................................................................................................... 33
8. New Products .................................................................................................................. 35
9. Suppliers ......................................................................................................................... 39
10. Corporate Social Responsibility ...................................................................................... 41
11. Ethics ............................................................................................................................. 43
12. General News Articles .................................................................................................... 46
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Introduction
Students sitting the Advanced Case Study are required to demonstrate an understanding of the
case industry, but how do you demonstrate this knowledge in your exam report? The answer is
to insert short, crisp industry examples that support and bring to life the points you are making
in your report. This is where our real world examples can help. We produce industry research
which you can learn and then add into your report in your own words.
You should look to include at least 4 examples in your report, and ideally aim for between 5 and
8 if time allows.
Remember it is important to use examples well to support the arguments you are making in the
exam, rather than just name drop.
You should also appreciate that as well as learning specific examples you need to gain a general
understanding of the industry so that you do not give unrealistic recommendations on exam
day. Our report helps you out here also.
To quote the Advance information:
In order to be successful, you will need to:
Demonstrate your knowledge of the case material and make use of your research
Carry out relevant analysis of the problems and your proposed solutions
Apply your judgment on the basis of the analysis that you have carried out
Draw conclusions from your analysis and judgment and develop them into practical commercial recommendations.
Good luck, and if you have any queries please do not hesitate to contact us at:
All the best, The StudyStar Team
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UK Loft Insulation Industry
1. Introduction – Loft Insulation
In the United Kingdom (UK), it is important to keep a house warm during the cold
season/winter and cut down on the cost of heating. Most of the heat in a house is lost through
the roof, walls, etc. and is therefore necessary to provide insulation.
Figure 1: Loss of Heat
Source: http://www.insulationgrants.co.uk
Loft insulation is an important and effective method to save energy, money, and keep the
indoors warm. Consuming less energy reduces the carbon dioxide (CO2) emissions which are
one of the major contributors to climate change.
Loft insulation is a layer of insulation placed between the roof of the house and the rooms
generating the heat. It can be applied either to the roof of the house or the loft floor; thicker
the loft insulation, the warmer the house. Loft insulation is effective up to 40 years.1
1 http://www.energysavingtrust.org.uk/Home-improvements-and-products/Home-insulation-glazing/Loft-
insulation
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According to the National Insulation Association (NIA), it is estimated that 15 million lofts would
require insulation in the future. It states that if everyone in the UK installed 270mm of loft
insulation, they could save around £520 million and nearly three million tonnes of CO2 every
year. NAI recommends carrying out loft insulation by professionally trained and experienced
NAI members in order to avoid any technical risks.2
Figure 2: Loft Insulation (1)
Source: http://www.loftcavityinsulation.co.uk/loft-insulation
2 http://www.nationalinsulationassociation.org.uk/media-and-
information/uploads/news/id97/Improve%20insulation,%20save%20energy%20and%20money-web.pdf
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Figure 3: Loft Insulation (2)
Source: http://www.loftcavityinsulation.co.uk/loft-insulation
1.1 Major Types
The three major types of British Standard loft insulating materials include:
Mineral wool (glass or rock)
Blown mineral wool (glass or rock)
Blow cellulose
There are also other insulation materials which are used for loft insulation:
Polyurethane (PU)
Polyisocyanurate (PIR)
Expanded polystyrene(EPS)
Extruded polystyrene (XPS)
Cellulose fibre
Sheep’s wool
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In the UK, most people receive large government grants that cover the cost of insulating their
house, only when they use certain loft insulating materials.3
1.2 Major Benefits
The major benefits of loft insulation include:
Reduction of gas and electricity bills
Reduction of the carbon footprint
Keeping the house warm during winter
Preventing internal condensation
Improving the energy efficiency rating of a house4
1.3 Savings
Table 1: Annual Savings
Measure Annual Saving
(£/Year) Installed Cost (£) Installed Payback
Loft Insulation (0 – 270mm) Around £145 Around £250 Around 2 years
Loft Insulation (50 – 270mm) Around £40 Around £250 Around 6 years
Source: http://www.nationalinsulationassociation.org.uk/householder/index.php?page=loft-insulation
3 http://www.nationalinsulationassociation.org.uk/
4 http://www.loftinsulationgrants.org.uk/loft/insulation/Why-insulate.aspx
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1.4 Loft Insulation Grants
Partial Insulation Grants up to 70%
Insulation grants are available for all house owners and private tenants. These grants cover up
to 70% of the cost of having insulation, professionally installed. The percentage of grant funding
however, depends on the type of property, how it is heated, the number of bedrooms, the
size/area to be insulated, and whether there is any existing insulation in the loft. All the house
owners and private tenants receive around 50% of the insulation cost and sometimes, higher.
Hundred Percent Free Insulation Grants
Full insulation grants are available to anyone who is aged 70 and above and receiving certain
benefits, tax credits, or allowances.
Qualifying Criteria for Free Loft Insulation
Anyone aged 70 and above
OR anyone in receipt of one of the following benefits:
Attendance allowance
Income support
Council tax benefit (1)
Disability living allowance
Disabled persons tax credit
Housing benefit
Child tax credit (2)
Working tax credit (2)
Income-based jobseekers allowance
War disablement pension (3)
Pension credit (4)
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(1) Single person's discount and student exemption do not qualify
(2) Gross combined household income must be under £16,040, excluding benefits
(3) Should include mobility supplement or constant attendance allowance
(4) State pension does not qualify. It must be a top up
Insulation Grant Criteria
Should have an own house or stay in a rented house in the UK
If privately rented, the landlord's permission is compulsory
Must be living in the property at the time of the survey/installation
The insulation must not be for a new build project
Loft and cavity wall insulation must be fitted by approved installers
Lofts must have under 4" of existing insulation5
Carbon Emissions Reduction Target (CERT)
The Carbon Emissions Reduction Target (CERT) scheme was introduced to reduce the CO2
emissions which are the one of the major contributors to climate change. This scheme came
into effect on April 2008, and it obliges the energy companies to take steps to ensure that the
amount of CO2 emissions from houses is reduced. CERT will be in effect for three years with the
target of making an annual net saving of 4.2 million tonnes of CO2 by the end of the
programme.
5 http://www.cheapinsulation.co.uk/insulation_grants.html
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According to this scheme, electricity and gas suppliers will be obliged to promote:
Improving energy efficiency by loft and wall insulation
Increasing the amount of energy generated from renewable technologies such as wind
turbines, solar panels, and ground source heat pumps6
The CERT scheme is funded by the UK Energy suppliers like British Gas, Npower, E.ON,
ScottishPower, and Scottish and Southern Energy. The cost to suppliers of achieving the CERT
(from April 2008 to December 2012) is estimated to be £5.5 billion. Taking into account the
costs, the CERT has a positive Net Present Value (NPV) to society of approximately £17 billion.7
The five big energy companies fund the house insulation, as well as allocate the installers for
the insulation work. Households can approach these installers directly for claiming the grant for
cavity wall insulation or loft insulation. The council and housing association tenants should,
however contact their housing provider directly in order to apply.8
The important point to be noted is, in the UK, mineral or glass wool is the only material offered
for loft insulation, under the various government grant and discount schemes.
Funding Extended to 2012
In June 2010, it was announced that The Department of Energy and Climate Change (DECC) had
voted to extend CERT funding until December 2012, subject to parliamentary approval.9
6http://www.energysavingtrust.org.uk/Easy-ways-to-stop-wasting-energy/Energy-saving-grants-and-
offers/Carbon-cuts-get-serious-with-CERT
7 http://www.decc.gov.uk/en/content/cms/what_we_do/consumers/saving_energy/cert/cert.aspx
8 http://ezinearticles.com/?UK-Home-Insulation-Grants---Where-the-Funding-Comes-From&id=4721103
9 http://www.insulationgrants.info/news/an-introduction-to-home-insulation-grants/
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The government estimates that six million households will be able to benefit by the end of 2011
and aims to insulate all homes in UK by 2020.10
Under the newly restructured government obligation on energy companies (CERT), extended
from March 2011 until December 2012:
Sixty-eight percent of energy suppliers’ work should be met through professionally
installed loft, cavity, and solid wall insulation. With Do It Yourself (DIY) insulation added,
more than 80% of the scheme will be focused on insulation. Previously, just 60% was
met through professional and DIY work
Fifteen percent of the homes helped, will be the lowest income households that are
more at risk of fuel poverty
Energy companies will now be stopped from promoting compact fluorescent lamps in
order to prioritise insulation, further to the total ban on light bulb mail-outs11
10
http://news.bbc.co.uk/2/hi/uk_news/6043288.stm
11 http://www.decc.gov.uk/en/content/cms/news/pn10_075/pn10_075.aspx
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1.5 Insulation Market Structure*
Figure 4: Insulation Market Structure
* Expanded Polystyrene Scrap (EPS)
** Rigid Polyurethane (PUR)
*** Extruded Polystyrene (XPS)
*Insulation Market Structure - Analysts View
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1.6 Market Size – UK Loft Insulation
Figure 5: Market size – UK Building Insulation
Source: http://www.amaresearch.co.uk/PR_Building_Insulation.pdf
As per AMA research, in 2007 the market size is £755 million and there is a steady growth till
2007 in the UK building insulation market. But due to recession, the market size declined to
£725 million in 2008. Between 2007 and 2008 the loft insulation industry fell down by 4%, due
to low construction activities and other factors, and this trend would be continued till 2009.
Between 2009 and 2010, the market size will remain the same and the total market size is
estimated to be £650 million.
AMA research estimates that between 2010 and 2011, the market size is to grow by 5.4% and
reach £685 million. By 2013, the market size of the industry is estimated to be £760 million.
Major factors contribute for the growth of industry include introduction of CERT programme,
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free grants for the people aged 70 or above, awareness among the people about the energy
efficiency and advantages etc. 12
Out of the total building insulation market, loft insulation share would be from 21% to 23%
during the period 2007 to 2012. So, if an average percentage is taken to estimate the market
size, the UK loft insulation industry would be £143 million.13
12
http://www.amaresearch.co.uk/PR_Building_Insulation.pdf
13 http://www.mbdltd.co.uk/Press-Release/Building-Products.htm
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1.7 Major Players in the market
Rockwool Limited
Established in 1937, Rockwool is the one of the major companies manufacturing stone wool
products and ranks 2nd in the insulation market. The company is located in Bridgend, South
Wales and is the UK’s leading supplier of mineral wool for thermal, fire, and acoustic
protection. The product provides pleasant indoor environments by keeping out the freezing
cold and also keeps the indoor temperature cool, when it is hot outside. One important
property of the company’s stone wool product is its ability to withstand temperatures of more
than 1000°C.
The company operates 22 factories in 3 continents and has a good network of sales offices,
distributors, and partners that enable the products to reach all over the world. Of the total
company sales, 82% are contributed by insulation products and the remaining 18% by its
systems division.14
Products
Stone wool
Glass wool
Systems division
14
http://www.rockwool.co.uk/
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Key Facts – 2009
Table 2: Key Facts
Description Details
Total Employees 7,843
Sales/Revenue £1,313.4 Million
Profit after Minority Interests £37.8 Million
Source: http://www.rockwool.com/investor/key+figures
Recent News
Rockwool Launches RockPrime Loft Insulation
7 June 2010
Due to the increase in the demand for faster and effective installation, Rockwool launched a
new approach to insulate the loft area of houses, i.e. by launching Rockprime. Rockprime is a
mechanically installed blown loft insulation that offers high quality and makes the loft
installation faster for the loft area within old and new houses.
The major advantage of Rockprime is that it doesn’t have any wastage and the leftover material
can be used for insulating another house. Further, it has no settlement after installation, will
provide acoustic benefits, and will not be displaced by air movement. Rockprime is British
Standards Institution (BSI) Kitemarked and approved by both by the Energy Savings Trust, as
well as The Office of Gas and Electricity Markets (OFGEM).15
Rockwool Receives Occupational Health and Safety Certification
3 June 2010
Rockwool secured accreditation for its Occupational Health and Safety Management System
(OHSMS). The BS OHSAS 18001:2007 certification is an internationally recognized assessment
15
http://www.rockwool.co.uk/media/document+viewer?docid=1862
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specification for occupational health and safety management systems, developed through a
collaboration of leading trade bodies, international standards, and certification bodies.
The certification recognizes the company’s commitment in creating a safe and healthy working
environment for its employees, both at its manufacturing facilities located in Bridgend Wales
and commercial premises in London.16
Knauf Insulation
Knauf Insulation was founded in 1932 and is a family-owned multi-manufacturer of building
materials and construction systems. It is the UK’s leading insulation company with 30 years
experience in the insulation industry. The company has more than 150 production plants in
over 40 countries. It is the UK’s only manufacturer of glass mineral wool, rock mineral wool, and
extruded polystyrene insulation products giving an unrivalled range for building, process and
appliance insulation, as well as fabrication products.
Products
Glass wool
Rock wool
Expanded Polystyrene (EPS)
Extruded Polyethylene (XPE)
Extruded Polystyrene
Wood wool17
16
http://www.rockwool.co.uk/media/document+viewer?docid=1859
17 http://www.knaufinsulation.co.uk/
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Key Facts – 2008
Table 3: Key Facts
Description Details
Total Employees 5000
Sales/Revenue £181.9 Million
Net Profit £5.9 Million
Source: OneSource
Recent News
New Manufacturing Facility
30 June 2010
In May 2010, Knauf Insulation opened a new manufacturing plant in Lannemezan that helps the
company meet the higher demand of their new mineral wool product with ECOSE® technology.
Over €130 million were invested for the plant and employs more than 135 people. This plant is
one of the most innovative with respect to the mitigation of environmental impacts and has
been constructed to produce glass mineral wool with the company’s new bio-based binder
ECOSE® technology.18
Knauf Insulation Receives Eurofins Gold Standard for Indoor Air
12 April 2010
Knauf Insulation is the world’s first company to receive the Eurofins Indoor Air Comfort Gold
standard. This award is given for the company’s new mineral products made with ECOSE®
technology. The product has met all the defined requirements of Eurofin’s Indoor Air Comfort
Gold Standard and is therefore certificated as an outstanding material according to the VOC
(Volatile Organic Compounds) Indoor Air Quality emissions regulations.19
18
http://www.knaufinsulation.com/en/node/1568
19 http://www.knaufinsulation.com/en/node/1487
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Mineral wool with ECOSE® technology wins the Global Insulation “product of the year” award
2009
30 November 2009
Mineral wool with ECOSE® technology was voted as the best product by the delegates of
4th Global Insulation Conference and Exhibition held in Prague. The technology is the result of
the company’s 5 years intensive research and testing, and provides Knauf customers with
innovative products which also meet the growing market demand for more sustainable
construction materials.20
Kingspan Insulation
The Kingspan Group was formed in 1970 and Kingpspan Insulation is a member company of the
Group. The company manufactures the Kingpsan Kooltherm K-range and Therma range of
products. Its products are chlorofluorocarbon (CFC)-free and Hydrochlorofluorocarbon (HCFC)-
free and have zero Ozone Depletion Potential (ODP).
Kingspan Insulation has manufacturing locations in the UK, Ireland, and the Netherlands.
Products
Rigid urethane
Rigid phenolic
Extruded Polystyrene (XPS) Foam21
20
http://www.knaufinsulation.com/en/node/967
21 http://www.insulation.kingspan.com/uk/intro.htm
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Key Facts – 2009
Table 4: Key Facts
Description Details
Total Employees 5,049
Sales/Revenue £990 Million
Net Profit Before Tax £49.9 Million
Source: OneSource
Recent News
Kingspan Kooltherm for the World’s Tallest Modern Timber Residence
30 September 2010
A nine storey residential building in Hackney, said to be the world’s tallest modern timber
residence, has been insulated with the Kingspan Kooltherm product. Contributing to the
London’s 10% carbon emissions reduction target, is Kingspan’s Kooltherm K15 Rainscreen
Board installed beneath the cladding to insulate the building’s walls.22
Building Research Establishment (BRE) Rating for Kingspan Kooldut Product
16 September 2010
KoolDuct panels produced at the Permbridge manufacturing plant achieved the BRE Green
Guide 2008 Summary A rating. The A rating was awarded by BRE Global, after assessing the
environmental impacts of the company’s product across its entire life cycle. BRE awards a rating
to various companies on a scale from E up to A+.23
22
www.kingspan.com/kingspangroup/media/news_features/nf2010/2010-09-30/
23 http://www.insulation.kingspan.com/uk/pdf/news_koolduct_a_rating.pdf
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Superglass Insulation
Superglass is an independent manufacturer of mineral wool insulation in the UK and
manufacturers thermal and acoustic mineral wool products for the construction industry. The
company’s products are manufactured from mineral wool (Man-made Vitreous Fibres: MMVF)
that are designed to provide excellent thermal and insulation properties. Superglass products
are available in the form of rolls, slabs or batts, and come in different thicknesses and sizes.
Products
Thermal mineral wool
Acoustic mineral wool24
Key Facts – 2009
Table 5: Key Facts
Description Details
Total Employees 206
Sales/Revenue £39.3 Million
Net Loss £0.2 Million
Source: OneSource
Excel Industries Limited
Excel Industries Limited is one of the major manufacturers in the UK, of specialty fibre for
varied industrial and construction applications and a range of British Board of Agrément (BBA)
approved sustainable building products. Excel building solutions is the UK’s leading supplier of
innovative building solutions and building products manufactured from recycled materials.
24
www.superglass.co.uk/about_us/about_us/about_us
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The company develops products specifically for the DIF loft insulation market and is supplied in
convenient bags. In houses, in order to upgrade the existing loft insulation, as per the
regulations, the company’s product can be simply installed over the old and existing materials.
The company’s distributors are located across the country and is therefore convenient for
customers to purchase the product.
Products
Wood-based cellulose fibre.25
Key Facts – FY2009
Table 6: Key Facts (UK)
Description Details
Total Employees 57
Sales/Revenue £8.8 Million
Net Loss £0.5 Million
Source: OneSource
25
www.excelfibre.com
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1.8 Impact of Recession*
The insulation market experienced a healthy growth till 2007. By the end of that year the
impact of the “credit crunch” began to affect the UK economy and the insulation market. Major
companies in the insulation industry like Rockwool faced negative sales due to a decrease in
construction activities in various countries. Further, companies were also impacted by an
increase in raw material costs, etc.
Companies like Superglass and Kingspan were affected due to slow growth of the housing
sector in UK. As a result, company sales decreased in the last few years. Rockwool sales
decreased by 18.5% in 2009 compared to 2008 as a result of the recession and low demand for
its major product, stone wool.
Long-term Perspective
At present, there is a sign of recovery in the construction industry in the UK. Further, due to the
government grants for insulation products and the introduction of a new program, CERT, the
installation of insulation products is expected to increase in future. Other possible contributing
factors which might help increase the sales of the insulation products include an increase in the
awareness of energy efficiency among people and free grants provided by the government for
people aged 70 and above.
*Impact of Recession - Analyst View
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2. Global Insulation Market
The global insulation market is projected to increase 4.6 percent annually and reach £22.8
billion by 2012. 26
2.1 Europe Insulation Market
The European insulation market for the year 2010 is £5.7 billion.
Major players in Glass wool include:
Saint Gobain
Knauf
Uralita
Players in Stone wool include:
Rockwool International
Paroc, Knauf and
Saint Gobain
26
http://www.reportlinker.com/p0109778/World-Insulation-Market.html
25-30%
25-30%
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Major players in Plastic foam include:
Rectical (PUR)
Kingspan (PUR)
CRH (EPS)
DOW (XPS)
BASF (XPS)
Metechno (PUR)
Thyssen (PUR)
Others include 5% of the total market size.
2.2 North America Insulation Market
The market size of North America Insulation market is £4.8 billion.
Major players in Glass wool include:
Owens Corning
Saint Gobain
John – Manville
Knauf
Players in Plastic foam wool include:
Owens – Corning (EPS & XPS)
John – Manville (EPS & XPS)
DOW (EPS & XPS)
40-45%
50-55%
25-30%
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Major players in Stone wool include:
Rockwool Internation A/S (PUR)
Fibrex
Thermofiber
Others include 15-20% of the total market size.
2.3 China and South East Asia Insulation Market
For the year 2010, The China and south East Asia insulation market is £1.92 billion. Plastic foam
product has a dominant share with 72%, while glass and stone wool combined together
constitute 20% and others has a share of 8%. Major manufacturers of Stone wool include
Shanghai New Building Materials Mineral Wool Factory, Shanghai Buildings Material Group etc.
With respect to glass wool, major manufactures include Isover Guan Factory, Owens Corning
Factory, and Owens Corning Tianjin.
2.4 Russian Insulation Market
The Russian insulation market for the year 2010 is £0.6 billion. Stone wool is having the major
share with 45%, glass wool with 26% and plastic foam with 29% market.27
27
http://www.rockwool.com/files/rockwool.com/Presentations/2010/20100316_Q4_Exane%20BNP_London.pdf
5%
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3. Regulations and Industry Bodies
Due to the focus by the government and businesses on reducing energy loss and being more
environmental friendly, loft insulation has gained importance. The UK Government issues
approved building regulations to dictate and guide house builders on how to construct units to
an energy-efficient standard.
Building Regulations
Parts L1 and L2 of the UK Building Regulations deal with the conservation of fuel and power,
and dealing with insulation, both cavity and loft. These regulations came into effect in April 6,
2006 and every house builder is bound by law to adhere to these rules and regulations.28
Thickness
The recommended depth for loft insulation should be 270mm for glass wool, 250mm for rock
wool, and 220mm for cellulose.29
Insulation Material
There are no regulations with regard to the usage of insulation material. The main materials
used by NIA installers are blown mineral wool (glass or rock wool), blown cellulose (recycled
newspaper), and mineral wool (glass or rock wool).
New vs. Existing Building
All new buildings in the UK have to follow the UK Building Regulations set by the government.
28
http://www.ehow.com/list_6396743_regulations-loft-insulation-uk.html
29 http://www.nationalinsulationassociation.org.uk/householder/index.php?page=loft-insulation
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The UK Government also states that any modifications to the existing building must comply
with the present building regulations and this applies to loft insulation and so an extension may
have better loft insulation than the rest of the house.30
3.1 National Insulation Association (NIA)
The National Insulation Association (NIA) is a non-profit organisation that represents 90% of the
industry in the UK. Members of the association include manufacturers and installers of the
cavity wall, loft, and solid wall insulation. As per the association, all members work to the
highest standards of the BBA or equivalent regulatory level.
If there is any problem with the service rendered by its members that include manufacturers
and installers, NIA will invite the complaint and initially direct it to the member company
involved, to provide it with an opportunity to rectify the situation directly and provide customer
satisfaction.
The NIA reports regularly (on a monthly basis) on the level of complaints received. These
reports are assessed by the management and council that determine whether the complaints
procedure is effective, or if any further training or action needs to be taken.31
NIA also conducts various training programs for its members with respect to the development
of service. It also conducts yearly conferences to share industry knowledge and the upcoming
trends.
NIA also encourages people to have their houses insulated. It publishes various articles and
keeps updating information on the UK grants which are available for the house owners and
tenants.
30
http://www.ehow.com/list_6396743_regulations-loft-insulation-uk.html
31 http://www.nationalinsulationassociation.org.uk/householder/index.php?page=complaints-procedure
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3.2 British Board of Agrément (BBA)
The British Board of Agrément (BBA) is a UKAS ISO*: 17020 accredited organization, which is
accredited to provide inspection services to the construction industry. BBA’s accreditation
scope includes the installation of cavity wall and loft insulation, windows, doors, etc.
The BBA has over 40 years experience in providing independent and unbiased information on
products and their installation.32
BBA inspection teams cover various inspection activities including inspections of BBA approved
installers and installers operating under client managed schemes, to surveillance visits carried
out on behalf of the Government endorsed Competent Person and TrustMark schemes.
The BBA approved scheme for the installers of loft insulation has been developed with input
from energy industry stakeholders to ensure that the loft insulation is installed professionally to
meet the required standards and deliver the anticipated energy and CO2 savings to
householders.
BBA inspectors conduct quality inspections based on the volume of installations completed
annually, work in progress and post-completion. These inspectors cover UK.33
* UKAS - United Kingdom Accreditation Service
* ISO - International Organization for Standardization
32
http://www.bbacerts.co.uk/inspection.aspx
33 http://www.bbacerts.co.uk/inspection/loft_insulation_scheme.aspx
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4. Mergers and Takeovers
Due to a steady growth in the insulation industry, some major mergers and takeovers have
taken place, with an aim of expanding operations into other countries.
On July 6, 2010 Rockwell group acquired CSR’s (an Australian Company) Asian stone wool
insulation business for AUD 128 million. The acquisition provided an opportunity for the
company to further expand upon its existing operations in South East Asia and establish a
bridgehead in China.34
In December 2009, Kingspan insulation acquired the Australia Company, Air-Cell Innovations, as
part of their expansion program in insulation technology. The newly formed company, Kingpsan
Insulation Pty* is expected to help the company introduce the products in the Australian
market.35
* Proprietary Limited Company
34
http://www.rockwool.com/press/news/news+view?newsid=1819
35 http://www.koolduct.kingspan.com/koolduct/pdf/air_cell_acquisition.pdf
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5. Demographics*
The purchase of the loft insulation products depends on various demographic factors that
include age, income level, social class, level of education, etc.
People aged between 30 and 60 are expected to be more interested in installing loft insulation
products compared to other age groups possibly due to an increased awareness of the various
schemes introduced by the government. The major purchasing decisions are made by people
who fall under this age group. Government grants for people aged 70 and above will also draw
interest as they are eligible for obtaining a full grant.
Income levels of people are also considered a major factor influencing the purchase of loft
insulation. Middle-income families would be more concerned towards reducing their house
energy bill. Further, they would be more interested to utilise the government grants for the
installation of lofts.
The level of education also plays a major role in the purchase of loft insulation products.
Although the government provides grants for energy efficiency schemes, most of the people
are not aware of these schemes and its importance. The government has therefore decided to
create an increased awareness by promoting door-to-door campaigns to explain the
importance of insulating houses.
* Demographics - Analysts Views
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6. Marketing
Marketing plays a key role in the success of a product. Major players like Rockwool, Knauf
Insulation, and Kingspan promote various marketing activities to help increase sales of their
products.
The Think Tank, a company based in the UK has created various marketing campaigns for
Kingspan Insulation. The Kingpsan Insulation Website is designed in a way to attract, as well as
retain existing customers.
IAS B2B, a marketing company has developed a marketing campaign for the brand building of
Kingspan’s new brand, Kingspan Benchmark. The campaign will run across the trade media and
the brand has already implemented a social media strategy using blogs and a Twitter feed.36
Rockwool conducted a new advertising campaign, “Stop Local Warming” in Copenhagen in
December 2009. The main aim of the company was to show that excessive usage of energy is
one of the major contributors to climate change and insulation is the possible solution. The
company was able to change the common perception of the Danes with this campaign. The
campaign mainly appeared in home magazines and newspapers.37
36
http://www.thedrum.co.uk/news/2010/08/20/15286-ias-b2b-develops-kingspan-benchmark-brand-building-
campaign/
37
http://docs.google.com/viewer?a=v&q=cache:Sv1RYE5OciAJ:www.rockwool.com/files/rockwool.com/Publications
/Newsletter/2009/News_2009_3e.PDF+marketing+strategy+advertising+site:www.rockwool.com&hl=en&gl=in&pi
d=bl&srcid=ADGEESig_AdgAa1LqJ49-
zRc6immbcgVVndP4_zp0DlnHDBb1lglpQnCATetPbtdwOYpVCA_jt4E3uBCSUhNnZrEeQXrayMJxPX2HXP6V5dZdlI4nT
Mg0GgJaHbZMyptEhZbnp8iezsc&sig=AHIEtbSEF_cUXWck0s-4W8zfcxD-GzSezA
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7. Technology
Companies in the insulating industry invest in Research and Development (R&D) activities in
order to introduce new products. Competition in the industry has led to companies developing
more interest in differentiating their products from competitors.
Recently, the brick manufacturing industry developed a new product (brick filled with mineral
wool) which not only met the thermal transmittance values but also exceeded it. An added
advantage of this brick is that it improves sound insulation. Grenzebach Maschinenbau GmBH,
a German company has developed a new brick filling station which can be integrated into
existing production lines.38
A major leader in the insulation industry, Knauf Insulation, has developed a new form of
mineral wool, with ECOSE® technology. It is a formaldehyde-free binder technology, based on
rapid renewable materials instead of petro-based chemicals. It reduces the embodied energy
and delivers superior environment sustainability. ECOSE® technology is used to create a strong
binder that not only bonds mineral wool insulation strands, but also many other materials.
Benefits of ECOSE® technology:
Based on rapidly renewable resource
Bio-based formulation which does not contain phenol, formaldehyde, or acrylics
Reduced impact on environment through lower embodied energy in the binder
Lower process emission inside the plants
Reduced manufacturing emissions to the environment
Improved Indoor Air Quality (IAQ) in product-application
Lower investment in emission abatement equipment
Easier manufacturing permitting
38
www.propubs.com/global-insulation/3D/Issue2-2010/pageflip.html
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No artificial colours or dye added39
Another company, Hemp Technology has announced the launch of Breathe™, an innovative
new natural fibre insulation. Produced from UK grown hemp and flax, Breathe™ offers a
renewable and low-carbon means of insulating lofts, walls, and floors. With a thermal
conductivity of 0.039 W/mK, Breathe™ performs better than many fibre products. This boosts
thermal comfort by reducing overheating in summer and damping internal temperature
fluctuations.40
The hemp fibres can absorb and release moisture without damage or the loss of all important
thermal performance. With a tolerance of condensation, it is ideal for use in breathable wall
construction, making it a key material in constructing healthy houses. This is bolstered by the
fact that it is entirely non-toxic and non-irritant.41
39
http://www.ecose-technology.com/en/technology
40 http://www.industrytoday.co.uk/Construction/hemp-technology-launches-new-hemp-insulation-/0667
41 http://www.hemcore.co.uk/resources.htm
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8. New Products
Kingspan Solar, part of Kingspan Renewables Limited, a division of Kingspan Group is involved in
the development of environmental friendly solutions to generate hot water and home heating.
The company designs flat plate solar thermal panels that suit the UK climate. This product is
suitable for “in-roof” and “on-roof” installation, which makes it suitable for both new and
existing properties.
Figure 6: “In-roof” Solar Panel
Source: http://www.kingspansolar.com/kingspansolar/marvel-in-roof.html
Kingspan also manufactures Aeromax Air Source Heat Pumps, which are designed specifically
for UK climate. The product is easy to install and extracts useful heat from temperatures as low
as -15°C. It can provide hot water at 65°C without supplementing the heating backup. This
product helps in reducing the carbon footprints and current bills.42
42
http://www.kingspansolar.com/kingspansolar/
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A new scheme has been introduced by the UK government as part of the energy efficiency
program.
Feed-in Tariff Scheme (FITs)
The Feed-in Tariff Scheme (FIT) was introduced in April 1, 2010. This scheme is available in
Great Britain and is not applicable to Northern Ireland (scheme is under review). It guarantees a
minimum payment for all electricity generated by the system, as well as a separate payment for
the electricity exported to grid.
As per the scheme, after installing the microgeneration technology product, households will
experience a reduction in their electricity bill. Further, energy suppliers make the payments to
the householders and communities who generate their own electricity from renewable or low
carbon sources such as solar electricity panels or wind turbine. If the householder obtains a
loan for installing the product, it will be deducted month-wise.
The scheme covers the following electricity-generation technologies, up to an installation of
5 Mega Watts.
Solar electricity (roof mounted or stand alone)
Wind turbine (building mounted or free standing)
Hydroelectricity
Anaerobic digestion
Micro Combined Heat and Power (micro CHP; limited to a pilot at this stage)
The tariff and benefits depend on the installation period.43
43
http://www.energysavingtrust.org.uk/Generate-your-own-energy/Sell-your-own-energy/Feed-in-Tariff-
scheme#tarifflevels
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Feed-in Tariff Process
Figure 7: Feed-in Tariff Process
Source: http://www.ofgem.gov.uk/Sustainability/Environment/fits/rfitls/Pages/rfitls.aspx
Licensed Feed-in Time Suppliers
British Gas
Ecotricity
EDF Energy
EnDCo
E.ON
First-utility
Garsington Energy
Good Energy
Npower
Opus Energy
Scottish and Southern Energy
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Scottish Power
Smartest Energy
Tradelink
Utility Warehouse
Winnington Networks
The tariff levels for various technologies installed between 15th July 2009 and 31st March 2012
have been fixed and will be reviewed again in 2013.44
As per Npower, there is a record number of inquires on solar panel installation and
homeowners are interested in this scheme. According to the company, there have been record
installations after the introduction of the scheme. In one month, the company has installed 55
solar panels and also responded to 200 requests for information on installation. As per the
scheme, house owners who generate their own electricity through accredited solar technology
will receive 41.3p for every unit of electricity they generate. According to the government, it
estimates that a household can generate an income of upto £960 a year by using solar panels.
These types of schemes are also used in France, Germany, and Spain.45
44
http://www.ofgem.gov.uk/Sustainability/Environment/fits/rfitls/Pages/rfitls.aspx
45 http://www.guardian.co.uk/environment/2010/apr/30/homeowners-feed-in-tariffs
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9. Suppliers
To manufacture a product, raw materials are necessary. The suppliers play a major role in
providing quality raw materials, essential to produce or manufacture a quality finished product.
In order to manufacture a quality product, companies will request their suppliers to follow
guidelines and thus ensure they run their business ethically.
Rockwool Insulation sources its materials only from those suppliers who comply with all
international, national, and local laws and standards relating to employment, environmental,
purchasing, and manufacturing practices. Further, the company insists its suppliers to ensure
that the working practices regarding their employees, trade union recognition, etc. comply with
the national and international accepted standards. As per the code of conduct, the company
requires its supplier to comply with the environmental standards and regulations relevant to its
business.46
Knauf Insulation manages its process to comply with ISO 9001 and 14001 standards for quality,
environment, health, and safety. The company expects the same levels of adherence to
standards from all its suppliers.47
As per Kingspan's policy, wherever possible, all the principle suppliers should be accredited to
BS EN ISO 9001 /14001 and OHSAS* 18001, which cover quality, health, and safety and
environmental management for several key facilities. Although, this is not compulsory, it aims
*Occupational Health & Safety Managements System (OHSAS)
46
http://www.rockwool.com/files/rockwool.com/Publications/CSR_Reports/CSR_2010-03-10.pdf
47 http://docs.google.com/viewer?a=v&q=cache:XPI6AqUg8b4J:www.knaufinsulation.co.uk/pdf/Brochure-
Sustainability-March-
2010.pdf+knauf+insulation+raw+material+suppliers&hl=en&gl=in&pid=bl&srcid=ADGEEShw5SG2xT9c_HroS7TERx
XNJlFPKe3hBA8_eS7DJhLNy1HR-NksswPk3BLrLD_ehDrJ64y064FBMHQuD4fd-
d2sKNX5ydkn9OJd2wntZ442AihxEnJsif4LTFrmu5GTwjnR9xB9&sig=AHIEtbRv6RSpqwXh5MRFZwID6igfwR_Ukw
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to have preference to accredited suppliers. Kingspan also works with the supply chain on
important issues such as site waste, trailing methods to dispose, and recycle packaging more
effectively such as launching a pallet return service to certain sites.48
In the company, supplier surveys and reviews are being conducted with individual suppliers
whenever there is an issue. Once in three years, quality assessment questionnaire is sent to the
suppliers. Supplier sustainability’ consultation and feedback exercise has been undertaken to
identify expectations and important issues completed.49
48
http://www.kingspan.com/kingspangroup/ourresponsibilities/supply_chain_management/
49 http://www.insulation.kingspan.com/uk/pdf/Sustainability%20&%20Responsibility%20Report%202009.pdf
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10. Corporate Social Responsibility
Rockwool has established the Rockwool Foundation, which is a non-profit organization that
works with the objective of supporting scientific and humanitarian goals, and contributing to
the improvement of the environment and the general development of society. The company
established Article 13, a consultancy that helps companies to operate in a manner that
produces a positive impact on the society.50
The company also engages various communities and works closely with local schools and
councils. The manufacturing facility is surrounded by woodland and a natural reserve. The
Rockwool Woodland for Learning Trust welcomes children from nearby schools to spend time
on outdoor nature projects, linking into their curricular requirements. The company recently
undertook a scheme providing free loft insulation for the company’s employees and their
friends and families. The company also provides financial support to both local and national
charities.
The company has received many awards for its commitment to improve the environmental
performance like:
Wales environment Awards Team Winner
Overall Winner Wales Environment Award
Short listed for “EDF Energy Environmental Award”51
50
http://www.rockwool.co.uk/sustainability/corporate+and+social+responsibility
51 http://www.rockwool.co.uk/sustainability/corporate+and+social+responsibility/engaging+with+communities
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As part of CSR, Knauf Insulation supports people in the town, where the manufacturing unit is
located and solves any problems. As part of contributing to a sustainable future, in the last 2
years, the company has improved its packaging that has resulted in a decrease of the carbon
footprint of their transport, by 20%. Further, the company reduced glass mineral wool waste
levels by 15% over the past three years.52
Kingspan recognises the importance of conducting its business in a socially responsible manner.
It adopts its sustainability policy and is being implemented across the group.
Striving for sustainability in all its business products and operations is the company’s corporate
and personal responsibility. It aims to adopt and apply best practice sustainability principles by
ensuring environmental, social and economic parameters.53
52
http://www.knaufinsulation.com/en/corporate_responsibility
53 http://www.kingspan.com/kingspangroup/ourresponsibilities/our_approach/
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11. Ethics
At Kingspan Insulation a Health and Management system is in operation, which has been
certified to OHSAS 18001 at the Pembridge site since 2005. All work related injuries are
recorded, however minor, via the company’s intranet. A detailed log of each event is
maintained, and accidents are followed up by a full risk assessment and corrective action by the
responsible manager. The welfare of affected staff is monitored to ensure their fitness for
work.54
Figure 8: Rate of Injury and Accidents Avoided
Source: http://www.ofgem.gov.uk/Sustainability/Environment/fits/rfitls/Pages/rfitls.aspx
54
http://www.kingspan.com.au/pdf/KingspanPanelsSustainabilityReport48pg_09.pdf
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'Double-counting' of loft insulations undermines carbon dioxide savings
Observer 14 Feb 201055
Tens of thousands fewer home lofts have been insulated under the government's £2.8bn
energy efficiency programme than companies such as British Gas have claimed, the Observer
has learnt. Experts claim that double-counting means that up to 9.8m tonnes of carbon dioxide
that the scheme is supposed to have saved is "illusory".
Energy companies have also saved millions because subsidising loft installation is one of the
cheapest and most effective ways to meet their obligations under the carbon emissions
reduction target (Cert) scheme. Ofgem, which oversees the scheme, introduced new guidelines
last year [2009] in an attempt to close the loophole, but these are largely left to the energy
companies to administer.
Under the four-year Cert scheme, which began in April 2008, companies subsidise energy-
efficiency measures to reduce customers' consumption of electricity and gas, for example by
sending households energy-saving lightbulbs. Approximately a third of the spending has gone
on insulating home lofts. According to Ofgem, just over a million homes had been fitted with
loft insulation by professionals up to the end of September. But Ofgem also admitted that a
further 38m square metres (covering approximately 969,000 homes) were insulated on a "DIY
basis" by the end of December. This is calculated by the sale of cheap rolls of insulation
material, subsidised by energy companies, to homeowners by retailers.
But several industry sources confirmed that many professional installers have bought
subsidised material from retailers, which are only supposed to be sold to homeowners. This
means that where professionals have installed subsidised materials, energy companies are
counting one address as having been insulated twice; once under the DIY category, once by
professionals.
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http://www.guardian.co.uk/business/2010/feb/14/loft-insulations-carbon-dioxide-emissions
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‘Free’ solar panels not such a great deal Installing your own panels could save you £10k
Which? Article 30 September 2010
Free solar panel offers are all the rage at the moment, with several companies, including British
Gas, offering consumers the opportunity to ‘rent out’ their roofs in exchange for free electricity.
What they’re not so upfront about is that the companies stand to benefit far more from the
arrangement than householders.
New research by Which? has found consumers could save as much as £10,500 over the next 25
years by buying their own solar photovoltaic (PV) system instead of signing up to a scheme
offering ‘free’ solar panels.
The consumer champion found that even in the sunniest far South West of the country, ‘rent-a-
roofers’ would only save a maximum of £412 a year off their electricity bill. The company
supplying the solar panels, on the other hand, would get £1,313 from the government’s feed-in-
tariff (FIT), an incentive scheme that gives money for renewable energy.
Which? experts calculated that even if consumers took out a Which? Best Rate loan to cover
the £19,000 that a solar panel system would cost, they would still be thousands of pounds
better off in the long run as they would receive the lucrative FIT income for themselve
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12. General News Articles
UK retailers in talks to join government's 'green deal'
Guardian 6 Oct 2010
Tesco, B&Q and M&S among companies that could sell loft insulation and home energy
improvements as part of the coalition's flagship energy efficiency programme.
Some of the UK's biggest and best-known retailers are in talks with ministers about the
opportunity to sell loft insulation and other home energy improvements under the
government's "green deal". Tesco, the country's dominant supermarket, home improvement
chain B&Q, and high-street stalwart M&S are among the companies which could end up
marketing the coalition's flagship programme to encourage home energy efficiency
improvements alongside frozen food, pots of paint or underwear.
Ministers believe that around 14m of the country's 27m homes could be fitted with energy
saving measures in the next decade, along with offices and other buildings owned by small and
medium-sized companies. The scheme is projected to create between 200,000 and 250,000
jobs.
It has emerged that ministers are considering how to persuade most of the country's 27m
homeowners to take part in the flagship scheme - which could lead to incentives such as a
rebate on council tax or stamp duty.
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We hope you found this report useful, feel free to email us with any feedback or questions.
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