Owens Corning sales continue to grow
Reports which are based on market research and titled as Insulation to 2019, which focuses on the US market and Global insulation industry report 2015 carry forward the latest information with regards to the manufacturing and construction business. The complete report containing intelligence data on US insulation market is quite an extensive one profiling 35 insulation companies and supported with 64 tables and 10 charts. All the data points in the direction of advancement in the overall demand and thus sales in the aggregate US insulation business.
The report presented by Owens Corning also complements the results put forward by this intelligence. According to Owens Corning, the net sales for its insulation business have risen by 6% on a yearly basis, with sales touching the point of US$1.75bn in 2014 and then rising to the mark of US$1.85bn in 2015. Similarly, there was a rise in earnings before interest and taxation (EBIT) by 46% between both the consecutive years.
The aggregate demand for insulation in the US market has been forecasted to rise 7.0 percent annually through 2019 which is equivalent to the amount of $10.4 billion in 2019. This rise or increase will be owing to the increasing building construction activity which in turn will boost the demand for insulation. Also, the higher sales of insulation have been aided by much more stringent building codes which have been adopted; Out of these strict codes, one is the 2012 International Energy Conservation Code (IECC) which is largely the cause of encouragement in insulation use per structure. The efforts being made to turn existing building to more energy-efficient structures will be a supporting factor for replacement demand for insulation.
The most rapid gains in the following years are expected to take place in the residential insulation market, where double-digit growth annually is being looked forward to. While the chief reason for the gain in residential insulation is attributed to more residential construction,supplementary advances will arise from the installation of more new insulation per structure as more regions of the US begin to comply with the 2012 IECC. Another supporting factor for the rise in residential insulation will be the insulation upgrades in existing houses in order to comply with the codes. One more reason for seeking the upgrade in the residential scene is the dwellers' aim to lower their utility bills by the suitable installation of insulation in their attics, basements and walls so that energy efficiency is increased.
Coming to the non-residential market scene, which has seen the decline in insulation sales being reported from 2009 to 2014, the sales are forecasted to recover in the upcoming years. These insulation sales will be stimulated by a bounce back in the non-residential building construction expenses, predominantly in the office and commercial sectors. As of recent, there has been rising interest in promoting green building practices, like the ones being highlighted by the Leadership in Energy and Environmental Design (LEED) rating system; this will raise demand for insulation at all fronts with high R-values being sought. Companies such like Owens Corning, Johns Manville and Roxul will all feel the benefits of this increase in demand for glasswool and mineral wool insulation.
Even though this turn of events on the astringent codes front, the rise in green buildings and the overall rise in construction in both the residential and non-residential sectors, is good news for Owens Corning and will lead to higher sales, there is a rise in other factors to be considered. Owens Corning needs to pay heed to the consequences that will arise pertaining to their revenue growth and margin expansion because of the supply end regulating prices and the raised volume in the US residential new construction market.
As of the year 2014, fiberglass insulation sector accounted for the most predominant demand in insulation which was up to the 48% mark of the aggregate demand in value. It is forecasted that in the coming times fiberglass will continue to be the insulation market leader, with demand reaching $5.0 billion. This turn of events will be owing to the double-digit annual growth in building construction expenditures which will drive the gains. Fiberglass insulation is typically the first choice in the range of insulation materials available when it comes to construction professionals and individuals looking for Do-it-yourself solutions because it is a low cost is conveniently installed and has satisfactory insulative characteristics.
The second largest share of the insulation market as of 2014 was made up by the demand of foamed plastic insulation. In the past foamed plastics have been used widely in the non-residential market because of the high R value characteristics making the material desirable to many contractors, builders and designers. The rising focus on the 2012 IECC code will lead to further rise in sales on foamed plastic insulation in spite of the higher price because the code requires for households to be appropriately sealed in order to stop air leaks. This kind of insulation is best suited for installation in hard to access areas such as spaces between walls as well as crawl spaces.
The US insulation market report profiles 2015-2019 studies all the major market players in the US insulation market which is a total of 35 companies including Owens Corning. Through and through the roofing, insulation as well as composites manufacturing companies has seen a rise in sales moving from the year 2014 to 2015. Owens Corning has seen considerable growth in earnings driven by the sturdy operational and commercial implementation in all three of these mentioned segments of the business. The past year of 2015 has seen a record growth in earnings with respect to these varied fields as has been reported by chief executive officer and chairman of Owens Corning in 2016.“Owens Corning made significant progress in 2014,” Thaman said, with all three of the major businesses of the company that is composites, roofing and insulation making the significant contribution to the increased earnings of Owens Corning. Owens Corning has reported in its news release that it looks forward to benefiting in the coming times due to the continued advancements in the U.S housing market scene.