In 2004, the insulation market was worth £610 million at
manufacturers sales prices (msp), increasing by 7-8% on the previous year and
continuing to be fuelled by the positive impact of Parts E and L of the
Building Regulations and EU legislation.
In 2005, the market is estimated to increase by a further 6%,
slightly less than in 2004, largely due to lower activity in the RMI sector in
comparison to recent years. The cost of raw materials is likely to remain high
in the short term, adding value to the market.
The insulation market is also expected to benefit from
legislation for improved thermal and acoustic performance in new and existing
buildings. Furthermore, increasing fuel prices and demands for energy
conservation, along with an increase in loft conversions and timber frame
construction, are also expected to keep the insulation market buoyant.
Changing legislation is expected to remain a key influencer on the market in
the medium term.
In recent years, the market has been affected to a large
degree by amendments to Part L and E of the building regulations and European
legislations. In addition, rising energy prices, growing environmental
awareness and concerns in relation to global warming and the depletion of
fossil fuels have impacted on the market. As a result of this, manufacturers
are considering the impact on the environment throughout the whole ‘cradle
to grave’ life of the product to a greater degree.
Mineral Fibres dominate the insulation materials market with
an estimated share of 44%. This indicates the strength of the product in the
structural and roofing insulation sector. However in recent years, mineral
wool has lost market share to other forms of insulation.
During 2003-2004, rigid insulation boards continued to gain
market share at the expense of the more traditional forms of insulation such
as mineral wool. It is expected that further product development initiatives
from manufacturers such as Kingspan will further enhance the attractiveness of
this insulation in the mass-market sector alongside mineral wool and EPS.
Other foams, Polyurethane, Expanded and Extruded Polystyrene
and others (Phenolic, polyisocyanurate, cellulose, etc), together
represent an estimated 51%. Other insulation materials such as cork,
plasterboard and vermiculite make up the remaining 5%.
In terms of end-use sectors, insulation used in construction
and refurbishment, e.g. of dwellings, commercial buildings etc, represents
approximately 65% of the market. This is largely due to the relatively high
levels of construction and RMI activity in the domestic sector in the last
four years. This sector has also been boosted by various factors including
energy prices and building regulation amendments. In addition, higher levels
of expenditure in some public sectors such as education and health have also
boosted this sector in recent years. Other sectors include OEM, which accounts
for 25%, followed by the industrial sector.
Structural insulated panels (SIPs) are also expected to gain
share in the longer term as developers increasingly adopt modern methods of
construction. SIPs are increasingly being used in the social housing sector as
they offer a rapid means of construction.
Kingspan is the market
leader followed by Knauf, Rockwool, Celotex,
British Gypsum and Superglass.
These companies manufacture a range of insulation and associated products.
Product development and the expansion of production facilities has been the
focus of the majority of the leading companies in the last two years.
Superglass was the subject of an MBO from parent company Encon in August 2005.
In the distribution sector, SIG
and Encon are the leading distributors.
Building products supplier Wolseley
acquired Encon in October 2005. Key
distribution channels in the insulation market are specialist distributors and
builders merchants. Additionally, insulation contractors are relatively
significant in the distribution of insulation, especially within the more
specialist product sectors such as cellulose insulation etc.
