Tuesday 20 March 2018

Kingspan establishes Russia presence, seeks growth in Brazil

Gene Murtagh, CEO of Kingspan, at the company’s headquarters in Cavan. Photo: David Conachy
Gene Murtagh, CEO of Kingspan, at the company’s headquarters in Cavan. Photo: David Conachy

Dearbhail McDonald and Gavin McLoughlin

Kingspan has established an embryonic presence in Russia and has also started producing insulated panels in Mexico as it seeks to grow in Latin America, the Sunday Independent understands.

The insulation business has begun selling products in the key South American market of Brazil, where it sees potential for strong expansion. It's understood the company has been researching the market for several years and has ambitions to make an acquisition to tap into Brazil. It has also begun selling products in Panama and Colombia, it is understood.

Last Friday, Kingspan reported that its full-year revenue had surpassed €3bn for the first time, with trading profits up a third to just under €341m.

Chief executive Gene Murtagh said 2016 was "another record year".

"Through our organic initiatives and acquisition strategy we are developing a truly global business well placed to capitalise on the transition towards a lower energy future," he said.

"We are encouraged about the outlook for the first half of 2017, with the current order book solidly ahead of the same point last year. With low debt levels and strong cash generation, we retain the flexibility to invest in new opportunities as they present themselves."

Davy analysts Flor O'Donoghue and Michael Mitchell said they were "very optimistic" for Kingspan's prospects, despite some near-term challenges including rising raw material prices. Murtagh told analysts yesterday to expect around €100m in cost inflation this year as things stand, with scope for a potential increase in that figure.

He said the company had around €600m of headroom for acquisitions, and that there was a "healthy pipeline of opportunity".

"But... we seek value at Kingspan and we're not just going to buy for buy's sake," Murtagh added.

Sunday Indo Business

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