Knauf Insulation’s Group Chief Operating Officer (COO) and Deputy CEO, David Ducarme, talks about growth, better buildings and our ongoing sustainability mission.
What kind of impact have the challenges of 2022 had on Knauf Insulation’s customers?
“We’ve had COVID, a construction boom, a cyber attack and our industry has been sold out. Because of this, our customers have unfortunately seen a shortage of product. They've also seen a very strong inflation in our pricing, that was mainly driven by the COVID, supply chain disruption, and then the energy crisis following the war in Ukraine.
“But at the same time, they've seen a very strong demand for our products. So there's some good and bad news. And so far, the industry has been able to continue delivering volumes, which isn’t always easy especially when trying to maintain good service levels. But overall, we've managed to continue to deliver a reasonable service to our customers throughout these different crises.”
What has Knauf Insulation done in terms of supporting its team over in Ukraine?
“Support has been given in different areas. Some was down to the individual actions from our amazing people, driving to the border and fetching people that want to come across. Some of our employees also welcomed Ukrainians in their homes.
“In terms of structured business, what we've done is make sure that our employees got the support they need, and they are in the safest possible position. Of course, we have limited control in that, but everything we could do, we have done. And we've also made sure to maintain a level of business continuity and support the little economic activity that is happening in Ukraine. And of course, we have kept everybody employed and paid, even if there was no record of economic activity during the period of time.”
The Johor Bahru plant came fully online in 2022. Why is this plant important?
“The Johor plant confirms our intention to stay in the region for the long term and we have built the most efficient asset in Asia Pacific. Nobody else has a plant of that scale and that technology level. And that's the way we approach new markets; we want to raise the level in terms of product quality, service and innovation, and certainly Asia Pacific is a great example of that. Having their own plant means that they will be able to serve customers much better with localised supply, and continue to develop their markets with their own capacity.”
Knauf Insulation took over an existing plant in Romania and has ambitious plans to increase its capacity. Why is this important?
“Romania is a project that makes a lot of sense to be able to increase our production capacity and improve our footprint in Europe to respond to growth. It's also a site with an existing team that we will be able to develop and who can contribute to our new state of the art plant. It's going to be good for local customers, for local employment and for energy efficiency overall.”
McGregor is Knauf Insulation’s newest plant in North America. What does it mean for the market?
“Increasing production capabilities in the US was essential to support customers in the growth they see in the market. Energy efficiency is very important in the US and is becoming even more important with a sustainability agenda that is getting also a lot of federal subsidies and budgets over the coming years. Excess is a very high growth for residential building. And we were struggling to deliver in that area because we had one plant which is in the north of California and the other in close to Atlanta. The Texas plant will allow us to support the growth of our customers and optimise our network of clients.”
What are your thoughts on the progress of the For A Better World strategy?
“It's our main business driver. It's essential that we look at everything we do with this prism of sustainability in mind to make the right decisions.
"We have seen very high level of engagement to support our sustainability strategy. We are probably still now in the process of training, educating and understanding what it really means. There are some very concrete actions, like the electric melting technology, and some other investment projects. We have a glass wool recycling plant that started up in Belgium this year as well. This is another interesting project where we invested €15 million to take waste from job sites and recycle into our processes.
“But the learning curve is very steep. And there's a lot of things that are uncertain. We need to make sure that everybody in the company is able to look at their business or their job with sustainability in mind. We've agreed to recruit a lot of extra people focusing on sustainability in the coming year, including sustainability engineers in each plant. We also have sustainability managers in each business region. We are getting ready to really accelerate the implementation phase. We’ve made a good start but the acceleration is about to come!”
Renovation can contribute significantly to energy efficiency – what action is Knauf Insulation continuing to take here?
“We're going to assess our abilities with a whole life carbon approach. It means that there will be a demand for higher performance insulation solutions, and also lighter building structures, less bricks and less concrete, because of the whole life carbon impact. Overall, the Knauf Group, not just Knauf Insulation, is very well placed to play a major role in this new development in construction sustainability. We are in the right industry and we have the right kind of the message to really play a major role there.
“When it comes to energy renovation, our view is that the market is today not working well. And the reason is that we don’t focus enough on delivering real energy performance in buildings, we are focusing on measures to implement. Something has to change in the market – doing more of what we’ve been doing simply isn’t going to work. So we’re working on new business models to help achieve the EU’s ambition of increasing renovation rate from 1% to 3% per year.”
The company is committed to reduce embodied carbon by 15% by 2025, how is the company doing in your opinion?
“We’ve had a couple of strange years with COVID, some lockdowns, a high demand for our product, a cyber attack and this energy crisis. With this in mind, we are doing okay, but we are not making drastic improvements as things stand. This is why this acceleration and the results we are now allocating to sustainability are essential if we want to meet our targets.
“I think we have all the right pieces of the puzzle; we just need to focus on recruiting and training the right people in the right locations, then it will be something that we can achieve. But over the last two years, we haven’t had 100% of our focus on this because of everything else we have been facing. As such, we are doing okay but there is a lot of room for improvement.”
The company has made a series of 2025 commitments to achieve zero waste to landfill, increase the amount of recycled raw material in products and take back scraps from deconstruction sites and from work on construction sites. What are your thoughts on the company’s progress?
“That's an area where we certainly walk the talk. This recycling plant we invested in in Belgium is the biggest in the industry. It's a pilot - we need to create the whole system and the value chain around this recycling service is not currently present in many countries. The right parameters are there in the market. But still, we need to develop the partners to collect the waste.
“We think that this type of plant that we’ve built in Visé is the first of many. We are already looking at other locations for the next wave of projects, probably in Europe, because that's where the pressure is the strongest today. Longer term, it makes a lot of sense to be able to recoup the materials that have been used already once and reuse them in making new insulation.”
Picture in the header: Knauf Insulation Executive Committee members, from left – Dominique Bossan, David Ducarme, Kristin Barthel