Annual Review 2019
When our new €120 million Glass Mineral Wool insulation site opens in Malaysia in 2020, it will create 180 new jobs, have an annual capacity of 75,000 tonnes and provide energy-saving solutions for countries across the Asia Pacific region. David Ducarme, Group Chief Operating Officer, discusses how the new plant positions the company for the future.
Why is the plant so important to customers?
We are giving our customers access to highly effective quality solutions which they really appreciate – our insulation with ECOSE Technology®. The plant also brings us physically closer to our markets and, as we are installing the latest technology, we can respond faster in terms of product development or service to customers. This investment also demonstrates we have a long-term commitment to the region.
Why is the plant capacity significant?
It has been built bigger than current demand in the market which gives great growth opportunities. And, as the biggest, most efficient plant in the region, it also provides Knauf Insulation with a cost leadership position which in turn helps our customers to stay competitive for the long run.
Which key countries will the plant serve?
Today we have four main markets: Japan, Korea, New Zealand and Australia and we will be developing new partners and customers in those countries as well as looking at new markets such as growing economies like Vietnam or Indonesia as well as developed economies nearby such as Singapore, Malaysia and Thailand. Asia is the fastest growing region for insulation and we see strong growth potential.
What is the plant contributing to the success of Knauf Insulation’s culture?
We think there is a good match between our culture and the strengths of the people we see in the region. There is a lot of entrepreneurship and enthusiasm there. People are extremely active and motivated to participate.
How is the plant building on the company’s culture of continuous improvement?
We are starting not only with the best equipment and the best plant design, we are also starting with all our continuous improvement backgrounds from day one. We are recruiting people with previous experience or people with the right attitude who we feel will work well in a framework where we will empower plant operators and local teams.
Safety is also a priority.
From day one we have put in place all the safety processes we have developed over the years. We are following the same standards as anywhere else and have had zero Lost Time Accidents (LTA) on the site. On September 27 we celebrated 500,000 hours without an LTA.
How are relationships with local suppliers?
We are developing local suppliers, not just for building and manufacturing, but also equipment. Suppliers from Malaysia, China and Vietnam, for example, are extremely capable and very competitive and they could be very useful to our global business in future.
What new products can be discussed?
In New Zealand and Australia we have a new forming technology that will introduce more rigidity to our solutions providing a better installation experience.
The plant will also use a high percentage of recycled glass.
There are countries in the region with a surplus of glass from bottle banks and sometimes more bottles than can be recycled.
We will be able to consume a large part of that glass rather than sending it to landfill. For example, we are working with the Singapore government to see whether we could improve the collection of bottles locally and include that glass in our process.
What will be the economic impact of the plant in the Asia Pacific region?
We have created jobs for 180 people locally. Then around the region 20 more commercial jobs. In terms of the local economy the benefits will be around US$40 million a year – local services, jobs and materials – and then probably another US$10 million in other countries for services such as transport and sea freight. Overall the full economic impact in terms of sales is about US$100 million in turnover.
To what extent has Knauf Insulation’s Asia Pacific team contributed to the plant’s success?
Since 2010 they have achieved so much and that has enabled this massive investment. We are starting with a good level of capacity utilisation because they have been able to develop the right mix of customers. The local team and the customers are the ones we should congratulate for getting this investment approved. It’s a fantastic partnership.
Any final thoughts?
It’s the first investment but there will be more in Asia very soon.
Meet the A-Team
APAC managers discuss how Johor Bahru will transform regional markets
Stuart Dunbar, Regional Managing Director (APAC): “Asia is the fastest growing insulation market in the world and it was important to invest in a regional plant to be in a strong position to fulfil future market requirements. The plant means we are able to help customers develop their markets and product offering through a diversified range and quickly adapt to develop new products as the market requires. In addition, the plant will be a springboard to continue the great progress we have made in developing new fire-safe solutions for our customers.”
Andreas Moutsatsos, Regional Finance Director (APAC): “The plant is only possible as a result of the hard work of everyone at Knauf Insulation and the support of our customers who believe in the company and our products. It is on the back of this loyalty that the investment has been made to further build on these relationships.”
Taku Onodera, General Manager, Japan: “Customers appreciate our attractive prices, long-term relationships based on trust as well as our prompt service. With the launch of Johor Bahru, lead times will be reduced from three months to one, enabling a faster, more flexible supply system for customers. Customers choose our products because of their eco credentials and global reputation for quality.”
Jeremy Brown, General Manager, New Zealand: “A ‘local’ plant shows customers we are prepared to invest in the region and are here to stay. By having ‘face-to-face’ technology and faster shipping times Knauf Insulation hopes to become the market leader in New Zealand. Other Glass Mineral Wool manufacturers in the region are using old technology. With the Knauf Insulation product range we can offer a more environmentally friendly and sustainable product that our end-users demand.”
JH Choi, Sales and Marketing Manager, South Korea: “The plant will reduce delivery times to South Korea, provide capacity for increased demands, offer products in different densities, enable customer-specific products and advanced solutions such as ECOSE Technology®. Our customers appreciate our superior technology, high quality and our binder with no added formaldehyde.”
In five years I’ve conducted supply chain missions in six countries. Now I’m in Malaysia. This wouldn’t happen in other companies. Professionally, it’s a challenge. Personally, it’s an adventure.
Why is our Malaysia plant important to customers?