12 March 2009

CEO Comment: When the going gets tough

CEO Eelco van Heel comments on the Rockwool business in the light of the global financial situation (from the Annual Report 2009).

Eelco van Heel, CEO of the Rockwool Group.

The world economy is experiencing considerable turbulence right now. Credit is being tightened as banks try to rebuild their balance sheets and limit their risks, companies are tightening their belts and cutting back on investments and consumers are increasingly worried and adjusting their spending accordingly.

As usual, the construction sector is one of the first to be hit. We are increasingly operating in an environment where building projects are being postponed or cancelled, developers and building firms are scaling down and the demand for building materials is receding. We have seen market downturns before, only this time the speed has been higher and all economies have been effected almost simultaneously. Luckily, the Rockwool Group has a strong position in the market for energy-renovation of existing buildings. This segment is likely to grow considerably in the time to come due to the efforts by most governments to limit dependence on fossil fuels, to combat the climate problems and to introduce anti-cyclical measures.

The Rockwool Group is well equipped to go through a tough period. We have adjusted our organisation to the present market to stay fit and competitive. With our strong equity position we are able to operate and grow our business in an efficient and professional way.

With an adequate level of financial means, we might actually benefit from the crisis. If, or when, suitable acquisition candidates or expansion opportunities present themselves we will be able to act.

And the crisis will be over at some point. We remain firmly convinced that our industry will continue to prosper as the world needs energy-efficient buildings with large amounts of insulation to create the low-carbon society of the future. After all, despite the current focus on the financial crisis and macro-economic depression, our societies also have long-term challenges to overcome in the future. In 2009, the nations of the world will gather in Copenhagen to reach a new climate agreement. We will highlight the potential savings on energy costs and the reduction of CO2 emissions that our insulation offers. It is one of the lowest hanging fruits.

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This article has also been published in the Rockwool Group's Annual Report 2008.

Download Annual Report 2008