01 July 2009

CEO Comment: Are the sails trimmed enough?

Eelco van Heel, CEO of the Rockwool Group comments on the Rockwool business in the light of the global financial situation (from Rockwool Newsletter, June 2009).

Eelco van Heel, CEO of the Rockwool Group.

It feels like centuries but it is actually only one to two years ago that the insulation industry was in the midst of extending production capacity in order to cater to the anticipated continued increase in demand as a consequence of strong global economic growth as well as the need to save energy and combat climate change.

How fast developments can change! Individual players in this same industry have for first quarter 2009 announced a sales drop in the area of 15 to 40% compared to the same period of 2008. The global construction industry – particularly the new built segment – is in dire straits and it will take some time before an economic recovery will start having positive effects on our business. Fortunately, some governments have introduced intelligent economic stimulus packages which combine the need for economic incentives with improved energy efficiency in buildings, at the same time fighting unemployment. From an insulation perspective this supports our business in the refurbishment as well as public segments.

Also the Rockwool Group has been forced to take the necessary actions to reduce its fixed cost level as well as number of employees. We have announced closure of several of our smaller factories and continuously adjust our capacity utilisation to sales volume developments. The organisation is taking all these measures in an efficient and dedicated manner – well aware of the fact that the Group will come out at the other end of this dark tunnel stronger, more competitive and with a renewed will to win.

In the midst of the present turmoil, the 2009 Group Employee Perception Survey was executed. The average score of 3.9 ended at the same level as last year – which is satisfactory under the circumstances. It is encouraging to note that our employees maintain a positive evaluation of most of our focus areas like mission, strategy, values, financial goals, brand awareness, management, cooperation as well as individual satisfaction.

Weak points remain innovation, organisational transparency as well as business efficiency (very much affected by the roll out of various Group IT systems). Group Management has made an in depth analysis of mentioned areas and is in the process of launching actions for improvement.

The market circumstances are tougher than ever. Despite this, the fighting spirit in the company remains excellent and the eagerness to develop new products, systems and services together with our customers has never been higher. Sometimes it takes a crisis to make big steps for the better!!

Eelco van Heel, CEO

This article has also been published in Rockwool Newsletter June 2009.

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