Project Phoenix continues to rise for Superglass
Published: 15 January, 2013
Superglass Holdings held its Annual General Meeting yesterday, at which the group's interim statement from 1 September 2012 to 14 January 2013 was released.
“The first phase of Project Phoenix, our transformational capital investment programme, remains on budget and on track for completion during the first half of this year with one of the newly installed production lines now changed over and running at full capacity, and the second line scheduled to be upgraded in the Spring," said John Colley, chairman of Superglass.
Mr Colley continued: "As previously reported estimated annualised cost savings from Project Phoenix have increased from our original expectations of £3.6m to a total of up to £5.0m. The increase in savings is predominantly due to the installation of new fiberising technology which, as well as improving our cost base, is enabling us to meet the increasing demands of the marketplace in terms of competitive pricing, product quality and specification.
"The savings from Project Phoenix have started to filter through. While these will be meaningful in the current financial year, the implementation of Project Phoenix was always planned to incur significant one off costs as a result of 6 weeks production downtime on each line to complete the technology upgrades.
"The first full year of savings is expected in 2013/2014. We continue to identify, implement and where possible accelerate further cost reductions.
"Market conditions in the UK are extremely challenging and remain difficult to predict, as reported in the preliminary results announced on 22 November 2012. Since that announcement sales volumes have been steady. However, a stronger than anticipated demand for volume commodity products has had a negative impact on our average sales price and overall market conditions are also impacting prices.
"Input cost pressures persist with energy costs continuing to rise during the period. Superglass manages its working capital effectively and, despite the challenging market conditions, our net debt position continues to be better than management expectations.
"We remain cautious about the Green Deal channel and continue to work on broadening our routes to market. There remains a lack of clarity on the transitional arrangements from CERT, which ceased on 31 December 2012 to the Green Deal which comes into full effect on 28 January 2013. As a result, volumes in this channel are likely to reduce with a potentially slow start-up of the successor Green Deal scheme.
"We welcome the Department of Energy & Climate Change’s (DECC) Green Deal communications campaign run in conjunction with the January launch. The aim of the campaign is to engage and educate the consumer about the scheme and the benefits of insulation solutions as the most cost effective method of reducing carbon emissions and household energy bills.
"The board remains focused and is making good progress in meeting its strategic objectives of migrating Superglass into a lower cost, higher quality producer of glass fibre insulation solutions with an emphasis on selling its products through broader routes to market, an enlarged customer base and a more comprehensive range.”