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Owens Corning (OC) Buys vliepa GmbH, Boosts Nonwovens Business

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Owens Corning (OC - Free Report) has acquired vliepa GmbH in a bid to expand the nonwovens portfolio in building and construction markets in Europe. However, the terms of the transaction have not been disclosed yet.

vliepa GmbH, which generated sales of $30 million in 2020, focuses on the coating, printing and finishing of nonwovens, paper, and film for the building materials industry. This buyout enabled Owens Corning to have ownership of two production facilities in Bruggen, Germany. Hence, this addition perfectly complements its nonwoven solutions, manufacturing capacity and commercial associations, leveraging vliepa GmbH‘s technology as well as capabilities.

In sync with this, Marcio Sandri, president of Owens Corning’s Composites business, said, “Our combined organization will address several key macrotrends, including sustainability, lightweight building materials, and more labor-efficient construction solutions, by delivering enhanced performance in a variety of applications, including Polyiso (polyisocyanurate) insulation and gypsum boards.”

Focus on Inorganic Moves

Acquisitions are an important part of Owens Corning’s growth strategy. The company is assessing its investment in bolt-on acquisitions that leverage its commercial, operational and geographic strength as well as expand its functional areas of offering.

The acquisition of Paroc — a leading producer of mineral wool insulation for building and technical applications in Europe — enabled the company to expand its geographic scope in Europe as well as augment portfolio in a bid to include insulation products in all three major markets — North America, Europe and China.

Across the enterprise, Owens Corning — a Zacks Rank #3 (Hold) company — continues to invest in selected growth and productivity initiatives to serve customers as well as improve overall operating performance. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Specifically, the Composites segment (accounting for 27.8% of total 2020 sales) has been generating higher volumes backed by its efforts toward higher value applications for glass non-wovens and specific markets like India. It is expanding or adding a new production line to its current facility in Fort Smith, AR. For the composite business, the company has a two-fold focus. First, it is focused on key markets and geographies wherein it has a market-leading position like North America, Europe and India. Second, the company is focused on making the composite business the most cost-effective network, mainly on the back of productivity and manufacturing performance. It focuses on improving low-cost manufacturing position through strategic supply agreements, accomplished large-scale furnace investments and additional productivity.

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Owens Corning’s shares have outperformed the industry so far this year. The company is benefiting from market-leading businesses, innovative products and process technologies, and capabilities. Also, revival of housing demand has been a boon for Owens Corning and companies like Gibraltar Industries, Inc. (ROCK - Free Report) , TopBuild (BLD - Free Report) , Installed Building Products, Inc. (IBP - Free Report) in the industry.