Owens Corning and Saint-Gobain, the world“s two largest suppliers of fiberglass based materials, are in talks on the terms of a possible merger of their composite activities. The reinforcements and c…
Owens Corning and Saint-Gobain, the world“s two largest suppliers of fiberglass based materials, are in talks on the terms of a possible merger of their composite activities. The reinforcements and composites operations of Saint-Gobain“s Vetrotex subsidiary would merge with Owens Corning“s reinforcements division to form a 40:60 company, Owens Corning-Vetrotex Reinforcements. Saint-Gobain would have the option to sell its stake to Owens-Corning from 2010. According to Saint-Gobain, the economies of scale, combined geographical cover, product range and technical expertise which the merger would represent are needed to face stronger competition in the market. The new company would employ 10,000 people in Europe, North and South America and Asia, and turnover is estimated at EUR 1.5 billion a year. Operating profit for Saint-Gobain“s reinforcement and composites division fell 25% in 1Q 2006, on turnover up 7% to EUR 718 million. Saint-Gobain expects demand for composites to continue to grow at 5-6% per year until 2010, with growth reaching 12% a year in South America and 8% a year in Asia.