Kingspan outlines Grenfell measures after ‘unacceptable’ conduct

Insulation maker Kingspan has outlined a number of actions it is taking in relation to the "unacceptable conduct" of "a small number of employees" following the Grenfell Tower fire tragedy in which 72 people died.

About 5 per cent of the insulation material used on Grenfell’s facade, through which the fire spread, was made up of Kingspan’s Kooltherm K15 product. The rest was supplied by a rival.

As it published its full year results for 2020, the company addressed the matter and outlined a number of actions taken.

“These issues relate to unacceptable employee conduct at its UK Insulation Boards business, and historical process shortcomings by this business,” it said.

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“Kingspan apologises unreservedly once again for these shortcomings which are not consistent with its values or its commitment to conduct its business to the highest safety standards.

“The actions are designed to address these legacy issues, complemented by group-wide governance and continuous improvement initiatives to ensure that these issues can never be repeated.”

The Irish Times asked the company how many employees were involved and what action had been taken, but the company refused to comment.

“We cannot comment on individual employees, but Kingspan condemns unreservedly any actions that do not demonstrate a proper commitment to fire safety,” it said.

Kingspan said it “had no role” in the design of the cladding system used on Grenfell Tower, and that it was used without Kingspan’s knowledge “in a system that was not compliant with the buildings regulations and was unsafe”.

“In its Phase 1 report the inquiry has stated that the ‘principal reason’ for the rapid flame spread on the tower was the polyethylene cored (PE) ACM cladding material which was neither manufactured nor supplied by Kingspan, and would never be compliant for use in a system combined with K15.

“Furthermore, large scale testing undertaken by the UK government since the fire concluded that any cladding system using the PE-cored ACM installed on Grenfell Tower would have been unsafe, regardless of insulation type.

“Notwithstanding this, the inquiry process has highlighted historical behaviours that have rightly been criticised, and today Kingspan is updating on extensive actions taken and underway to underpin its clear commitment to proper professional conduct and safety.”

The actions taken and underway include new fire testing and accreditation protocols; management and governance changes to strengthen its approach to product safety and compliance; as well as a new code of conduct.

The code of conduct includes strengthened “speak out” arrangements provided by an independent third party, and features enhanced investigation processes, and a multi-lingual 24/7 confidential phone line.

Kingspan chief executive Gene Murtagh said: "The unacceptable conduct and historical process shortcomings, involving a small number of employees in our UK insulation boards business, do not reflect the high standards of integrity and safety that are core Kingspan values, deeply held by our people.

“We have already implemented several important changes that demonstrate our commitment to product compliance and good governance. Our aims are clear: to reassure that safety takes precedence over all other considerations and to ensure this can never happen again.”

Separately, Kingspan’s results show group revenue decreased by 2 per cent to €4.6 billion and trading profit increased by 2 per cent to €508.2 million with an increase of 40 basis points in the group’s trading profit margin to 11.1 per cent.

The board has proposed a final dividend of 20.6 cent per ordinary share payable on May 7th to shareholders registered on the record date of March 26th, 2021.

The group said it received €17 million in Covid-19 related furlough benefits although full repayment was accounted for in December given the better than expected trading performance than was initially anticipated.

The company said 2020 was a “tumultuous year” for Kingspan. “After a relatively strong start, April and May saw a deep reduction in activity in many markets, followed by a rebound towards mid-year and ultimately a strong finish in the fourth quarter,” it said.

“Net debt was €236.2 million at year end, the lowest level in a number of years and leaves our balance sheet in an exceptionally strong position.

“Globally, governments reacted in varying ways to the crisis which resulted in an economic experience which was equally variable.

“All markets suffered interruption to some degree although in our case it was particularly acute in the UK, Spain, Canada and Ireland. Most other markets recovered to, and in some cases exceeded, the performance of 2019.”