Grenfell supplier Kingspan unable to quantify costs of fixing other blocks

Irish insulation giant Kingspan has apologised for “serious issues” linked to the use of its products in Grenfell Tower as the company said it was unable to quantify the cost of likely claims for remediation work at other high-rise blocks.

Kingspan has been in the spotlight at the public inquiry into the 2017 Grenfell fire that claimed 72 lives because its Kooltherm K15 product was used in the tower’s refurbishment. Lawyers for victims’ families and survivors have said that it and other suppliers of cladding and insulation for the renovation “abused” safety tests and sought to circumvent fire regulations.

Reporting a 2 per cent rise in its 2020 post-tax profit to €384.8m on Friday, Kingspan blamed “unacceptable employee conduct at its UK insulation boards business, and historical process shortcomings by this business” and said it was strengthening its governance and compliance. 

The inquiry has uncovered evidence that members of its technical team joked about submitting different material for K15’s authorisation for use in tall buildings than the material it sold.

“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 company said.

Asked on an analyst call to quantify the K15 revenues that might not have had the correct safety certification, Kingspan chief executive Gene Murtagh said he would not know until a “building-by-building” examination of possible remediation cases.

“There’s a lot of moving parts in it and to be honest we just can’t answer that question,” he said.

“Does certification cover it or not? Did that have anything to do with Kingspan in the first place? Was it our advice etc?” 

K15, which constituted about 5 per cent of the insulation used in the Grenfell refurbishment, received a safety accreditation on the basis of a 2005 test. 

But Kingspan changed the chemical composition of the product a year later, according to a lawyer for the bereaved and survivors. The inquiry has also heard that company tests of the revised product in 2007 resulted in “a raging inferno”.

Kingspan withdrew the 2005 test last November after the revised product was used in UK high-rise blocks for close to 15 years, saying the test was “not representative” of the K15 product sold from 2006. 

The product had €16m in annual sales at the peak and Murtagh said there were “hundreds if not thousands” of parties involved. 

Kingspan has had a “relatively low” level of claims for remediation thus far, said Geoff Doherty, chief financial officer. “As we go forward, it is reasonable to suggest that there might be further claims coming down the tracks.”

An increase of €20m-€30m a year on €30m in annual warranty costs would be “manageable” but such figures were not indicative of a run-rate of claims.

Kingspan said it had full confidence in K15’s safety when in compliant systems. 

The company said it had no role in the design of the Grenfell cladding, saying it was used without its knowledge in a system that was not compliant with building regulations and was unsafe.