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Owens-Taishan Offer New Specialty Glass

Zacks Equity Research

The global producer of glass fiber reinforcements, Owens Corning (OC), has joined with Taishan Fiberglass, a subsidiary of China National Materials Group, Sinoma, to promote the use of Alkali Resistant (:AR) specialty glass products.

Under the strategic alliance, Taishan will contribute its manufacturing experience, while Owens will lend its know-how and technology to develop tailor-made fabrics and glass reinforcement products.

The AR glass fibers provide binding strength to concrete and prevent plastic, thermal and dry shrinkage cracking. The specialty reinforcements will be manufactured in China and the research and development support for the production will be given by Owens Corning global research and development centers.

Owens is focused on innovation and is geared to use tailor-made technologies and, in this regard, is using the expertise of other companies in the field. Recently, in Mar 2013, Toledo, Ohio-based Owens Corning entered into a strategic alliance with the leading chemical company, BASF, and a multi-national thermoplastic producer, TenCate Advanced Composites.

Under the alliance the two companies will work together to develop thermoplastic composites for mass production of automobiles in an attempt to make vehicles lighter, durable, environment friendly and more fuel efficient.

Recently, Owens Corning also took over the mineral wool commercial and industrial insulation products manufacturer, Thermafiber Inc. The acquisition includes a 145,000 square foot manufacturing location of Thermafiber located in Wabash, IN. The buyout provides Owens Corning with a broad insulation portfolio of fiberglass, foam and mineral wool insulation products.

Owens Corning, which produces residential and commercial building materials, glass-fiber reinforcements and engineered materials for composite systems, is slowly gaining momentum from improving new home demand.

With the home construction market is improving steadily, building and other construction material companies, like Vulcan Materials Company (VMC) and Eagle Materials Inc. (EXP), as well as building product makers, such as Masco Corporation (MAS) and Louisiana-Pacific Corporation (LPX), are witnessing a corresponding rise in demand and volume.

The housing market has steadily made a comeback from the severe and widespread downturn witnessed in mid-2006. The stability in the home buying market, combined with low interest rates and increased rentals, has increased the affordability of homes.

The U.S. housing market has seen significant upside in new home sales volume in 2012 with industry-wide sales increasing roughly 25% from the prior-year levels. New home construction activity improved 25% in 2012. Faced with the fiscal cliff at 2012-end combined with the threat of sequestration and a mounting national debt, the recovery of the housing market was one bright spot on the U.S. economic horizon.

Currently, Owens Corning carries a short-term Zacks Rank #2 (Buy).

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