Owens Corning Gets India Investment From World Bank

World Bank private equity arm International Finance Corporation has invested $12 million for an undisclosed equity in fibre glass maker Owens Corning India Ltd (OCIL). The capital will be used to expand its manufacturing facility in Maharashtra. OCIL is a joint venture between Owens Corning USA (OC), which owns 78.5 per cent, and Mahindra & Mahindra, which owns 21.5 per cent stake. The expansion of glass melter and related downstream equipment capacity by Owens Corning will result in significant energy and efficiency improvements, IFC said in a release. Owens Corning is the inventor of as well as the world’s leading manufacturer of glass-fiber insulation, while M&M is India’s leading manufacturer of utility vehicles and tractors.

The facility is expanding in Taloja near Mumbai from 36,000 tons per annum (tpa) to 67,000 tpa at a cost of $39 million. The demand for glass-fibre in India is expected to increase by 18 per cent a year over the medium term, driven by growing infrastructure and automotive sectors, IFC said in a release.

Much has been said by Owens and others about the impact of the US housing market on results and rightfully so. Owens has taken many strides to offset that with the recent purchase of St. Gobain's fast growing composites business and now the overseas expansion. Shares will suffer in the short term as all housing related issues will but when housing bottoms, and yes it will, Owens is making moves now to really boost profits when that segment resumes. Owens has yet to guide profit expectations lower and that means two things, they expected housing to be this bad when they set them or other divisions are performing so well that they are taking up some of the residential construction slack. My bet is that it is a little of both and that is real good as we own shares in a company that does not give us fairy tale expectations and is diversifying it's operation away from an unhealthy reliance on US housing. .

All in all, I can wait.