And so even with the ongoing consolidation that we’ve seen, you’ve seen us be able to improve the margin performance of the business. And so as consolidation occurs, we think that our model in terms of contractor focused and then being a great service partner to distributors on a broad base is the right way to go. And we think that continues to drive our performance going forward. So we don’t expect a big impact there. In terms of the Masonite piece, yes, the Home Depot, the home centers are a big part of their business. We’ve got a great core capability inside Owens Corning. Masonite has a great core capability that they’ve created to service the home centers. And so we think the combination of this is just going to be a great fit for our ability to merchandize, bring new innovations in, and to support the growth inside the home center.
So, we think that capability and track continue to give us opportunities inside the home center channel.
Operator: The next question comes from Philip Ng of Jefferies.
Philip Ng: Hey guys, good to see the inflection in sales in your North American insulation business, but sales were a bit weaker in Europe and C&I. How do you see that business, those two businesses progressing this year? And then separately, you’re calling for flattish margins in insulation 2Q and price cost narrowing. Does that widen out a bit in 3Q and perhaps even the back half as you announce some of the price increases out there for whether it’s fiberglass or mineral wall? Thank you.
Todd Fister: Hey, Phil, appreciate the questions. So let me start with a little bit of the Europe versus North America context within technical and global. So you’ll recall technical and global is about two-thirds of our revenue within the insulation segment. And there’s really four geo regions we sell into. There’s North America and Europe is the two big ones, and then Latin America, primarily Mexico, and then Asia, primarily China is two smaller ones. Right now, we’re seeing fairly weak conditions as we have for a while in Europe and in Asia. And in fact, we were down on revenue in both of those regions on a year-over-year basis. And it’s really macro-driven. I mean, it’s driven by the interest rate environment that we’re in.
It’s driven by construction markets and those geographies. And really, neither region has recovered quite the same way. We’ve seen the US bounce back from the impacts of inflation and interest rates. I’d say in contrast, we’re seeing good market conditions in North America and inclusive of Mexico. And that’s a strength that I think if you look at consensus estimates for the year, you’d say there’s some optimism around the parts of technical and global that serve the residential business, as well as some of the construction end markets in North America. I think that the rebound in Europe is a little more complicated in terms of when we would see that rebound occur. There isn’t as much underlying economic momentum right now in Europe. We’ve done a great job of managing through this in a way that has delivered really stable margins in good pricing and mix, as well as productivity improvements in regions.
I think we’re navigating a challenging macroenvironment well in Europe. But we likely need to see some interest rate relief and stability in Europe to really see construction rebound in the back part of this year or into next year.
Operator: Our next question comes from David MacGregor of Longbow Research.
David MacGregor: Yes, good morning, everyone and thanks for taking my questions. I wanted to ask about roofing and really maybe dig in a little on the mix and understand I guess you’ve talked a little bit about sort of the strength and laminate shingles and components. And can you talk about how much of this is growth and market demand versus maybe share gains from debottlenecking and freeing up stranded capacity and I guess on the latter how much further do you think that those incremental capacity additions could support growth?
Brian Chambers: Yes, thanks. Let me try to hit both sides of that so on the on the mix side I’d say you’re hitting it right in terms of when we talk about mix shifts where we’re producing more laminate shingles versus strip shingles, our duration product particularly as we can produce more of that and get that into the market that carries a different margin profile and that’s helping. And then our components business overall, we continue to add products. I talked in my prepared comments around house wrap product. We’ve got a full line of underlayment starter, hip and rich products. All of those continue to be pulled through at a higher rate. Frankly, as we see contractors selling more systems in the home. So they want to package our complete offering when they go into the home.
So it’s all an Owens Corning roof. But also, we’re seeing through our component strength, the ability to sell products now under other kind of roofing materials. So we’ve developed products that go under metals and tiles and other kinds of components. So those products generally carry very high margins as well. So as we’re growing the components business and getting more of that product through, that’s also improving our mix overall. So those are the two pieces that you’re hitting on. On the lam capacity piece, this is something that’s been an ongoing effort of the team over the last couple of years to really debottleneck and improve the line speeds and efficiencies within our existing footprint. So we are unique in that we’ve got a great footprint, 13 manufacturing facilities across the US.
So where we can go in, debottleneck or add a new laminator like we’re doing at our Medina, Ohio facility, that increases capacity inside an existing infrastructure and existing workforce. And that means that when we turn these lines on, we get great productivity and great line speeds really quickly. And that’s been helpful. And then the steady cadence of the ability to produce that and ship more laminate products quarter-over-quarter. And so part of this, when we started was, we had a target to increase lam capacity by about 6 million squares. That’s the equivalent of a kind of a brand new four wide today across our network. So we put that volume closer to customers by spreading it out over our network and we’re on track to do that by the end of next year.
