British Gas has announced a further expansion of its insulation business with the acquisition of ECL Contracts Ltd, a specialist external-wall insulation company, for £4 million in cash.

The deal represents another major step in British Gas' ambition to build the country's leading insulation business, and help British Gas customers cut their energy usage, their carbon emissions and their fuel bills.

ECL Contracts Ltd is based in Rugby, Warwickshire and currently employs 31 staff. This acquisition will enable British Gas to diversify its own product range beyond loft and cavity-wall insulation and into solid-wall insulation. There are around 9 million homes in the UK of solid wall construction.

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Demand for home insulation is forecast to rise significantly in the next five years. Currently, £1 in every £4 spent on domestic energy is wasted because of poor insulation. Spending on home insulation is predicted to rise from around £0.6 billion a year in 2010 to £1.4 billion in 2015. Government programmes such as the Green Deal are also expected to make energy efficiency more attractive to British households.

British Gas aims to be the leading supplier of domestic insulation, building on its existing leading position in the provision of energy efficiency and microgeneration products, offering customers complete energy solutions for their homes.

Jon Kimber, Managing Director of British Gas New Energy, said: "This acquisition is part of the continuing success story of the British Gas insulation business. At British Gas, we are building the country's leading insulation business, reducing household carbon emissions, and helping our customers lower their energy bills.

"The insulation market is growing, and insulating homes is the cheapest way to reduce energy bills. ECL Contracts Ltd, like British Gas, has a real passion for great customer service, and we are delighted to have secured the skills of such a great team."

(CD)