Gypsum industry news

US/Canada: Wynnchurch Capital Ltd, a US-based private equity firm, has made a growth equity investment in Canada's Gypsum Technologies Inc.

Canada: Continental Building Products has reported that its net sales, operating income and wallboard sales all grew in the second quarter of 2015.

"We produced another quarter of strong cash flow as a result of our disciplined operations, efficient cost structure and sharp focus on execution as we continue to grow our business," said Jay Bachmann, Continental Building Products' CEO. "During the quarter, each of our regions experienced stronger construction activity, enabling us to deliver solid growth in our wallboard shipments. We actively managed our costs to achieve significant operating leverage on higher sales and repurchased approximately 2% of our outstanding shares for US$20m while also reducing our debt leverage. We believe that we continue to be well positioned to capitalise on improving construction activity in our markets to enhance our profitability and deploy our capital into additional value-enhancing opportunities."

Net sales for the second quarter of 2015 grew by 7.9% to US$111m. The growth was primarily driven by 8.1% higher wallboard volumes to 567Mft2. The average mill net price grew by 0.7% year-on-year. At constant currency, the average mill net price increased by 1.5%. For US shipments, the average mill net price increased 1.4% year-on-year. Gross profit grew by 41.1% to US$29.5m and gross margin grew to 26.6% from 20.3% in the same quarter of 2014, primarily as a result of operating leverage achieved through higher wallboard volume and favourable energy costs. Operating income was US$4.3m compared to US$12.8m in the same period of 2014. Adjusted net income grew to US$10.2m from US$4.7m in 2014. Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 24.4% to US$33.3m.

In the second quarter of 2015, Continental Building Products repurchased 913,200 shares of common stock at an aggregate purchase price of US$20m from an affiliate of Lone Star in a private transaction in connection with the secondary public offering in May 2015. It also used cash flow from operations for the voluntary repayment of US$10m of debt. The next principal payment on its debt not required until August 2020.

Canada/US: HIG Capital, a global private equity investment firm, has announced that its portfolio company Harrison Gypsum has acquired JA Jack & Sons, a miner and processor of limestone products. JA Jack owns and operates a quarry on Texada Island in British Columbia, Canada and ships limestone to a processing facility in Seattle, Washington, USA.

"We are excited about the strategic expansion of our operations into the Pacific Northwest," said Paul Harrington, CEO of Harrison Gypsum. "JA Jack not only allows us to grow outside our core markets of Oklahoma and Texas, but also significantly broadens our customer footprint and product portfolio within our expertise of mineral processing. JA Jack has had a long and successful history under the Jack family dating back to the 1940s and we will be sure to serve as great stewards of the business going forward."

Canada: Pan American Fertilizer Corp has signed a non-binding Letter of Intent to acquire Demetra Minerals, a Vancouver-based, privately-held junior fertiliser company developing agricultural gypsum products for the Cono Sur markets of Argentina, Paraguay, Bolivia and Brazil.

In the proposed transaction, a new seven-member board of directors will be composed of three nominees from each of Pan American and Demetra plus a mutually agreed 7th independent director. Gregg Jensen of Demetra would be appointed as president and CEO, Sebastian Cattaneo as COO and Jeremy Wright as CFO. Robert Rennie would remain as the chairman. Pan American and Demetra would consolidate all assets and debts.

Canada: National Gypsum Canada Ltd is looking to make what it calls 'the largest gypsum quarry in the world' even bigger. The quarry in Milford, Nova Scotia currently covers about 3.01km². The plan is to expand operations by 1.44km², 1.35km² of which would be used for mining activities.

"We want to ensure that we have an adequate gypsum supply and the market is better than it has been," said Nancy Spurlock, company spokeswoman. An increase in US housing starts of about 1m units in 2014, up 8% from 2013, continues to drive demand for wallboard products.

National Gypsum has registered its proposed mine extension project for environmental assessment with the province as required under the Environment Act. "The anticipated average production rate for the expanded mine facility will be at the 20-year average of 3.1Mt/yr, depending on market demand," said an environmental report prepared by Stantec Consulting Ltd for National Gypsum.

The Milford-area mine has produced more than 134Mt of gypsum since it opened in 1954. National Gypsum employs 60 people at the mine and more workers will be needed if mining operations and the volume of product pulled from the ground increases, according to Spurlock. The quarry, one of eight the company owns and its only one outside the US, would grow over the next 35 - 40 years, depending on market demand. "It's a long-term forecast, and we need to nail down the source of our gypsum, that's why we're doing it," said Spurlock.

The proposed extension area includes forest, wetland, clear-cuts and some agricultural land. Six wetland areas would be protected by an ecological buffer zone. If the project is given the go-ahead, National Gypsum would open up areas as needed. The minister has until 9 April 2015 to grant a conditional approval of the environmental assessment.

Canada: CertainTeed Gypsum is reportedly looking at opening a new gypsum mine near Canal Flats. The company currently mines at its Elkhorn Quarry West property near Windermere, which is projected to have between seven and 12 years of gypsum reserves left. The new mine, called the Kootenay West Mine, is projected to employ around 18 people, including drivers. The project start date for the new mine is 2017.

Canada: USG's Canadian subsidiary, CGC Inc, has introduced CGC Sheetrock® Brand UltraLight Mold Tough® Panel to the Canadian market. It is the lightest 1/2" mould-resistant gypsum panel available in the industry. This innovative gypsum panel is 20% lighter than traditional water and mould-resistant panels, making it easier to lift, carry and install.

CGC Sheetrock® Brand UltraLight Mold Tough Panels have a non-combustible, water and mould-resistant core encased in 100% recycled water and mould-resistant green face and brown back papers. The green face paper is folded around the long edges to reinforce and protect the core and the ends are cut square and even. The long edges of the panels are tapered, allowing joints to be reinforced and concealed.

Canada: Cory Schurman has accepted the role of national sales manager with Gypsoil, a division of Beneficial Reuse Management. He will oversee the Gypsoil sales team, coordinate marketing programs and work with customers, sales representatives and agricultural consultants.

"We are very excited to add Cory Schurman to the Gypsoil team," said Robert Spoerri, CEO of Beneficial Reuse Management. "He possesses a highly advanced understanding of soil improvement and agronomics and he is a leader in analysing agricultural business processes, identifying sales opportunities and executing integrated marketing programs. Schurman is a widely-recognised resource for helping crop growers incorporate efficient and effective agronomic solutions through careful management decision-making."

"I'm looking forward to building the Gypsoil sales team to help growers achieve maximum soil productivity and agronomic results through the use of Gypsoil brand gypsum," said Schurman.

Schurman replaces Steve Musser who was named director of new product development for Gypsoil. In his new role Musser will focus on advancing several initiatives to broaden the company's offerings and service to agricultural producers.

US/Canada: Georgia-Pacific plans to 'idle' one wallboard plant in Caledonia, Ontario and one wallboard plant in West Memphis, Tennessee in early 2014. Eric Abercrombie, a spokesperson for Georgia-Pacific, attributed the decision to production optimisation and a slow recovery in the building materials market.

"We are doing this because of market conditions and the fact we've just acquired new capacity through a merger," stated Abercrombie to local media. 60 employees will be affected at the Caledonia plant and 39 employees at the West Memphis plant.

In early 2013, Georgia-Pacific acquired four new gypsum wallboard plants when it took over Memphis-based Temple-Inland Building Products from International Paper. That deal, worth US$750m, added 1800 employees to Georgia-Pacific and 16 production facilities.

Canada: Gypsum Technologies Inc (Gyptech) will officially open its new corporate headquarters in Burlington, Ontario on 17 October 2013. The global supplier of wallboard process equipment and engineering services has built a new 2040m² headquarters to meet corporate growth objectives and long-term goals. The company's manufacturing facility will remain in Mississauga, Ontario.

"We look forward to getting into the new building where we have a modern facility and the improved quality of life that Burlington offers," said Gary Murray, President and CEO of Gyptech.