Gypsum industry news

Georgia-Pacific officially opened its new gypsum wallboard plant at Sweetwater in Texas earlier this month. The US$325m project is situated next to the company’s existing plant at the site, Sweetwater West, on the other side of a road. Canada-based Gyptech said in 2021 that it was supplying the equipment for the new high-speed line at the site.

When Georgia-Pacific first announced the new project in 2020, it mentioned that it would be able to keep its logistics costs low, use raw gypsum reserves and the existing workforce. Despite this, the plant has still created over 100 new jobs. The company also said that it anticipated closing its 60Mm²/yr Quanah plant, also in Texas, depending upon market conditions. This came to pass in March 2023. Altogether, both plants at Sweetwater will have a production capacity of around 93Mm²/yr. This implies that the new plant has a production capacity of around 60Mm²/yr, given that the existing plant’s capacity is 30Mm²/yr. Funnily enough this is the same as the Quanah plant.

The new plant at Sweetwater may be a sign that the US wallboard market is picking up again. Georgia-Pacific has invested some serious money and it is targeting Texas, a leading area for construction nationally. However, it does come with a few caveats. Firstly, the new plant at Sweetwater is replacing existing capacity at Quanah. Secondly, it is using some of the advantages of the existing plant such as its trucks and its proximity to its customers. This suggests that the company may be wary of building a new plant in a greenfield location with all the potential risks that might involve.

US wallboard sales have regularly peaked and troughed over the decades, like many other commodity markets, as demand and production capacity race each other. Sales of wallboard peaked around the year 2000 and then again in the mid 2000s before tailing off following the 2007 recession. They have been recovering ever since and started to get close to the levels seen in the first half of the 2000s in 2022 when the United States Geological Survey (USGS) reported wallboard sales of 2.6Bnm².

Generally, the last tranche of new wallboard plants in the US were built or approved in the late 2000s before the financial downturn. These new sites included CertainTeed’s Roxboro plant in North Carolina and the Moundsville plant in West Virginia, Gold Bond Building Products’ Mount Holly plant in North Carolina and American Gypsum’s Georgetown plant in South Carolina. From this point though various plants were either closed or mothballed. Some of the latter have been restarted as the market slowly recovered. New plant projects in the 2010s tended to be upgrades or replacements. One example of this was USG’s plan to rebuild a production line at its Jacksonville plant in Florida, which was announced in late 2017 before Knauf took over the company in 2018. Another was National Gypsum’s scheme to reopen its Wilmington plant in North Carolina in 2019. At the same time in the 2010s there were a number of mergers and acquisitions including Lafarge’s sale of its gypsum business in North America in 2013, Knauf’s takeover of USG in 2019 and Saint-Gobain’s acquisition of Continental Building Products in 2020.

When Georgia-Pacific started building the new plant at Sweetwater in 2020 this marked the start of a new phase of US wallboard plant projects. American Gypsum announced plans for an upgrade to its Albuquerque gypsum wallboard plant in 2021, Gold Bond Building Products started building its long-delayed Eloy plant in Arizona in 2022 and it said it was spending US$90m on an upgrade to its Mount Holly gypsum wallboard plant in North Carolina in 2023, and CertainTeed revealed it wanted to build a second production line at its Palatka gypsum wallboard plant in Florida also in 2023.

Congratulations are due to Georgia-Pacific for the achievement at Sweetwater. Optimism for the US market in general may also be in order given the slow but steady stream of projects that have been announced and completed since 2020. The next step, when a company builds a new wallboard plant at a greenfield site in the US, looks set to happen when Gold Bond Building Products completes its Eloy plant.

US: Georgia-Pacific will close its 60Mm²/yr Quanah gypsum wallboard plant in Texas on 1 March 2023. Local press has reported that the plant employs 166 people. Georgia-Pacific first announced its planned closure in 2020.

Canada: CertainTeed Canada plans to close its McAdam gypsum wallboard plant in New Brunswick by the end of February 2021. It said that the decision was made after ‘an extensive review of our business,’ according to the Canadian Broadcasting Corporation (CBC). 50 employees are expected to lose their jobs, although the subsidiary of France-based Saint-Gobain says it will try to find roles at other CertainTeed and Saint-Gobain plants for them.
Production will stop at the unit at the end of August 2020. The plant will then continue using inventory until February 2021 with a skeleton staff. The plant was reported to be operating at 22 – 25% production capacity. The closure has been blamed on a decline for wallboard products in the Atlantic Canada region and elsewhere.

US: CertainTeed Gypsum plans to close its Cody gypsum wallboard plant on 3 April 2020. 50 jobs at the site will be lost when the subsidiary of France’s Saint-Gobain closes, according to the Associated Press. Saint-Gobain is reported to be attempting to sell the 26Mm²/yr facility.

UK: About 90,000t/yr of testliner capacity will soon be lost from the UK market. DS Smith will close its Wansbrough mill in Somerset, which also produces other products such as gypsum wallboard liner, on 23 December 2015.

DS Smith had announced a possible closure at the end of August 2015. At that time, the company had said the decision had been made after an assessment of the facility's long-term prospects.

The Wansbrough mill operates two paper machines. According to the plant manager, they manufacture roughly 90,000t/yr of testliner III, 30,000t/yr of coreboard, 18,000t/yr of recycled paper for bags, 12,000t/yr of recycled envelope paper and 10,000t/yr of other products such as wallboard liner.

DS Smith operates another paper mill in the UK, the Kemsley mill in Kent, where the company produces corrugated case material on three machines with a total capacity of around 800,000t/yr.

Saudi Arabia: The Khamis Mushayt Municipality has closed down 30 gypsum plants in Umm Srar neighbourhood for violating health and safety regulations. Mesfer Al-Wadai, mayor of the city, said that several plants were permanently closed, while others were closed temporarily until they correct their shortcomings.

"The municipality will be monitoring their activities to ensure they abide by the regulations," said Al-Wadai. "Some of the plants were found operating in old houses inside the neighbourhoods."

Al-Wadai said that the municipality's inspectors have also been conducting regular checks downtown in the Al-Darb area, where illegal workers sell goods from vehicles, pavements and on the streets. The inspectors confiscated more than 30 vehicles and fined their owners for selling goods without licenses.

"Members of the administrative control department in Khamis Mushayt conducted the inspections aided by the traffic department and other security bodies," said Al-Wadai. He added that the teams also removed two shacks on the Military City Road that were built without permits.

Canada: Georgia-Pacific has idled its Cape Breton gypsum mine in Nova Scotia due to the weak US dollar and low demand for wallboard in the US. The company is laying off 34 workers at the site whilst retaining eight others as a skeleton staff.

Georgia-Pacific told its workers on 2 December 2011 that it will indefinitely idle operations at its Sugar Camp quarry. "This is not a closure or a shutdown; it's an indefinite idle," said company spokesman Eric Abercrombie. "This is purely a business decision to idle the facility based on the North American market conditions and the weaker US dollar."

Georgia-Pacific had 73 employees in Cape Breton until the autumn of 2011. The Sugar Camp operation has been open since 1962. In December 2011 USG permanently closed the Fundy Gypsum mine in Hantsport, Nova Scotia.

Canada: USG has announced that it permanently closing the Fundy Gypsum mine in Hantsport, Nova Scotia. 50 people were working at the mine until it was idled earlier in 2011. The Hantsport mine had been producing gypsum since 1934.

Robert Williams, spokesman for USG, said that the decision to close is a direct result of weak demand for USG's flagship wallboard Sheetrock® in the United States. because of the ongoing housing recession. He said being a stand-alone mine an expensive freighter ride away from USG's four US manufacturing plants also hurt the Hantsport mine's viability. Williams said finding another buyer will be difficult.

"The main use for gypsum is gypsum wallboard,"' he said. "It is unlikely that anyone else would have an appetite for it."

The company once employed hundreds of people and spent US$50m in the 1990s to upgrade the Hantsport operation.

US: United States Gypsum Corporation subsidiary L&W Supply has announced the closure of eight of its stores, citing a continued weak US housing market. It also announced that it was to wrap up its Nevada-based custom door and frames business by the end of the current quarter. The closure is expected to cost the unit somewhere in the region of USD13-15m in total.