Gypsum industry news

Brazil: Knauf has inaugurated its second wallboard plant in Camacri, Bahia. The US$66m plant will increase the company's annual production in Brazil by 80% to 45Mm²/yr. The company has forecast a 15% increase in sales volume in 2014, with the new plant supplying the north, north east and part of the central west regions of the country, with the possibility of exporting to the Caribbean and Africa. The plant is expected to be operating at full capacity within four to five years.

US: Tennessee State has launched a crackdown on construction companies classifying full-time workers as contractors in order to avoid taxes and insurance. A US$300,000 fine for misclassifying construction workers may be having a deterrent effect, according to officials with the Tennessee Department of Labour. The penalty was the largest to date in a state-wide crackdown on labelling full-time employees as contract workers.

TJ Drywall of Nashville was making US$2m/yr, but only paying 5% of what regulators say that they should have been in workers compensation and unemployment insurance premiums.

The Labour Department's Scott Yarbrough said that the practice remains rampant in the construction industry. "It upsets me when somebody who is following the rules, paying their insurance and paying their taxes like they're supposed to, is trying to compete with people who aren't."

After seeing the giant fine imposed, Yarbrough said that another business owner in Sumner County volunteered to reclassify his contract workers to avoid a fine. The money collected in fines for misclassifying employees will go toward hiring more investigators.

US: United States Gypsum (USG) will invest US$19m to upgrade its Oakfield paper mill in Genesee County, New York. USG has had operations in Genesee County since 1902. The company decided to invest in machinery upgrades and utility improvements in the Oakfield mill to ensure the future of the mill and retain 98 jobs. It also plans to add 12 new positions.

The Oakfield mill processes 250t/day of old corrugated waste, making it a major recycler in New York State. The facility once made USG's Sheetrock brand wallboard, but that operation closed in 2001. The plant now makes the brown back-side paper for wallboard.

According to New York State Governor Andrew Cuomo's office, the mill has been at risk of closure as other USG plants have the capability to produce more types of paper. The office said that USG qualified for up to US$665,000 in performance-based Excelsior Jobs programme tax credits and a US$400,000 capital grant from the state in return for its proposed US$19m investment and job creation commitments. USG also received a US$180,000 Community Development Block grant from the State Homes and Community Renewal programme and is applying for a grant from National Grid to assist with electrical infrastructure upgrades.

"USG's decision to strengthen its operations in New York is another example that the upstate economy is coming back," Cuomo said. "By supporting this expansion, we are securing and creating more than 100 jobs in the region and paving the way for continued growth by an employer with more than a century of history in Genesee County."

Russia: Saint-Gobain has announced that it intends to build a gypsum plant in one of the lime fields in Chelyabinsk Oblast. The plant will produce products under the Gyproc name. The investment amount has not been reported. Saint-Gobain also has a company producing Linerock basalt fibre at the Minplita plant in Chelyabinsk Oblast.

New Zealand: Building supply merchants are reluctant to stock products of Winstone Wallboards' rivals and are squeezing alternative goods, claimed the chief of a competing business who supplied documents to New Zealand's Commerce Commission (CC).

Kevin van Hest, managing director of Elephant Plasterboard, which has only 3% of the market share in New Zealand, said that suppliers were shy about stocking or selling alternatives to Winstone's Gib because they had strong financial reasons not to. Van Hest claimed that the reasons include personal rewards like invitations to sporting and other events, overseas trips and financial payments.

The Commission announced in September 2013 that it was looking into the allegation, which remains to be concluded. Rick Osborne of Winestone Wallboard's parent company Fletcher Building said at the time that his business was advised that the CC intended to inquire into its wallboard supply arrangements with building supplies merchants. "The company will fully cooperate with the Commerce Commission and is confident that its supply arrangements comply with the Commerce Act," Osborne said.

A spokesman for Fletcher Building said that the system in operation actively rewards those building supply merchants who sold Winstone board, but there was nothing wrong with the deal. "Rebate structures are prevalent in most industries and in reality amount to price competition, with supply terms being based on volume and the duration of contractual relationships," he said. "Fletcher Building is confident that its arrangements are not anti-competitive and do not breach the Commerce Act. In that regard we aim to prevent any potential anti-competitive conduct through our internal compliance programmes," said Fletcher Building's spokesman.

David Thomas, Winstone's general manager, said that the business has a 94% market share because it manufactured and delivered the best product to customers. "People do have other options and they have for the last 20 years,'' Thomas said, citing Elephant wallboard and other products including Chinese board. But van Hest said that a combination of incentives and commercial pressure on merchants meant he couldn't get any more than 3% of the wallboard market, despite being in business since the 1980s.

Lack of competition and arrangements with merchants was one of the big factors forcing New Zealanders to pay 70% more for wallboard than Australians, which increases house-building costs by 40% compared to Australia. Big chains will sell Elephant wallboard, but not necessarily from their shop floors, van Hest said. Instead, if they sold it at all, they took a builder's order and arranged delivery from van Hest's Glendene warehouse to the construction site. Very few big chains would stock Elephant board. "Stores are reluctant to trade too much in Elephant wallboard because of the financial and other incentives," said van Hest.

India: India's FACT-RCF Building Products Ltd hopes that sales of gypsum-based building products will help it to reach US$50.8m in revenue in the current fiscal year.

The company, which is a joint venture between Kerala-based Fertilisers and Chemicals Travancore and Mumbai's Rashtriya Chemicals and Fertilisers, has received an encouraging response from users of gypsum products. End users have already purchased around 23,226m² of products, according to Jaiveer Srivastava, chairman and managing director of FACT-RCF.

The company has set up a 1400000m²/yr capacity plant in Kochi, Kerala at an investment of US$25.4m. Srivastava described the gypsum-based building products as a solution to address the issues connected with natural resource constraints in the building sector at a time when the availability of water, sand and labour are becoming scarce.

Germany: Wacker, the German chemical company, has reorganised its distribution network for silicone and polymer products in central and eastern Europe.

As part of a regional optimisation process, the existing partners IMCD, Euro-Him-1, Hellermann, Radka, Revada and Variachem will be entrusted with the distribution of Wacker's product range for silicones and polymers. Effective from 1 July 2014, these partners will replace the previous distribution partner Brenntag CEE.

IMCD, Euro-Him-1, Hellermann, Radka, Revada and Variachem already distribute products from the group's silicones and polymers portfolio in different regions. As part of the reorganisation of the distribution network in central and eastern Europe, Wacker is further extending these partnerships.

China: China Vanadium Titano-Magnetite Mining said that it has agreed to acquire 51% of the paid-up registered capital of Sichuan Haoyuan New Materials Co Ltd at US$59.3m. Sichuan Haoyuan's wholly-owned subsidiary Hanyuan County Xinjin Mining Co Ltd currently holds the mining permit of the Shigou gypsum mine, which is located in Sichuan Province. The mine has a raw gypsum output capacity of 0.30Mt/yr.

Belgium: During its General Assembly held in Brussels, Belgium on 21 May 2014, Eurogypsum elected the president of Saint-Gobain Gypsum Claude-Alain Tardy as president of Eurogypsum for the period of 2014 - 2016. Tardy succeeds Dott Maurizio Casalini, managing director of Knauf Italy, on the expiry of his statutory term of office.

Tardy is a civil engineer graduate of the École Centrale de Paris. He also has an MS in Industrial Engineering & Engineering Management from the University of Stanford, US. Tardy joined Saint-Gobain in 1981 and between 2005 and 2009 he was chief operating officer of Saint-Gobain Insulation, before being appointed as president of Saint-Gobain Gypsum in 2009.

"I am convinced that wallboard and plaster solutions will play a growing role in the future," said Tardy. "The unique attributes of our products; recyclability, ease of installation, fire resistance, acoustics and thermal properties make our systems inescapable for the construction and renovation of buildings. During my presidency I will concentrate my efforts on the promotion of gypsum industry solutions as the best option to create safe and comfortable interior spaces."

US: Paul Johnson Drywall Inc., an Arizona-based wallboard contractor, has ended its relationship with a labour contractor that misclassified workers as independent contractors, according to the US Department of Labour (DOL). Paul Johnson Drywall agreed to pay US$556,000 in overtime, back wages and liquidated damages to at least 445 current and former employees. It will also take steps to ensure misclassification does not occur again and will pay US$44,000 in civil penalties.

Paul Johnson Drywall had entered into a contract with Arizona Tract to supply wallboard labour. However, Arizona Tract misclassified workers as 'member/owners' and violated overtime and record-keeping provisions of the Fair Labor Standards Act (FLSA), according to the DOL. Paul Johnson Drywall also, prior to being solicited by Arizona Tract, failed to pay proper overtime to employees who were paid on a piece-rate basis. Investigators also found that Paul Johnson Drywall failed to keep complete and accurate records.

The company agreed to take steps to ensure its workers are properly classified and paid as employees and to improve compliance in the construction industry. Paul Johnson Drywall will hire a third-party monitor to ensure compliance and require any wallboard subcontractors to conduct regular training of supervisors and employees regarding the requirements under the FLSA. Paul Johnson Drywall has announced a classification initiative that includes reactivating 1325 workers as W-2 employees and hiring 627 new employees as a first step in its FLSA compliance programme, which was developed in conjunction with the DOL.

"We pride ourselves on having the most professional crews in the state and welcomed the opportunity to evaluate employment practices with the DOL," said Cole Johnson, president of Paul Johnson Drywall. "Our crews allow us to deliver clients unparalleled on-time delivery in the safest manner and as a result of these high expectations, we consistently pay our crews the highest wages. We're excited to be taking our business, as well as our trade and related industry, to the next level."