Gypsum industry news

Winstone Wallboards has been in the spotlight in recent months over ongoing supply issues of gypsum wallboard in New Zealand. Many places around the world have suffered from similar shortages of building materials following the coronavirus lockdowns. However, the shortages in New Zealand have started to generate a considerable response, as we detail below.

Rightly or wrongly, Winstone Wallboards’ dominance in the market locally has been perceived as part of the problem. It operates the country’s only two wallboard plants and it is frequently reported to hold around a 95% share of the market. It is also currently building a new 10Mm²/yr gypsum wallboard plant at Tauriko near Auckland. Commissioning is planned for mid-2023. Once completed the company will have a total national wallboard production capacity of around 40Mm²/yr.

The current problems date back to the start of the coronavirus pandemic when New Zealand started implementing its lockdowns and residential renovation work increased. The issue then gained prominence in September 2021 when Winstone Wallboards started issuing regular supply updates on its website as the government began to relax the lockdown at that time. It says that order volumes more than doubled from November 2021 to February 2022 as customers started to bring forward their orders to cope with general building material shortages. It coped for a while by using its inventory stock and by bringing in imports from Australia but the latter stopped in November 2021 due to shortages there also. So it proposed introducing an allocation model from July 2022 whereby customers could place orders no more than one month in advance. It then says it worked on increased output through plant and process upgrades with the installation of a heat exchange system for its Auckland plant planned for July 2022 and by securing further imports from an Australian producer for the second half of 2022. As of late June 2022 it expected the market to return to equilibrium by October 2022.

Unfortunately, some consumers have been vocal about their unhappiness with the supply situation. Rental property developer Simplicity Living took to the press to complain about the delays in June 2022. It added that it had started importing its own wallboard from Thailand instead. The story then became nastier when Simplicity Living alleged that Winstone Wallboards’s parent company, Australia-based Fletcher Building, was blocking imports of certain colours of wallboard. Fletcher Building clarified in the same article that it had trademarked “specific” shades of blue, green, mauve and pink to differentiate its products in the marketplace. This, of course, will be familiar to insulation sector readers of Global Gypsum as Owens Corning is arguably the world’s most famous and successful example of how to copyright a colour. It’s unclear how much of an impediment Fletcher Building’s colour trademarks have been to imports to New Zealand. The company did say in an investor presentation in late June 2022 that it had granted 10 trademark royalty-free licenses so far to allow other companies to import wallboard. To give readers an idea of the amount of attention being focused on Winstone Wallboards and its connected companies, when a shipment of wallboard was delivered early to a construction subsidiary of Fletcher Building, apparently breaking the company’s own supply rules, a video of the incident started circulating on social media before being picked up by national news channels.

Government oversight then stepped up a notch in late June 2022 with the formation of a ministerial taskforce to tackle the wallboard shortage. It plans to troubleshoot the regulation of alternative plasterboard products, look at ways to streamline the use of products that are currently untested in the New Zealand market, provide advice on building consent and explore new distribution models, amongst other goals. Alongside all of this, the New Zealand Commerce Commission started a market study into residential building supplies in November 2021. Its aim is to look into any factors that may affect competition for the supply or acquisition of key building supplies. A draft report for consultation was scheduled for release in July 2022 and the final report should be due in December 2022.

Winstone Wallboards’ woes are clearly down to the disruption caused to supply chains by the coronavirus pandemic. However, fairly or unfairly, its local market dominance has exposed it to most of the blame for the situation in the eyes of some of the New Zealand public. Its products are so integrated into the usage of wallboard in the country, for example, that the Gib brand is specified by name in many of the region’s building consent application documents. The government has now become involved adding further to the public scrutiny. Structural changes may or may not be required at some or multiple levels of the New Zealand wallboard market to fix the current crisis. Yet, funnily enough, in one interview Fletcher Building chief executive officer Ross Taylor raised the issue of customers developing the ‘fear factor’ in response to hearing about shortages and then buying more than they might need. This may sound familiar because it is exactly what happened at the start of the worldwide coronavirus lockdowns when people started panic buying toilet-roll. Whatever else is happening in New Zealand, human nature can’t be helping either.

Uzbekistan: Germany-based Knauf has launched a new 17Mm²/yr gypsum wallboard plant at Fergana. The unit can also produce 40,000t/yr of dry building mixes. The project had an investment of just under Euro19m. It is the company’s third production plant in the country.

UK: The Competition and Markets Authority (CMA) has formally launched the first phase of a merger inquiry into the proposed acquisition by Saint-Gobain of GCP Applied Technologies. The competition body said that proposed merger had met the threshold for investigation under UK law. The CMA will now decide whether to refer the merger for further scrutiny by 21 September 2022.

Saint-Gobain said it had agreed to buy construction chemicals producer GCP Applied Technologies for Euro2bn in late 2021 with a conclusion date to the transaction by the end of 2022.

Germany: Knauf Group says it has made “good time in restorations” following a cyber attack in late June 2022. It said it was continuing to work on reinstating operating procedures and was on its way to achieving this. It added that many of its online systems and email were back to normal functionality and that other processes were still being restored. In separate coverage, Bleeping Computer reports that the Black Basta ransomware gang has claimed responsibility for the attack.

Philippines: Knauf Gypsum Philippines has opened its first gypsum board training centre in the country in Quezon City. The ‘Knauf Academy’ is intended to help train local construction workers, according to the Business Mirror newspaper. Mark Sergio, the managing director of Knauf Gypsum Philippines and Alexander Schmidt, Acting Deputy Head of Mission at the German Embassy, attended the opening event.

Sergio said “The intent of the training centre is two-fold: we want to make sure that we can improve the capability, the workmanship quality and skills of Filipino installers. We also want to make sure that because of this, we’re able to deliver the best customer experience for our architects, developers and contractor-partners.”

US: CertainTeed has completed an upgrade to the grinding control technology at its gypsum wallboard plant at Buchanan in New York state. The new variable frequency drive at the site can vary the speed at which raw gypsum is ground and save energy accordingly. It is expected to reduce the plant’s energy consumption by nearly 700,000kWh/yr. Other recent sustainable upgrades at the plant include the installation of 2.4MW solar array on its roof in 2018.

Parent company Saint-Gobain North America has announced a number of sustainability-focused upgrade projects at its wallboard plants so far in 2022. These include switching to renewable energy at its Montreal plant in Quebec, using recycled materials at its Nashville plant in Arkansas and installing a waste heat recovery system at its Vancouver plant in British Colombia.

Belgium: Eurogypsum, the European federation of national associations of producers of gypsum products, has welcomed proposed changes to the European Union’s (EU) Construction Products Regulation (CPR). It said that it welcomed “…the proposal presented by the European Commission (EC) on 30 March 2022 as an ambitious basis to strengthen and modernise the existing rules, as well as to speed up the uptake of sustainable and circular practices in the construction product manufacturing industry.”

In preliminary feedback comments the association said that it supports a European Committee for Standardisation (CEN) driven system as opposed to increased regulatory powers for construction material manufacturing that the new proposals might create. For the assessment of the environmental performance of products the association wants more clarity about any potential new digital approach. It reiterated that it supports the continued use of Life-Cycle Assessments (LCA) and Environmental Product Decelerations (EPD). It also called for product labelling to be provided in an electronic format with easy-to-understand pictograms as the norm. However it suggested that any consumer should be able to request a paper version if required.

The CPR regulations were originally introduced in 2011 and are recognisable to consumers through the use of the CE (Communauté Européenne) markings on certain products. The EC has since decided to revise the regulations to fit with newer policy priorities including the European Green Deal.

UK: Saint-Gobain has brought its British Gypsum, Celotex and Isover gypsum wallboard and insulation brands together under the Saint-Gobain Interior Solutions portfolio. The marketing labelling is intended to allow customers to access products, solutions and services.

Dean O’Sullivan, the managing director of Saint-Gobain Interior Solutions, said “This collective three-brand approach allows customers to access the know-how and expertise of each brand in one place, through our dedicated sector and sales teams. This will bring a range of benefits to our customers, allowing us to provide even better support, with even simpler access to our market-leading systems and products.” He added, ”Each brand continues to play an important part, but by having a single point of contact and sector specific teams, we are confident our customers will realise the strength in collaboration and solutions that ultimately help them meet their needs for outstanding performance, longevity and value.”

Japan: Chiyoda Ute has issued a share sales request as part of ongoing plans to form a joint-venture with Germany-based Knauf. Knauf is expected to acquire the outstanding shares. Shares in Chiyoda Ute will then be delisted in late July 2022. The move follows a tender offer from Knauf that was issued in April 2022. The eventual plan is form a joint-venture between the companies with Knauf holding a 75% share.

UK: Portugal-based Gypfor has agreed to sell its upcoming Newport gypsum wallboard plant to Germany-based Knauf. Gypfor began building the plant at Associated British Ports’ Port of Newport in March 2021. Knauf estimates that it will commission it later in 2022, and commence full operations in 2023. The plant will be equipped with solar and wind power plants, as well as on-site gypsum wallboard recycling facilities. 54 people will be employed in gypsum wallboard production at the site. Knauf says that the addition of the new plant to its existing facilities at Immingham, Lincolnshire, and Sittingbourne, Kent, will enlarge its UK capacity by 20%.

Knauf’s UK managing director Ian Stokes said “This new plant will significantly increase our ability to service customers throughout the UK, and particularly those in South Wales, the Midlands and the South-West of England. It is a very exciting move for Knauf and, following recent investment in increasing the capacity of Knauf Insulation, reflects the confidence of the Knauf Group in the UK construction sector.”