Gypsum industry news

France: Saint-Gobain has launched a Euro1.5bn bond issue. The issue consists of three Euro500m tranches, with maturities of three, six and 10 years. It is linked to two indicators of Saint-Gobain sustainability targets, namely its progress towards a 33% reduction in Scope 1 and 2 CO₂ emissions and an 80% reduction in production waste between 2017 and 2030. The company said that the transaction will enable it to extend the average maturity of its debt with mid to long-term funding.

CFO Sreedhar Natarajan said “Sustainable growth is at the heart of Saint-Gobain’s business model. The issuance of a sustainability-linked bond demonstrates the strength of Saint-Gobain’s commitments set out in its environmental and social governance roadmap. The group aims in particular to tackle the big energy and environmental challenges faced by the world with its contribution to reduce CO₂ emissions in its operations, and also decarbonise construction and industrial activities through its sustainable solutions”

Canada: USG subsidiary CGC plans to build a US$160m gypsum wallboard plant in Wheatland County, near Calgary in Alberta. The Government of Alberta and Invest Alberta Corporation will support the project with around US$3m from the Investment and Growth Fund. It is also set to benefit from local tax benefits. The new unit is expected to create over 100 new jobs once it is operational. Plant construction is scheduled to begin in 2023.

“Our customers in Western Canada have said they want a more efficient way to access our CGC wallboard products they’ve been buying for over 100 years. Shipping our products from Eastern Canadian or American manufacturing plants no longer meets their growing demand,” said Chris Griffin, President and chief executive officer of USG Corporation.

The proposed plant’s kiln will be powered using gas. Renewable electricity will be provided by an onsite solar power farm. The unit will also be the company’s first plant in Canada built with the technology to manufacture USG Sheetrock Brand EcoSmart Panels.

US-based USG became a subsidiary of Germany-based Knauf in 2019.

India: Saint-Gobain India plans to invest US$759m – US$1bn between 2021 and 2025 to expand its light materials capacity. The Hindu newspaper has reported that the majority of the investments will go towards capital expenditure projects, while the remainder will fund new acquisitions and accelerate the company’s digitisation. It estimated that new acquisition will total US$144 – 150m in value.

US: Eagle Materials offset higher energy and maintenance costs by raising the prices of its products in the first quarter of its 2023 financial year. This contributed to an 18% year-on-year sales rise to US$561m. The group achieved earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$184m during the quarter, up by 13% year-on-year.

President and CEO Michael Haack said "Our results this quarter exceeded our expectations, as our portfolio of businesses performed well, and we executed on the opportunities available to us. Construction activity remained healthy across our markets, and we realised broad pricing gains across our portfolio again this quarter."

The producer’s light materials sales rose by 30% year-on-year to US$248m due to increased gypsum wallboard sales volume and prices. Wallboard volumes increased by 5% to 74.1Mm2; their average price increased by 24%. Haack said “In our light materials sector, wallboard shipments and orders remain strong, but we recognise quantitative tightening will likely have an impact on residential construction activity in the future. In the near term, we expect record home construction backlogs to support product demand this year. With Eagle's excellent balance sheet, the favourable geographic positioning of our operations and consistent execution of our operating strategies, we are poised for a strong fiscal 2023."

France: Saint-Gobain’s sales were Euro25.5bn in the first half of 2022, up by 15% year-on-year from the same period in 2021. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 13% to Euro3.68bn. Sales rose by 15% in Northern Europe, by 14% in Southern Europe, Middle East and Africa, by 17% in the Americas and by 30% in Asia-Pacific. The producer ends the period with a net debt of Euro8.3bn, up by 9.2% from Euro7.6bn.

Chief executive officer (CEO) Benoit Bazin said, “Over the coming quarters, we are ready to adapt as needed to the consequences of rising interest rates and inflation along with the geopolitical and energy situation in Europe. Each country CEO has designed action plans, focusing especially on margins and cash flow. In this more uncertain environment, our target is to continue to outperform our markets and our deep transformation will enable us to demonstrate greater resilience. Over the past three years, our teams have successfully risen to the challenges of the coronavirus pandemic, supply chain disruptions and a strong inflationary environment. With portfolio rotation of almost Euro10bn in sales since the end of 2018, and with a local organisation keenly aware of immediate realities on the ground, Saint-Gobain has significantly increased its value creation. Against this backdrop, I am confident in the group’s 2022 outlook, which targets a further increase in operating income compared to 2021 at constant exchange rates.”