Gypsum industry news

Members of Eurogypsum, the European Gypsum Association, gathered at the Les Atelier des Tanneurs in Brussels on 27 - 28 April 2022 to formally celebrate the 60th Anniversary of their association, despite a delay of 12 months due to Covid restrictions. Over two days, they participated in meetings and panel sessions reminiscent of pre-pandemic times. Attending the Open Congress session on 28 April 2022, Global Gypsum found the event to be very dynamic and surprisingly open.

The Open Congress began with welcomes from the moderator, Knauf Insulation’s Sian Hughes and outgoing Eurogypsum President Emmanuel Normant, of Saint-Gobain. He introduced the past 60 years as one of ‘enormous change’ for the sector, but this was not meant to be a retrospective. Turning to the next 60 years, Normant said that gypsum’s inherent benefits, including its low embodied CO₂ emissions, recyclability, high degree of safety and ease of use, would make it even more crucial to global development in the future than in the past.

A series of quick-fire presentations from the industry’s big hitters then highlighted a wide range of ways to increase the sustainability of our sector.

Saint-Gobain’s Klaus Birk introduced Gyproc's project to switch its Fredrikstad wallboard plant in Norway to use a 100% electric wallboard production process by 2023. This will use renewable energy, predominantly sourced from hydroelectric power, and lead to a 70% drop in CO₂ emissions. This approach could be applicable to any wallboard plant with access to sufficient renewable power.

Knauf's Jörg Demmich then spoke about a project to extract gypsum from the ‘waste’ from the lithium production process. Even the best lithium ores only contain 3 - 6% lithium by mass, leaving 94 - 97% currently unused. As electric mobility grows, by-product gypsum from the lithium sector could partly offset the expected fall in flue-gas desulphurisation (FGD) gypsum supplies.

Iryna Yermakova introduced the Etex Group's approach to the wallboard plant of the future. One area she highlighted was the potential for prefabrication at the wallboard plant before panels reach the job site. This has the potential, on some projects, to save up to 10% of the wallboard cost, transport cost and CO₂ emissions of the board used. Surely a quick win for contractors.

Nikolai Halle from Cobuilder introduced the Define tool, freely-available to the construction sector. Define will act like the Swift payment system, but for sustainability data instead of financial data. This would unify different sustainability metrics to cut through the confusing terms used by producers and reveal the 'real' performance of different products, rather than how effectively their attributes are marketed.

The keynote presentation, from the former European Commissioner for the Environment Janez Potočnik – ‘The Father of the Circular Economy’ - then highlighted why innovation is key, not only to the future of the gypsum sector, but to the planet itself. At current rates, the mass of man-made material will be three times larger than all biomass by 2040.

To avoid this, Potočnik argued that the entire economy needs to become service-based, rather than product-based. Under such a model, wallboard producers would become part of the ‘building envelope services sector’ rather than selling wallboard. The desire is then to sell wallboard with a long service life, that can be repurposed and recycled, rather than selling ever-increasing volumes of board.Taking this approach across the entire economy would help society to maximise gross domestic product while reducing environmental impacts, eventually decoupling them from each other entirely. Potočnik concluded that nature is already the 'perfect' circular economy. Humans just need to reintegrate into it.

To say that the panel discussion that followed was ‘lively’ would be an understatement. Member of the European Parliament Iskra Mihaylova, speaking the day after Russia halted gas supplies to her native Bulgaria, said that talk of energy independence and solidarity was 'not enough' and that Europe needed to act on the European Union Green Deal, particularly with a view to energy and resource efficiency and security.

Josefina Lindblom, the European Commission’s Policy Officer for Sustainable Buildings for Circular Economy, introduced what she hoped would become the next buzzword: ‘sufficiency’ - properly taking pause to consider what is truly required of new buildings. This includes the need to apply full circularity to renovation projects.

Adrian Joyce, from the European Alliance of Companies for Energy Efficiency in Buildings, asked the audience to think not in terms of 'energy efficiency,' but 'conservation of energy.' The two terms are subtly different, with the latter akin to ‘sufficiency.' Both point to the need to reduce the use of resources, not just the effectiveness which we use increasing amounts of resources.

Tristan Suffys, Secretary General of Eurogypsum, said that gypsum is well suited to fit into the low-CO₂, low-resource-use sector of the future. He called for re-use of derelict buildings, re-purposing and optimising the use of space by building above existing buildings.

The Open Congress drew to a close with a speech by the incoming President of Eurogypsum (and Head of Corporate Social Responsibility at Etex) Jörg Ertle. He told Eurogypsum members that the 'doors' marked 'Green Deal,' 'Decarbonisation,' and 'Recycling' were all 'open' and that they should be making the most of the opportunities behind each. From Global Gypsum’s perspective, it seems that they have burst through each of the doors into the rooms behind. Some are even measuring up for wallboard.

In conclusion, it appears that the European wallboard sector is at the start of a major increase in sustainability efforts. This will be backed by politicians who are keen to decouple their economies from Russia’s and a public that is increasingly asking for change. And, with three major global producers - Knauf, Saint-Gobain and Etex - based in Europe, between them sharing 47% of the world’s wallboard capacity, we can expect to see these innovations spread to other regions rapidly.

Here’s to the next 60 years!

UK: Knauf UK has joined Planet Mark, an organisation that offers sustainability certification to businesses via the independent verification of social and carbon data. In doing this, Knauf has also committed to a CO₂ emissions reduction of at least 2.5%/yr. Planet Mark is in the process of verifying data submitted by Knauf based on its 2021 operations and Knauf will be publishing a report later in 2022 which will outline the findings. The outcome of the report will shape Knauf’s sustainability strategy moving forward.

Steve Malkin, the chief executive officer of Planet Mark said “We are thrilled to welcome Knauf into the Planet Mark community. Without precise measurements, progress cannot be tracked and Knauf has taken the vital steps necessary to begin taking action on its emissions.”

Japan: Germany-based Knauf Group has launched a public tender offer to increase its stake in the Japanese wallboard producer Chiyode Ute from 50% to 75%. Knauf is the largest wallboard producer by installed capacity outside of China.

Speaking to Global Gypsum, Chiyode Ute’s Vice President and Representative Director Frederick Knauf said that the founding family Hirata would retain a 25% stake in the company. He added “For Knauf Group this is very exciting. Japan is the world’s third-largest wallboard market and one in which Chiyode Ute has a 20% market share. It is also a challenging market, where customers expect the best in terms of quality, delivery and customer service. We will continue to work with the Hirata family to further develop the company’s capabilities to better serve this demanding market in the future. Chiyoda Ute will be fully integrated into the Knauf Group.”

Russia/Ukraine: Jörg Schanow, a member of the management board of Knauf, says that the company has no plans to leave the Russian market. In an interview with the Süddeutsche Zeitung newspaper he said that Russian production sites were still running as normal.

The company has set up crisis management team since the start of the war in Ukraine in late February 2022. It has been meeting daily and discussing the situation with local management in Russia. Schanow said that the biggest business problem so far was the effect of US and European economic sanctions upon Russian banks and the consequences upon moving money between banks, suppliers and customers. The Germany-based company employees 3900 staff at 14 sites in Russia. It originally purchased a gypsum plant at Krasnogorsk near Moscow in 1993.

Knauf also has operations in Ukraine. It closed its gypsum wallboard plant in Donbass in response to the current war on 24 February 2022 ‘as a precaution,’ according to the TZ newspaper. The staff were sent home and the plant will remain closed into further notice. The plant had 589 employees at the end of 2021, none of whom where German nationals.

Japan: Chiyoda Ute’s revenue remained stable at US$165m in the first nine months of its financial year to 31 December 2021. Its net profit grew by 53% year-on-year to US$5.37m from US$3.52m in the same period in 2020. The gypsum wallboard producer reported that domestic house building had grown from March to December 2021 in tandem with a relaxation in coronavirus health measures from September 2021. It said that national gypsum wallboard shipping volumes grew by 2.4% to 344Mm² in the nine months to 31 December 2021. It added that due to the capital and business alliance it started with Knauf Group in January 2020 it viewed its future prospects as ‘competitive.’ In late 2019 the Germany-based construction materials company increased its shareholding in Chiyoda Ute to 45% from 26%.

Spain: Knauf has received a 30 year extension to its quarrying permit supporting its Escuzar wallboard plant in Granada. The company also plans to increase production capacity at the unit, according to Europa Press. The plant was established in 2008 and it has a capacity of 50Mm²/yr.

Tunisia: Elizabeth Knauf has expressed Knauf’s interest in growing its production capacity for the local market and export. The group president of the board of directors met with Prime Minister Najla Bouden in mid-January 2022, according to the Agence Tunis Afrique Presse. Bouden praised the success of Knauf Tunisia’s training centres at Tataouine and Meknassy (Sidi Bouzid). The group acquired Plâtres Tunisiens in 2004 and operates a plaster plant at Meknassy.

Germany: Knauf Gips has partnered with Canada-based lithium hydroxide producer Rock Tech Lithium and waste management company Papenburg Entsorgung Ost to found the Institute for Technologies and Economics of Lithium (ITEL) at Halle (Saale) in Saxony-Anhalt. The institute aims to develop an inter-sector, CO2-neutral recycling economy for lithium in Germany. This will include the use of gypsum from lithium hydroxide production in gypsum wallboard production. ITEL has appointed Martin Luther University Halle-Wittenberg academics Ulrich Blum and Ralf Wehrspohn as its managing directors.

ITEL said “The switch to electromobility will make Germany the central location for battery production in Europe and thus also for the production of the crucial precursor lithium hydroxide. The reduction and reuse of the by-products generated during the refinement of lithium is the focus of the institute's work. Another focus is research into new production steps to optimise by-product value creation.”

Australia: Boral has sold its 50% stake in USG Boral to Germany-based Knauf for US$1.02bn. The profit on sale after tax will go towards reducing the group’s net debt by 21% to US$1.15bn from US$1.45bn. This will leave a US$763,000 surplus for reinvestment or return to investors.

Following on from the sale, Boral has launched a share buy-back, ending in April 2022. It intends to purchase 10% of shares on issue. The group says that the USG Boral sale proceeds will fund the investment.

Chief executive officer and managing director Zlatko Todorcevski said “The sale of our 50% interest in USG Boral to Knauf for an attractive premium creates substantial value for Boral’s shareholders. The sale enables Boral to reduce net debt to our current target and create surplus capital available for return to shareholders, which is consistent with Boral’s financial framework.” He added “We believe that an on-market buy-back is the most effective method of returning this surplus capital to our shareholders.”

Australia: Boral has given details of its US$1.02bn sale of the 50% stake in USG Boral to Germany-based Knauf. It said that it expects the transaction to close in the 2021 financial year, adding, “If the transaction has not closed by 30 September 2021 – where Knauf has not completed certain divestments required by regulators – then, if either party terminates, Knauf must pay Boral a termination fee of US$50.0m.”

Chief executive officer (CEO) and managing director Zlatko Todorcevski said, “We have been working with Knauf for some time to find the best path forward for the business following Knauf’s acquisition of our joint venture partner USG. We recognise that it makes sense for Knauf – being the world’s largest plasterboard player – to have 100% ownership of the business. USG Boral is a great business, and very well positioned to perform strongly under the ownership of Knauf. The strength of the joint venture business and its prospects are fully reflected in the sale price as demonstrated by the attractive premium, which is a great outcome for Boral shareholders. The sale of Boral’s interest in USG Boral to Knauf will be a step to simplifying Boral’s geographic footprint and product portfolio.”

Final cash proceeds “will be applied to reduce net debt and fund growth investment in the retained portfolio” and remain subject to “post-completion adjustments.”