Gypsum industry news

Securing sustainable energy sources has been the priority for some of Spain’s gypsum wallboard producers in recent weeks.

In late November 2023 Pladur revealed that it plans to use green hydrogen at its production plants from the second half of 2024 onwards. It will start at its Valdemoro plant near Madrid before rolling usage out elsewhere afterwards. The subsidiary of Belgium-based Etex is also considering trials with biomethane and biogas. Then a few weeks later in early December 2023 Knauf Ibérica announced that it is planning to build a 7.5MW biomass unit at its Guixers plant in Lleida. Commissioning is currently scheduled for late 2024. This follows the installation of solar panels at the site earlier in 2023. Along similar lines, Saint-Gobain Placo signed an 11-year power purchase agreement (PPA) with electricity company Endesa at the end of 2022 to supply 150GWh/yr of renewable energy. Together with a previous renewable energy deal this was expected to cover up to 65% of the group’s electricity requirements in Spain.

Wallboard plants all over the world have been embarking on sustainable energy drives in recent years but the particular drivers in Spain are worth mentioning. The country’s high electricity prices have frequently been raised by large-scale industrial users in the past, often in terms of competitiveness of exports. However, the situation worsened following the start of the war in Ukraine in early 2022 as the wholesale price of coal and gas jumped. The high price of gas in particular pushed the electricity prices up in Spain and wallboard plants typically use both sources of energy. The government eventually capped the price of gas and coal for power generation. It then offered an aid scheme for large-scale gas users but missed the gypsum sector out, much to the chagrin of the Asociación Técnica y Empresarial del Yeso (ATEDY), which complained about it at the end of 2022. The gypsum industry was later included in July 2023 when a funding scheme was announced. It’s unknown how much this initiative has helped wallboard manufacturers but the shift to renewables by the three main companies mentioned above tells its own story.

Despite the energy supply problems a new entrant to the wallboard market in Spain announced itself in March 2023. Italy-based Fassa Bortolo said it was going to spend Euro90m on building a wallboard plant at Tarancón in Cuenca. No commissioning date or main supplier name has been disclosed, but Italy-based Bedeschi did say in late November 2023 that it was providing raw bulk material handling equipment including an apron feeder, stacker, excavator and conveyor belt line. There has also been no word on how the new plant will power itself.

On the topic of exports, Spain has long been one of the world’s larger shippers of natural gypsum. Data from the Geological and Mining Institute of Spain (IGME) shows that the country exported 9.2Mt of gypsum in 2021 with a value of Euro60m. Whether this changed in 2022 when the energy prices increased is unknown at the time of writing. In 2021 Almería was the epicentre of the country, accounting for 70% of the 13Mt total volume of gypsum extracted that year with a quarry at Sorbas, operated by Saint-Gobain Placo, reportedly being the second largest in the world. Most of the gypsum extracted at Sorbas was then driven by truck to the Port of Garrucha, making it the busiest gypsum port in Europe by volume.

Eurogypsum, the European federation of national associations of producers of gypsum products, launched its industry roadmap to net-zero by 2050 on 9 November 2023 at the Global Gypsum Conference 2023, which took place in Chicago, US. Various actions and technologies were unveiled as part of the plan including some of the approaches being taken in Spain such as using ‘green’ electricity, biomass and green hydrogen. All of these suggestions were split into short, mid and final term feasibility categories. So, for example, using renewable sourced electricity is dependent on it being affordable and available. It was placed in the immediate category. Yet, using biofuels or green hydrogen is flagged as requiring investment, so deemed as short-to-mid term.

Spain presents a case where the cost of energy for industrial users may be aligning with sustainability goals. How this translates onto balance sheets remains to be seen though. These kinds of sustainable energy projects may only be slowing the inevitable as raw material and energy costs mount anyway leading to tighter margins, increased competition and potential consolidation. The gypsum sector in Spain may well be testing out slightly earlier than elsewhere how much a more sustainable world will actually cost.

Spain: Knauf Ibérica is planning to build a 7.5MW biomass unit at its Guixers gypsum wallboard plant in Lleida. The unit will be operational by December 2024 and create around 200 jobs, according to La Vanguardia newspaper. The company intends to source wood biomass locally. Once operational it is expected to reduce the plant’s CO₂ emissions by 35%. The Guixers plant also installed photovoltaic solar panels earlier in 2023.

Alberto De Luca, chief executive officer of Knauf Ibérica, said “The launch of this project is a significant step towards reducing our carbon footprint and achieving zero emissions by 2045."

Spain: Pladur plans to start using green hydrogen at its Valdemoro gypsum wallboard plant from the second half of 2024. The subsidiary of Etex will then roll out the use of hydrogen at its other plants in the country, according to Forbes. It is also considering using biomethane and biogas generated from organic waste in its production processes.

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.

Peru: Nicolás Restrepo, the Andean Region manager for Etex, says that an ongoing upgrade to the Huachipa gypsum wallboard plant is set to be finished by 2025. In an interview with the Gestión newspaper he revealed that the US$31.5m project should be 60% complete by the end of 2023. Once commissioned the upgrade will double the production capacity of the unit.

Japan: Chiyoda Ute intends to launch a gypsum board product, Chiyoda Hokkaido Board, which uses 50% recycled gypsum, from December 2023. The product will be manufactured at its Muroran plant in Hokkaido. Subsidiary Tokuyama Chiyoda Gypsum opened a gypsum recycling plant in Muroran in September 2023. Chiyoda Ute owns a 49% share in Tokuyama Chiyoda Gypsum and Tokuyama Corporation owns the remainder.

US: Georgia-Pacific has officially opened its new gypsum wallboard plant at Sweetwater in Texas. The project had a budget of US$325m and it is the first new wallboard plant that Georgia-Pacific has built since 2004.

David Neal, president of Georgia-Pacific Gypsum said “The two operations combined will supply customers and distribution partners with more than 92Mm² of gypsum products each year and create more than 100 new jobs. This investment strengthens Georgia-Pacific's capacity to meet growing customer needs in Texas' residential, commercial, and industrial construction markets.”

The new plant is adjacent to Georgia-Pacific’s first gypsum wallboard facility in Sweetwater, purchased by the company in 1996. The existing facility has been operating in Nolan County since the 1950s. Over the last year, Georgia-Pacific has invested approximately US$16m in technical and safety upgrades at the plant, including an Energy Optimization System (EOS), auto-guided vehicles (AGVs), an automated robotic riser system, auto-splicing equipment, and upgraded packaging equipment. It has also upgraded the employee facilities.

Kazakhstan: Russia-based Volma has completed its acquisition of a gypsum plant in Inderborsky, Atyrau Region and a nearby quarry. No value for the transaction has been disclosed. The company noted that the stone extracted from the quarry has a gypsum content of 94%. The plant has started recruiting employees and will supply the local market with products under the Volma brand. Reports in the Russia-based media in August 2023 indicated that Volma was preparing to buy a plant in Kazakhstan with a production capacity of 120,000t/yr of building gypsum and other products.

Kyrgyzstan: Representatives of Germany-based Knauf have discussed plans to build a gypsum plant in the country. Knauf General Partner Uwe Knotzer said that the company is preparing to build a plant in the northern Chüy Region, according to the Central Asian News Service. However, it is also considering constructing a plant in the southern Osh Region. As part of the meeting a memorandum of understanding and cooperation was signed between the National Investment Agency under the President of the Kyrgyz Republic and Knauf.

Ukraine: IF-GIPS has begun building its upcoming new 300,000t/yr plaster plant in Ukraine. IF-GIPS sells its gypsum products under the KRUMIX brand.

IF-GIPS says that it subsequently plans to build a new gypsum wallboard plant, also in Ukraine.