Gypsum industry news

Russia: According to Interfax, Bratskekogaz, which is controlled by Rosneft subsidiary Itera, has concluded a contract to supply Knauf Gips Baikal with compressed natural gas from the Bratskoye field in Irkutsk.

Bratskekogaz has signed agreements to supply compressed natural gas to Knauf Gips Baikal, which has a current demand of 25Mm³/yr. The implementation period is 2016 – 2017. It was reported previously that Knauf CIS was in talks with Itera to supply compressed natural gas to Knauf Gips Baikal to reduce production costs. Knauf Gips Baikal currently operates on liquefied gas delivered from Krasnoyarsk, Tyumen and Omsk, which is 260% more expensive than natural gas delivered by pipeline. This has made it difficult to compete with imported gypsum wallboard and dry construction mixes from China and South Korea.

Knauf will invest US$1.5m in the project to switch to compressed natural gas. The money will be used to build a gas acceptance facility and rebuild the burners and pipelines. The supplier is responsible for building the compressor station and supplying the compressed natural gas tankers for transportation.

Romania: According to News website ZF English, Siniat Romania, part of Belgium's Etex Group, has completed the construction of its Euro50m, greenfield wallboard plant in the southern city of Turceni.

Australia: The Gladstone Port Corporation has approved construction of a US$54m Knauf Plasterboard manufacturing plant at Bundaberg Port, Queensland to begin by the end of 2015. The project is anticipated to create up to 100 local jobs over the next 18 months, according to local media. The plant is due to be completed in January 2017.

US: According to local media, NB Power has paid J D Irving more than US$12.3m in penalties and contract renegotiation fees since 2009.

"The revelation that NB Power has a contract with J D Irving to provide gypsum from the oil-burning Coleson Cove plant until 2026 for Irving's wallboard plant and pay J D Irving when they can't deliver stunned many New Brunswickers," said David Coon, New Brunswick Green Party leader. "It reminds me of the contract this government currently has with J D Irving to supply an unsustainable volume of softwood from the Crown lands for years into the future or pay up if they can't deliver."

The 2005 contract commits NB Power's Coleson Cove generating station to provide a minimum amount of synthetic gypsum to Atlantic Wallboard every year until 2026. NB Power currently produces 20,000 - 30,000t/yr of gypsum. According to NB Power, the contract states that in the event of a production shortfall, NB Power must pay for the difference between the actual gypsum supplied and the minimum amount of gypsum agreed to in the contract. NB Power has paid US$5.33m in shortfall penalties since the 2009 - 2010 fiscal year. NB Power paid Atlantic Wallboard another US$5m in 2010 - 2011 so that it could reduce the annual cap that it is required to meet, thereby reducing the penalties it has to pay in the future.

Brent Staeben, director of marketing and communications for NB Power, said that the contract was again renegotiated recently, costing another US$2m. "The contract has evolved over time to reflect the fact that the production at Coleson is changing. We have been in constant talks and negotiations over the course of this contract with the buyer to ensure that it better reflects the production at the facility, said Staeben. NB Power has budgeted another US$829,000 for a penalty payment for 2015 - 2016.

Despite the fact that Coleson Cove is producing less gypsum than anticipated, Staeben sid that the contract still makes economic sense because the gypsum needs to be disposed of one way or another. "Originally we committed because we had some sense of how much we would be producing over time. We estimated that, at that time, when we looked into the future, we would need to landfill this," said Staeben. "The cost of landfilling would be significant, in the tens-of-millions of dollars. Even with the changing nature of production there, it's still a very, very good deal for New Brunswickers," he added.

"Without the synthetic gypsum from Coleson Cove, the project would not proceed as the economics to run a gypsum plant in Saint John, relying solely on natural gypsum rock, would not be viable," said Atlantic Wallboard's franchise application to the New Brunswick Energy and Utilities Board in 2006. The document also stated that, "Over time, however, synthetic gypsum from NB Power's generating stations will be supplemented by natural gypsum planned to be imported from out-of-province sources to produce wallboard products."

Egypt: Sales from Knauf's recently opened wallboard plant in Suez could reach US$15m in Egypt and Africa during the first year of production, according to Alexander Knauf, managing partner of the company. The company plans to sell 8Mm2 of gypsum wallboard during the first year of operation, Knauf said in a statement.

Russia: Turkey's Kastamonu Entegre plans to start construction of a gypsum wallboard plant in Kaluga, Russia. The plant will be located in the Lyudinovo Special Economic Zone (SEZ). Kastamonu Entegre signed an agreement with the regional authorities in 2014.

Egypt: The German-Arab Chamber of Industry and Commerce (GACIC) has announced the opening of a new US$50m Knauf Egypt plant. The plant has a capacity of 15Mm²/yr of gypsum wallboard, 90,000t/yr of other gypsum products and 25Mm/yr of metal cutters. Construction in the Ataqa Suez industrial zone began in 2010. Suez was selected as the plant site because of its strategic location between raw materials sites, local markets and major export markets.

Uzbekistan: Knauf has started a new US$52.5m investment project at two of its plants in Bukhara. The move follows the signing of a new agreement in 2014 by Knauf and Uzstroymateriali JSC to boost economic cooperation between Uzbekistan and Germany.

Knauf has already invested US$51m in Uzbekistan. It has two plants in Bukhara: JV JSC Bukharagips, which produces dry building mixes and Knauf Gips Bukhara, which produces gypsum wallboard. The 60,000t/yr capacity Bukharagips plant started operations in August 2009, while the 20Mm³/yr capacity Knauf Gips Bukhara plant was built in 2011.

US: Wallboard recycler USA Gypsum has opened its US$3m wallboard recycling plant and corporate headquarters in the West Cocalico Township, Pennsylvania. The company said that the new buildings and equipment will produce better quality products more efficiently and will help USA Gypsum to divert even more wallboard waste from landfills.

The recycling plant also includes renovated buildings for packaging, storage and offices. In the past 10 years, USA Gypsum has diverted more than 225,000t of wallboard from landfills, converting it to beneficial use by farmers in the form of gypsum fertiliser, soil conditioners and amendments and gypsum animal bedding. In spite of this growth, USA Gypsum has estimated that less than 10% of wallboard scraps generated in Pennsylvania are recycled. USA Gypsum ships its gypsum products across the US and Canada.

Oman: USG Zawawi Drywall SFZ 's US$37m state-of-the-art gypsum plant in Oman's Salalah Free Zone (SFZ) was inaugurated on 6 May 2015 marking the formal start of commercial production of a range of Sheetrock brand gypsum wallboard products earmarked primarily for export across the Middle East and Indian subcontinent. USG Zawawi Drywall SFZ is a 50:50 partnership between USG Corporation, Boral and Zawawi Minerals.

"We are pleased to see the opening of this successful US-Omani venture. Building relations between the US and Oman is a top priority of the US Embassy and this work is a shining example of the strategic coordination that benefits both our countries," said Ann Mason, economic-commercial officer from the US Embassy. "We applaud USG Boral and Zawawi Minerals for taking full advantage of the potential of Salalah Port and Free Zone and the US Oman Free Trade Agreement."

Commissioning of the Salalah plant, which has 8Mm²/yr of gypsum wallboard production capacity, began in March 2015. It was designed to enable future expansion to double wallboard production capacity or add new products like construction plaster. The plant will produce a wide range of Sheetrock gypsum boards, including products resistant to water, fire, sound, impact and mould. According to Curt Loring, general manager of USG Zawawi Drywall SFZ, it will produce products with special certifications not currently manufactured or available in the GCC. These products are specially engineered for custom wall systems in demand by architects for commercial construction.

The products will be marketed across the Gulf and Indian Subcontinent. Uptake is expected to be robust around the Gulf Cooperation Council (GCC), where a commercial construction boom is already underway. The raw gypsum is sourced entirely from a major gypsum quarry located in the Thamrait area of Dhofar Governorate. The quarry is operated by Zawawi Gypsum and is jointly-owned by USG-Boral and Zawawi Minerals.

"USG Zawawi Drywall's investment is in keeping with the Omani government's economic policies advocating the sustainable commercialisation of natural resources to diversify the economy, create employment for Omanis and facilitate inflows of investment and know-how. The Salalah facility operates to the same stringent safety and environmental standards applied by USG at its facilities in the US," said Alawi Al Zawawi, chairman of USG Zawawi Drywall SFZ.

Awadh Al Shanfari, CEO of Salalah Free Zone explained that the project is a re-enforcement of the Free Zone's commitment to maximise the Sultanate's mineral wealth through national and foreign partnership. "In the past, we have been focusing on projects that can create new industries linked to the available raw materials in the Sultanate. As a result of our endeavours, we will be announcing more investments during 2015," said Al Shanfari.