Gypsum industry news

Cambodia: Thai Gypsum Products, the Thai subsidiary of Saint-Gobain, has signed a joint-agreement with Cambodian company Camstar to expand its distribution networks in Cambodia. French multinational Schneider Electric also signed the agreement. The European companies hope to use Cambodian construction materials firm ISI Group, Camstar's parent company, to connect them to a nationwide distribution network of over 300 outlets and more than 100 contractors, according to local press.

Thai Gypsum Products, which manufactures gypsum used in wallboards for Saint-Gobain's Thai operations, said it saw a 'big opportunity' to expand its networks for gypsum delivery in Cambodia ahead of the upcoming Association of Southeast Asian Nations (ASEAN) economic community due at the end of the 2015.

"Thailand has been our strong establishment as well as a centre of goods distribution to neighbouring countries," said managing director Richard Juggery. "Now we see a good potential of Cambodia as the country has attracted more foreign investors and performed outstanding business growth in past few years," he added.

France: Saint-Gobain aims to improve underlying operating profit in 2015 and save a further Euro400m. Saint-Gobain saw its 2014 operating profit rise by 1.6% to Euro2.8bn. On a like-for-like basis, the increase came to 7%.

"The group should benefit from good momentum in the US as well as in Asia and emerging countries in 2015," said Saint-Gobain in a statement. "In Western Europe, recovery will be held back by France."

Saint-Gobain derives about 66% of its sales from Europe and 25% from its home market in France. Total sales reached Euro41.1bn in 2014, down by 1.7%. Savings in 2014 reached Euro450m, as predicted in October 2014 when Saint-Gobain said that it aimed to do better than the Euro350m cost savings it had previously targeted for 2015. Saint-Gobain's net income, excluding depreciations and one-off charges, came to Euro1.1bn in 2014.

Switzerland: Resistance to Saint-Gobain's offer to buy Swiss-based Sika has strengthened as a new group of minority shareholders said that they oppose the deal. Walter Gruebler, a former chairman of Sika's board, as well as other former board members, have said that they are backing the company's management in opposing the Saint-Gobain takeover attempt, Sika said in a statement. The stake held by those former board members represents 1% of Sika's equity.

"This transaction endangers the culture of a great Swiss family company that has been able to evolve over the decades and destroys value for Sika shareholders," said the minority shareholders. "Resistance, represented by the board and the management, is justified."

Sika's management and its board are fiercely fighting an agreement sealed between the Burkard family, which controls Sika and Saint-Gobain in December 2014. The family accepted an offer of Euro2.57bn for its holding company Schenker-Winkler Holding AG, one of Europe's biggest building-materials groups by revenue. The holding company currently holds 52.4% of the voting rights in Sika, but only 16.1% of the shares.

The sale would give Saint-Gobain control without having to make an offer for the remaining 83.9% owned by shareholders. The deal is unfair for minority shareholders, the management has said. Sika has said that shareholders representing more than 35% of its total capital have given their assurance that they support the board of directors in its efforts to fend off the takeover.

India: Saint-Gobain, which is celebrating its 350th anniversary, has its sights set firmly on the future and, in particular, in India. It entered India in 1996 and now has 20 manufacturing plants and about 4900 employees there.

Saint-Gobain's two ambitions for its businesses in India are to shape the future of and to become the reference for sustainable habitat and to more than double its business in India and to exceed sales of US$1.61bn by 2019.

"India has been an important market and investment destination for Saint-Gobain and, going forward, will be even more so," said Anand Mahajan, Saint-Gobain's general delegate for India, Sri Lanka and Bangladesh.

UK: Saint-Gobain's British Gypsum is making it easier for specifiers and architects to identify environmental performance with the launch of seven new Environmental Product Declarations (EPD) that cover nine products.

As part of its aim to give environmental transparency and make it easier for specifiers to gather evidence for building certification schemes, such as BREEAM, LEED and SKA, British Gypsum has introduced additional EPD to its Thistle plaster range. These include declarations for Thistle BoardFinish, MultiFinish, BondingCoat, Browning, Universal OneCoat, DuraFinish, SprayFinish, ToughCoat and HardWall.

The EPDs were externally verified for the Thistle plaster products following a robust Life Cycle Assessment (LCA), which calculated the environmental impact of each product throughout its lifecycle. The LCA considers a range of factors, including the effect of raw materials, manufacturing process, installation, performance in use and recycling capabilities.

"As our EPDs are based on clearly-defined EU-wide rules and regulations, our customers can be confident in the knowledge that they are receiving reliable indicators, allowing them to make an informed decision when planning or delivering a project," said Heidi Barnard, sustainability leader at British Gypsum. "We're currently the only UK plaster manufacturer to offer EPDs, but we recognise the importance of giving our customers greater transparency, especially in our industry, where sustainable practices are becoming more rigorous on an almost daily basis."

Hungary: Saint-Gobain's revenue in Hungary rose by 6.2% to Euro35.2m in 2014 from Euro33.1m in 2013. In 2015, it expects revenue growth to be about the same. The business employs 500 people and exports more than 25% of its production. Saint-Gobain's biggest investment in Hungary is a Euro32.2m wallboard plant.

Switzerland: Sika has claimed that its controlling family no longer has the right to call an extraordinary general meeting (EGM), marking the latest twist in a Euro2.76bn takeover battle for the company by France's Saint-Gobain. The sale has been opposed by Sika's board and executives, forcing the family to call an EGM where it aims to remove executives who object to it.

Sika insists that the Burkard family, who are descendants of the company's founder, are no longer exempt from a rule that restricts shareholders' to hold no more than 5% of all registered shares. An exception was originally made because of the family's close association with the company and its assertion that it would protect it against takeovers. The company said that the voting rights of the family should be restricted to 5%.

Saint-Gobain announced plans in December 2014 to acquire the holding company Schenker-Winkler Holding AG (SWH), which is the vehicle controlled by the Burkard family. It holds 16.1% of Sika's capital and 52.4% of its voting rights. Saint-Gobain is targeting the Sika stake in an attempt to kick-start its own earnings growth.

"Now that the Burkard family / SWH have formed a group with Saint-Gobain, this historical privilege must be considered lost, together with the right to convene extraordinary general meetings," said Sika. Sika said shareholders representing more than 35% of its total capital have given their assurance that they support the board of directors in its efforts to fend off the takeover.

France/Switzerland: Saint-Gobain plans to acquire a controlling stake in Sika, a construction chemicals producer. The transaction involves Saint-Gobain's purchase of Schenker Winkler Holding AG, which owns 16.1% of Sika's capital and 52.4% of voting shares, for Euro2.3bn.

After the acquisition, Saint-Gobain will be able to fully-consolidate Sika into its operations, which will have a positive impact on net income in the year after consolidation. Saint-Gobain Group does not intend to make an offer for the remaining shares of Sika.

Sika has 16,000 employees in 84 countries. Its total sales in 2013 amounted to Euro4.3bn. It has experienced an average of 8%/yr growth in 2007-2013. Given the similarity in the activities of Sika and Saint-Gobain, it is expected that the acquisition will generate Euro100m in synergies from the second year of consolidation (2017) and Euro180m by 2019.

The deal requires the permission of the competent antitrust authorities and is expected to be completed no later than the second half of 2015.

Indonesia: Saint-Gobain has inaugurated its first wallboard plant in Indonesia, near Jakarta. With a production capacity of 30Mm², the new plant will enable Saint-Gobain to respond better to local demand and continue the group's growth on the rapidly-growing Indonesian wallboard market. Saint-Gobain has four other plants in south-east Asia, in Malaysia, Thailand and Vietnam.

Indonesia: PT Saint-Gobain Construction Products Indonesia (SGCPI), a subsidiary of Saint-Gobain Group, has invested approximately US$45m in the construction of a gypsum wallboard plant within the Cikande industrial estate in Serang, Banten. The 33Mm²/yr capacity plant, which is located on a 60,000m² plot of land, will be officially opened on 28 October 2014 after 18 months of construction.

According to Edward Loy, SGCPI's managing director for Indonesia, Malaysia and Singapore, production will start in November 2014 and the plant is expected to operate at full capacity by the end of 2015. Loy said that the plant was a first for the firm's industrial mortars division in Indonesia, hinting that there would be more investments to come from its glass and abrasives production in the near future.

"We want to position ourselves as strategic investors in Indonesia and we have more investments coming through in the next few years as well," said Loy.

With the opening of the plant, Loy suggested that the company would become more efficient in terms of pricing. "The opening of the plant will allow us to position ourselves as a local player in the market, so even though we started in 2007 with imports, it wasn't competitive. Now we'll have no more freight charges or shipping and handling," said Loy. In spite of his optimism, the regional managing director acknowledged that his firm would need to face the challenge of competing against cheaper, readily available yet unsustainable construction materials like asbestos and sand bricks.

"We can't compete with clay and sand bricks when the labour is still very cheap, but we can make sure the price difference is small and they are not offering the same kind of quality that we are," said Loy. "We'll deliver quality and performance to the homeowner." According to him, three factors will be decisive in driving the adoption of SGCPI's Gyproc brand of gypsum boards in the country; rising labour costs, knowledgeable consumers and the shift toward using green and sustainable construction materials.

Loy said that around 40-45% of the firm's business would be in the residential sector, while the rest of his clients would come from the commercial and public sectors, catering to spaces such as shopping malls, airports and hospitals.