Gypsum industry news

Brazil/Egypt: France-based Saint-Gobain has acquired Matchem in Brazil and started exclusive negotiations to acquire IDP Chemicals in Egypt via its Chryso subsidiary. Both transactions are intended to strengthen the company’s presence in the construction chemicals market with a focus on concrete admixtures. Matchem and IDP Chemicals will be consolidated within the Construction Chemicals segment in Saint-Gobain’s High Performance Solutions division.

Matchem, established in 2011, employs around 50 people across two plants in Brazil and reported revenue of around Euro20m in 2022. Saint-Gobain also operates mortar company Quartzolit, sealant and adhesive company TekBond and GCP Applied Technologies in Brazil.

IDP Chemicals has been licensed by Chryso since 2018 and employs 25 people at one plant. This acquisition is expected to be finalised in the first quarter of 2023.

Two news stories to note over the last two months indicate growth in the gypsum wallboard market in Romania. Firstly, Knauf announced plans in mid-October 2022 to build a new 30Mm²/yr gypsum wallboard plant at Huedin in Cluj County. Then, Germany-based Grenzebach’s local subsidiary revealed that it had broken ground on the construction of an upgrade to its Iasi production centre.

Knauf’s announcement follows work by the existing wallboard producers with plants in the country to increase their own local capacity. Saint-Gobain started building a new production line at its Turda plant in mid-2021 at a cost of Euro45m. It hopes to have the project completed by April 2023. Etex started work in mid-2022 on a Euro6m sludge drying unit at a coal-fired power plant in Oltenia that will supply synthetic gypsum for use at its Turceni plant. It is also working on logistics upgrades to Turceni and a separate plaster plant at Aghiresu.

Graph 1: Growth rate of the construction market in relation to market volume in selected emerging countries, 2020 – 2030. Source: Saint-Gobain financial report using data from IHS.

An indication of Saint-Gobain’s interest in the Romanian market can be seen in its universal registration document for 2021 where it outlined its strategy. It presented a graph of forecast growth rates in construction markets in selected developing markets between 2020 and 2030. The countries that are underlined in Graph 1 (above) are those where Saint-Gobain made large acquisitions or investments in 2021. Romania is interesting on this graph because it is the European country with the largest predicted growth rate. It also has a relatively low market volume suggesting potential for market growth, although note that the graph only shows selected countries.

Another reason why Knauf might be interested in Romania is that it is the largest country in the European Union in which the company does not have a wallboard plant. Knauf’s own take from its press release about why it decided to build a plant in Romania was that local per capita consumption of gypsum wallboard was around 3m²/yr compared to at least 6m²/yr in more mature markets elsewhere in Europe.

Etex’s subsidiary Siniat Romania reported a 20% year-on-year rise in turnover to Euro60m in 2021. This compares to a 24% rise in turnover to Euro307m by Saint-Gobain Romania. Andrei Popa, Etex’s Country Sales Manager Romania & SEE, told Agenda Constructiilor that Siniat Romania’s turnover grew by 25% year-on-year in the first eight months of 2022. However, it is unclear what difference Etex Group’s acquisition of insulation producer URSA in June 2022 made to the figures in Romania. Popa also revealed that the rise in turnover so far in 2022 was mainly down to price rises. This in turn had been promoted by mounting energy costs, particularly gas. The company described itself as a ‘big consumer of gas’ and reported that the price had risen seven times over the past year. One more point of interest to mention is that Popa described Etex as one of the largest exporters in the country, with 40% of local production sent over national borders. This also aligns with what Knauf said about its new plant. It intends to deliver half of the production from its proposed plant at Huedin to Hungary, Serbia and the Republic of Moldova. The other half will serve the domestic market in the north of Romania with imports from Bulgaria expected to continue to supply the south of the country.

The data above suggests why Saint-Gobain, Etex and Knauf have all invested in wallboard production units in Romania over the last two years. The local market has growth potential and the companies are also focused on exports to neighbouring countries. All this investment may also have contributed to Grenzebach’s decision to enlarge its production site at Iasi too. The ‘fly in the ointment’ here in the short term is the disruption to energy markets caused by the war in Ukraine. Siniat Romania mentioned its concern over gas prices above. Saint-Gobain also made similar comments on a general basis for Europe in its nine month financial results in late October 2022. It said that it was preparing continuity plans for its gas-consuming plants in Europe but added that its gypsum wallboard production lines were ‘extremely flexible.’ However, Romania is better prepared for problems with gas supplies compared to elsewhere in Europe because it produces around 90% of its requirements locally. Despite energy concerns at the moment, the long term potential for the wallboard market in Romania remains promising.

India: Saint-Gobain India is planning to invest around US$215m towards capacity expansion plans in 2023. The building materials producer said in an interview with the Financial Express newspaper that it is part of a wider scheme to spend up to US$970m between 2022 and 2025. It aims to increase its annual revenue to US$3.7bn by 2030. The expenditure is separate from any plans for mergers and acquisitions. The company is expanding all its businesses in the country, including gypsum wallboard, glass, construction chemicals and ceramics.

Spain: France-based Saint-Gobain has signed a power purchase agreement (PPA) with Endesa. The 11-year agreement will start in 2024 and will cover around 55% of Saint-Gobain’s local electricity requirements. Endesa will supply 150GWh/yr of renewable energy. This agreement will enable a reduction in CO₂ emissions of roughly 39,000t/yr. This is the second renewable energy supply agreement signed by Saint-Gobain in Spain. Together, the two agreements will cover 65% of the group’s electricity needs in Spain.

France: A public enquiry into Saint-Gobain subsidiary Placoplatre's plans to establish a gypsum quarry at Fort Vaujours, Seine-Saint-Denis, opened earlier in November 2022. The producer plans to use the new site to serve its Vaujours gypsum wallboard plant as a replacement for its Bernouille quarry after the latter closes in 2026. The 65Mm²/yr facility consumes 900,000t/yr of natural gypsum.

Eco group Environnement 93 has protested the anticipated enviromental impacts of opening a quarry of sufficient size to reach the gypsum deposit 25m below ground. Placoplatre's proposal consists of a three-stage approach in which it demolishes buildings, clears any hazardous residues from the site's military and nuclear power testing history and only then commences extraction. The company plans to restore part of the site after mining is completed. The enquiry will run until 23 December 2022.

France: Saint-Gobain’s sales grew by 14.5% on a like-for-like basis to Euro38.4bn in the first nine months of 2022 compared to Euro32.9bn in the same period in 2021. Strong sales growth was reported in all business lines although sales were driven in particular by the group’s High Performance Solutions business and its Asia-Pacific and North America regions.

The group noted that raw materials, freight and energy costs were growing, especially in Europe. It said that it had hedged around 80% of its natural gas and electricity purchasing needs for 2022 and around 60% for 2023. It has also been preparing continuity plans for its gas-consuming plants in Europe to ensure the flexibility of production to operate with less or alternative energy. The group said that its gypsum wallboard and construction chemicals production lines were “extremely flexible.”

By region the group said it had started the world’s first zero-carbon wallboard production at its Balsta plant in Sweden powered by biogas and ‘green’ electricity. In France it produced and marketed its Placo Infini 13 product, which is said is the first wallboard made from over 50% recycled gypsum.

UK: British Gypsum has started converting its heavy-good vehicle fleet fuel source to the biofuel Hydrotreated Vegetable Oil (HVO) from diesel. The subsidiary of France-based Saint-Gobain expects to use 75,000l/week of HVO. This means that around 40% of its UK fleet will now operate on HVO fuel, with a further 10% using Liquefied Natural Gas (LNG). The use of multi-fuelled vehicles at this scale is expected to reduce its carbon emissions by approximately 70% year-on-year.

To support the implementation of HVO vehicles, the company has made several upgrades to site infrastructure that include a HVO refuelling point at its Robertsbridge plant and a new fuel island capable of delivering 110,000l/week at its distribution centre in Gotham.

Canada: CertainTeed Canada has welcomed the Canadian International Trade Tribunal's ruling in favour of six provinces and territories' anti-dumping measures on imports of gypsum wallboard. The tribunal found that imports of gypsum wallboard from the US threatened material injury to the domestic industries of Alberta, British Columbia, Manitoba, Northwest Territories, Saskatchewan and Yukon.

CertainTeed Canada chief executive officer Julie Bonamy said "CertainTeed Canada is committed to free and fair trade; we have helped shape the Canadian building products industry for more than 80 years." Bonamy concluded "We are committed to supporting our customers and employees through our facilities in Vancouver, Calgary and Winnipeg."

North America: France-based Saint-Gobain has appointed Steve Williams president of its newly created construction chemicals North Americas unit. The unit combines GCP Applied Technology's speciality construction chemicals business and Chryso. Saint-Gobain acquired both GCP Applied Technology and Chryso in 2021.

Steve Williams previously worked as Chryso's North America president from 2019. Prior to this he was cement producer Titan America's sales and marketing director between 2012 and 2015. Williams holds a bachelor of science degree from Brigham Young University and a master’s in business administration (MBA) from the University of Florida.

UK: The European Space Agency, University of Glasgow and others are using France-based Saint-Gobain's Bantycock, Nottinghamshire, quarry to test new drill bit designs for their Drill for Extensive Exploration of Planetary Environments Using Robots (DEEPER) project. The project aims to develop tens-of-metres-long spoolable drill 'strings' to help in the search for water on Mars. Researchers will use their prototypes to drill directly into the mine's gypsum deposits. Saint-Gobain said that the hydrated mineral gypsum provides a similar geological profile to that of Mars.

Gypsum wallboard production by Saint-Gobain subsidiary British Gypsum at its nearby Barrow upon Soar, Leicestershire, and East Leake, Nottinghamshire, gypsum wallboard plants relies on Bantycock gypsum.