Gypsum industry news

Philippines: The Department of Trade and Industry (DTI) has placed imports of gypsum wallboard from Thailand under a provisional anti-dumping duty. The Philippines Daily Enquirer newspaper has reported that the duty takes the form of a cash bond and will remain in force until March 2025.

The DTI said there is ‘reasonable cause’ to believe that imported gypsum wallboard from Thailand is being dumped, meaning that it caused ‘material injury’ to domestic producers.

The local gypsum wallboard industry’s share of the domestic market reportedly dropped from 66% in 2022 to 58% in 2023.

US: US gypsum wallboard sales grew by 1% year-on-year to 628Mm² during the first quarter of 2024. The country imported 20.1Mm² of gypsum wallboard, down by 13% year-on-year. Mexico supplied 19.3Mm² (96%) and Canada 800,000m² (4%) of imports. Meanwhile, the US exported 19.1Mm² of gypsum wallboard during the quarter, 18Mm² (94%) of it to Canada.

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.

New Zealand: Fletcher Building has managed to grow its earnings for its Building Products division in its 2023 financial year despite a weakened residential market in the second half of the year, poor weather and rising input costs. It noted that “substantial cost increases were absorbed on gypsum, paper, resin and freight, partially offset by lower utility costs from the drop in electricity prices.” It combated this through cost management and ‘pricing discipline.’ Revenue from the group’s Building Products division fell slightly to US$863m in the financial year to 30 June 2023 from US$873m in the same period in 2022. However, earnings before interest and taxation (EBIT) rose by 4% year-on-year to US$120m from US$115m.

Ross Taylor, the chief executive officer of Fletcher Building, said “Our US$240m investment in Winstone Wallboards GIB plasterboard manufacturing and distribution facility in Tauranga has now commenced production and will be fully operational by the end of October 2023. The new plant’s state-of-the-art technology delivers more production capacity allowing for product innovation and future growth.”

Overall the group’s revenue dropped slightly to US$5.07bn from US$5.08bn and EBIT dropped by 29% to US$298m from US$420m. The large drop in earnings was mainly attributed to additional costs allocated to the New Zealand International Convention Centre and Hobson Street Hotel project. Adjusted for significant items the group’s EBIT rose by 6% to US$477m from US$452m.

China: China National Building Material (CNBM) expects its profit to decline by 50% year-on-year in the first nine months of 2022. The group said that this will be due in part to reduced gypsum wallboard sales and a 'substantial' decline in the value of its financial assets.

US: Gypsum wallboard companies sold 629Mm² of gypsum wallboard in the first quarter of 2022, in line with first-quarter 2021 sales, according to US Geological Survey (USGS) figures. They exported 16.9Mm², up by 6% year-on-year from first-quarter 2021 volumes. Canada received 15Mm², 94% of exports. The US Census Bureau recorded gypsum wallboard imports of 22.2Mm², up by 28% year-on-year. Mexico supplied 19.1Mm² (86%), while Canada supplied 2.89Mm² (13%).

In the first quarter of 2022, national natural gypsum production was 5.33Mt, up by 2.1% year-on-year from 5.22Mt in the first quarter of 2021.

US: The US Geological Survey (USGS) reports that 17Mt of gypsum was mined in the first three quarters of 2021, a rise of 9% year-on-year from 15.6Mt in the same period in 2020. Imports grew by 14% to 5Mt but synthetic gypsum supply declined by 10% to 9.75Mt. Total gypsum board product sales grew by 8% to 1.94Bnm2 from 1.80Bnm2.

US: Saint-Gobain has agreed to buy construction chemicals producer GCP Applied Technologies. Reuters News has reported that the move continues Saint-Gobain’s industrial diversification, as it also seeks to maximise its growth opportunities from the US’s on-going infrastructure overhaul. Saint-Gobain expects to conclude the deal by 2023 and will finance the acquisition through cash on its balance sheet.

Chief executive officer Benoit Bazin said “After the successful acquisition of Chryso, GCP is the logical next step to expand Saint-Gobain's presence in admixtures and additives, which provide key solutions to de-carbonise the construction industry.” He added “This acquisition is a decisive step in establishing Saint-Gobain's leading position worldwide in construction chemicals, with total sales of more than US$4.51bn [combined], up from US$3.39bn.”

US: Mineral Technologies has estimated that its total full-year gypsum and lime products sales will rise by 6% year-on-year in 2021 to US$330m from US$310m in 2020. It attributed the anticipated rise to a reordering of its operations away from restrictive Covid-19 containment measures and the return of demand growth to its markets. Business Research Company Reports has reported that the global lime and gypsum products market was worth US$55.2bn in 2020, of which Mineral Technologies held a 0.6% share.

Australia: Knauf is reportedly looking for buyers for its business in Australia. The Royal Bank of Canada and PricewaterhouseCoopers have been helping the gypsum wallboard producer manage a potential sale, according to the Australian newspaper. The German company operates three wallboard plants in the country. They are thought to be worth up to US$200m.

Any such sale is likely to be related to Knauf’s acquisition of USG in 2019. The US-based company owns a 50% share in USG-Boral, which also operates wallboard plants in Australia. Boral said in April 2020 that it thought it unlikely that the Australian Competition and Consumer Commission (ACCC) would approve its plans for USG-Boral so far. If Knauf were able to sell its other assets in Australia then its options with USG-Boral are more likely to be accepted. Speculation has mounted in the local press about partial or full asset divestments by Knauf in Australia since the USG acquisition.