Gypsum industry news

US: Continental Building Products’ net sales in the second quarter of 2018 have risen due to higher gypsum wallboard sales volumes driven by ‘strong’ demand. The company reported an 11.6% increase year-on-year on wallboard volumes to 67Mm² from 60Mm². Its net sales rose by 6% to US$256m in the first half of 2018 from US$241m in the same period of 2017. Its net income rose by 44% to US$35.5m from US$24.6m.

US: USG has blamed falling operating profits on costs relating to its ‘Customer-First’ strategy and rising general costs, including those from transportation. Its operating profit fell by 32% year-on-year to US$121m in the first half of 2018 from US$179m in the same period in 2017. Its net sales rose by 6% to US$1.67bn from US$1.58bn.

For its wallboard and surfaces business the company said that its wallboard price increased by 2% from the second quarter of 2017 due mostly to a price increase in January 2018. Wallboard sales volumes increased by 2% compared to the second quarter of 2017. However, wallboard costs were US$12m higher than the previous year primarily due to rising input and transportation costs.

The building materials producer confirmed that its merger with Germany’s Knauf is expected to complete in early 2019, subject to shareholder and regulatory approval.

US: A team from Washington State University have developed bricks made from recycled gypsum wallboard. The blocks are made from 80% drywall waste and a binder made from industrial by-products. They are waterproof and lighter than earth blocks, bricks or concrete blocks. The researchers are partnering with local contractors to get the waste, and architecture students are using a press to build the blocks, which look like masonry bricks.

The researchers, including Taiji Miyasaka, professor in the School of Design and Construction, David Drake, adjunct faculty in the School of Design and Construction, and Robert Richards, a professor in the School of Mechanical and Materials Engineering, began developing the wallboard blocks in 2017 with a grant from the American Institute of Architects. They have also received an Amazon Catalyst grant to move the project from laboratory scale to a demonstration structure. In the next year, the researchers will be testing the blocks to meet building, seismic and fire codes. They also aim to build a 15m² demonstration structure.

A prototype structure featuring the wallboard-based bricks will be displayed as part of the ‘Make/Do: A History of Creative Reuse’ exhibition that is running at the Washington State History Museum until December 2018.

US/China: The Office of the US Trade Representative has proposed placing a 10% tariff on mineral products from China, including gypsum products. The list includes over 600 items and it will come into force after a period for public comment in August 2018.

Mineral products affected by the proposed tariffs of interest to the gypsum wallboard industry include gypsum, anhydrite and plaster products made from calcined gypsum or calcium sulphate. Lime, cements and additives for cements, mortars and concretes are also affected.

The inclusion of additional products to a tariff list follows an earlier decision by the US government to tax imports from China worth US$34bn that came into force in early July 2018.

Germany: Schenck Process has signed an agreement to buy Raymond Bartlett Snow from the Arvos Group. The acquisition is expected to close on 29 June 2018. No value for the deal has been disclosed.

Raymond Bartlett Snow designs and builds size reduction, classification and thermal processing equipment. It operates locations in the US, India and Brazil, all of which will become part of the Schenck Process Group.

US: National Gypsum will reopen its Wilmington, North Carollina wallboard plant which was idled in 2009. The company plans to spend US$25m on upgrading the site. The company also plans to build a rail spur into the plant to support despatch by railway. The site will use raw gypsum from the company’s quarry in Halifax, Nova Scotia in Canada.

"We expect to have the plant operational by the end of the year," said chief executive officer Tom Nelson. The company intends to use the plant to grow its specialty gypsum wallboard board product lines, which include mould and moisture-resistant features. Nelson thanked the Wilmington Business Development, New Hanover County Commission, and Wilmington City Council for assistance with the project so far. Thanks was also given to the North Carolina Railroad Company, the North Carolina Department of Transportation, and Duke Energy for their support.

US: The Gypsum Association has elected Charles R Harrison as the chair of its board of directors. Harrison is the Vice President Technology & Product Innovation of the Gypsum Division of Georgia-Pacific. Other appointments that have been elected include USG’s Albert R Zucco as the vice-chair of the board, CertainTeed Gypsum’s Peter Mayer as treasurer and the Gypsum Association's Stephen H Meima as the secretary. Continental Building Products’ Timothy Power is the past chair of the board. Officers were elected at the meeting of the Association’s board of directors in Jacksonville, Florida. All terms are for one year and are effective from 1 May 2018.

US: The board of directors of USG has authorised its management to commence negotiations with Germany’s Knauf regarding a potential sale of the company. USG has advised Knauf that it is prepared to agree to a customary confidentiality agreement to facilitate sharing appropriate due diligence information. The board added that it, “…remains committed to acting in the best interests of all shareholders and will evaluate all options to do so.”

Knauf made a US$5.9bn bid for USG in March 2018 that was rejected. It then urged shareholders to vote against director nominees at USG’s annual general meeting. Warren Buffett, the chief executive officer Berkshire Hathaway, subsequently agreed to back the opposition to the directors. Berkshire Hathaway holds a 31% stake in USG and Knauf holds a 10.5% stake.

US: USG has blamed falling sales for its wallboard business on prices rises and inclement weather. The net sales for its wallboard and surfaces business fell by 6% year-on-year to US$441m in the first quarter of 2018 from US$469m in the same period in 2017. Its operating profit fell by 38% to US$49m from US$79m. Overall the company’s sales rose by 2.5% to US$786m.

“Our wallboard volumes were impacted by the timing of our US wallboard price increase and the frequent storms that affected many regions of the country. However, we are encouraged to see shipping volumes increase over the last six weeks, as our Sheetrock brand and industry leading technology continue to be preferred by contractors,” said Jennifer Scanlon, president and chief executive officer of USG.

The company said that its wallboard price increased by 9% from the fourth quarter of 2017 and 1% from the first quarter of 2017, due to a price increase in January 2018. It added that wallboard costs were US$14m higher in the quarter year-on-year due to retained staff levels, incurred costs to start-up a lower-cost line and input cost inflation.

US: Knauf has complained about USG’s decision to block its request for the company’s current stocklist materials that would allow it to communciate with other USG shareholders. The German competitor to USG and minority shareholder said in a letter to the board of USG said, “Questioning Knauf’s ownership of USG stock and whether we have ‘proper purpose’ for requesting these materials are the tactics of an entrenched management trying to thwart our right to communicate with fellow stockholders in connection with the annual meeting.” Knauf also threatned legal action in Delware if USG failed to provide with the information it desired.

USG rejected a US$5.9bn bid by Knauf to take it over in late March 2018. Knauf subsequently sent a letter to USG’s shareholders asking them to vote against director nominations in protest against the rejection.