Gypsum industry news

US: International Paper Company (IP) has announced that it has completed its acquisition of Temple-Inland Inc. through the merger of its wholly-owned subsidiary Metal Acquisition Inc with Temple-Inland. Temple-Inland, which has four US wallboard plants, is now a wholly-owned subsidiary of International Paper.

Under the terms of the transaction, each issued and outstanding share of Temple-Inland common stock has been converted into the right to receive US$32 in cash without interest thereon, less any applicable withholding taxes. Including the assumption of approximately US$700m in Temple-Inland net debt, the total transaction value is approximately US$4.5bn. As a result of the acquisition, Temple-Inland's common stock ceased trading on the New York Stock Exchange on 13 February 2012.

International Paper Chairman and CEO John Faraci said, "We are very pleased to have completed this compelling transaction. The combination of International Paper and Temple-Inland strengthens our North American packaging business and enhances our ability to generate cash flow while maintaining our strong balance sheet. We look forward to working with the employees of Temple-Inland as we successfully integrate our businesses and create an even stronger company with substantial benefits for our customers, employees and shareholders."

US: Eagle Materials has reported a revenue of US$124m for the third quarter of its 2012 fiscal year which ended on 31 December 2011. This represents a 19% rise compared to the same period of the fiscal 2011 year. However, earnings before interest and taxes (EBIT) fell to US$ 6.89m, a fall of 40% from the same period in 2011.

In its third quarter report Eagle Materials singled out its low-cost operations for performing well during the challenging environment for US construction activity. Gross profit was reported as US$12m, a rise of 59% compared to the same period in 2011. Segment operating earnings increased by 30% reflecting improved sales volumes in the company's wallboard, paperboard and cement businesses and higher wallboard and paperboard net sales prices as compared to the prior year.

For its Gypsum Wallboard and Paperboard sectors Eagle Materials reported third quarter operating earnings of US$5.4m compared to an operating loss of US$0.4m in the same quarter of 2011. Gypsum Wallboard and Paperboard revenues for the third quarter reached US$73.5m, a 24% increase from the same quarter of the 2011 fiscal year. Higher wallboard and paperboard net sales prices combined with improved paperboard sales volumes were the primary drivers of the quarterly earnings and revenues increase.

US: CertainTeed Corp has reduced energy consumption by 15% and water usage by 24% over the past four years, according to a release. In addition, it has decreased the amount of waste going to landfills from its facilities by 33%.

"Our world-class team of employees at CertainTeed play a pivotal role in increasing the sustainability of our operations," said Chris Altmansberger, vice president of operations support and process sustainability at CertainTeed. "Through our collective efforts, we have established a strong culture of respect for the environment that will continue to help preserve and protect the communities in which we live and work."

During 2010 and 2011 approximately 6000 CertainTeed employees received various types of sustainability training, which has helped drive energy, water and waste reductions. Additionally, more than 30 plants have achieved ISO 14001 certification.

"Our increased emphasis on sustainability has helped us identify and implement critical initiatives that reduce water and energy use as well as divert waste from landfills," said Altmansberger. "We have learned that even simple modifications can have a big impact."

US: November 2011 saw more home starts in the US than any month since April 2010. The surge was reportedly led by an increase in multifamily units. The gypsum industry will be watching to see if the trend continues for December 2011, which might finally signify an upturn in demand for wallboard.

Starts increased by 9.3% to a 685,000 annual rate. Building permits, a sign for future construction, also climbed to a year-high. As well as multifamily homes, typified by apartments, demand for single-family-homes may also be increasing. A drop in house prices and low borrowing costs is thought to be the reason for the increase in demand.

"For months we've been flagging the strength in multifamily construction, but now we're starting to get signs that single-family is pulling itself off the canvas," said Brian Jones from Société Générale in New York.

North America: CertainTeed Gypsum, a Saint-Gobain subsidiary, has announced that UL Environment Inc. has completed its independent Environmental Claims Verification (ECV) process for products manufactured at five of its sites in North America. The company says that the move demonstrates a strong commitment to environmental responsibility and transparency.

UL Environment's ECV process has been completed for products manufactured at CertainTeed's Cody (Wyoming, US), Vancouver (British Columbia, Canada), Toronto (Ontario, Canada), Seattle (Washington, US), and Moundsville (West Virginia, US) manufacturing facilities. Specifically, UL Environment confirmed the pre- and post-consumer recycled content, origination of source materials (and adherence to ASTM D 3273 mould-resistance standards, if applicable) for 19 CertainTeed products. The validation process is currently underway for products manufactured at the company's remaining North American plants.

"CertainTeed has taken a unique approach by seeking validation for environmental product claims based on the specific plant in which they are manufactured," said Steve Wenc, president of UL Environment. "This demonstrates CertainTeed's commitment to providing detailed product information and an unprecedented level of transparency."

"Third party verification of environmental claims is a critical component of today's green building culture, as it provides independent evaluation and enhanced transparency," said John Donaldson, president of CertainTeed Gypsum. "CertainTeed has made significant strides in ensuring that building and design professionals have access to sustainable, high-performance gypsum products that help them to achieve their goals in the responsible development of our built environment."

US: Gypsum consumption in the US has declined steeply in the past five years according to data released from the US Geological Survey, falling by over 50% from 41.6Mt in 2006 to just 19.4Mt in 2010. However, following an announcement that housing starts will increase by 15% in 2012 from the National Association of Home Builders (NAHB), gypsum demand is expected to finally rise.

The increase in housing starts and associated increase in gypsum wallboard demand is forecast to cause an increase in gypsum wallboard prices, with National Gypsum Properties, a North Carolina-based provider of wallboard and related products, announcing plans to raise its prices by 35% from 1 January 2012. Other suppliers and manufacturers may follow suit.

Craig Weisbruch, National Gypsum's senior vice president of sales and marketing, said that manufacturers expect to sell about 17bn ft² of wallboard in 2011, down from 38bn ft² in 2006. "We're changing the nature of the game here," he said. "I don't know if it will work or not, but we're all losing money. The amount of product we're shipping is so little we just can't cover our costs."

US: National Gypsum has announced that an Alabama lawsuit against the company has been dismissed. The suit claimed that National Gypsum wallboard exhibited the same characteristics as allegedly defective Chinese wallboard.

Marshall County, Alabama Circuit Court Judge Tim Jolley entered an order dismissing the case, Clark vs. National Gypsum, et. al. 'with prejudice', meaning that the plaintiffs are barred from bringing the same claim against the company again.

"This result is yet another confirmation of the quality and safety of our products and another blow to those making baseless claims against our company," said Craig Weisbruch, senior vice president of sales and marketing. "All National Gypsum wallboard has passed the industry's most rigorous testing and certification processes for indoor air quality and has been used by the US Green Building Council in its buildings."

The dismissal of the Alabama lawsuit follows a similar case in April 2011. A federal judge in Arizona dismissed a putative national class action against National Gypsum that had alleged that the company manufactured defective wallboard which emitted high levels of sulphur, damaged property inside homes and caused health symptoms. These problems have typically been associated with allegedly defective Chinese wallboard, not domestic wallboard. The plaintiff did not produce any credible scientific evidence that could substantiate his allegations.

"All credible scientific evidence - including studies by the federal government's leading safety experts - has led to the same conclusion," said Weisbruch. "National Gypsum wallboard does not pose the issues associated with allegedly defective Chinese drywall."

US: Eagle Materials Inc. has reported its fiscal results for the second quarter (ending 30 September 2011) of the 2012 financial year. These show total revenues of USD134.8m and net earnings of USD6m. Revenues increased by 2% from the same period of the prior fiscal year, reflecting improved sales volumes across most of its business lines. Operating earnings were down by 6% due primarily to higher raw material costs in its gypsum wallboard segment.

Eagle Materials' Gypsum Wallboard and Paperboard division's second quarter operating earnings of USD1.5m were down by 71% compared to the same quarter of the 2011 fiscal year. The Gypsum Wallboard and Paperboard sector's revenues for the second fiscal quarter totalled USD72.3m, a 2% increase from the same quarter a year ago. The revenue increase reflects higher wallboard sales volumes and higher paperboard sales prices, offset by lower gypsum wallboard average net sales prices. The average gypsum wallboard net sales price for the quarter was USD92.09/MSF, 4% less than the same quarter of the 2011 fiscal year. The gypsum wallboard sales volume for the quarter of 403MMSF represents a 2% increase.

US: USG has reported a deepening net loss of USD115m for the quarter ending 30 September 2011, compared to a loss of USD100m for the same period in 2010. Revenue rose 4.4% to USD792m, from USD758m in 2010.

A weak economy has been blamed for low levels of demand for the company's products. "Many of our key markets continue to experience recessionary levels of demand that are near record lows," said President and CEO James S. Metcalf.

USG's operating loss for gypsum in North America expanded to USD70m, from USD43m in 2010. It also had a USD17m operating loss for building products, compared to a USD24m loss in 2010. Its Worldwide Ceilings unit had a USD25m operating profit.

US: USG has taken ownership of about 180 acres in northwest Citrus County, Florida, to warehouse synthetic gypsum from the nearby Progress Energy power plant. Company spokesman Mark Joseph said that USG plans to store the gypsum until it is transported to company plants in North America.

USG received a trustee's deed on 14 September 2011 from the City National Bank of Florida, which owns about 400 acres near Power Line Road. According to the deed USG is the sole beneficiary of the trust.

Joseph said that the company's plans do not go further than storage of the material in warehouses at present. He added that the company has no plans at this time to manufacture drywall at the Citrus County site. "We took possession of the land to make it a storage facility," he said.

Joseph finished by saying that economic conditions require nothing more now than someplace to store and ship the material. However, he wouldn't rule out expansion, "We don't know what the future will bring... The Florida market is not the best right now for housing."