Gypsum industry news

USA: USG has announced that its chairman, William C Foote, will retire from the company on 1 December 2011. The USG board of directors has elected James S Metcalf, USG's President and Chief Executive Officer, to the additional post of Chairman of the Board effective upon Foote's retirement.

"It has been an honour and a privilege to lead this great company for the last 15 years," said Foote. "I have great confidence in the company's leadership team and its future. I will sincerely miss the many friendships I have developed throughout the company and the industry over the years. I will always be grateful to our board of directors for their steadfast support and wise counsel."

Foote has served as USG's chairman since 1996, after having been elected chief executive officer in 1995 and president in 1994. Foote has nearly 27 years of service, having joined USG in 1984. The youngest chairman in USG's 109-year history, Foote successfully led the company through periods of rapid growth, severe economic contraction and a Chapter 11 bankruptcy related to legacy legal liabilities.

Under Foote's leadership, USG launched a large-scale modernisation of its manufacturing operations in the late 1990s that added more than 1.5Bnm² of low-cost wallboard manufacturing capacity. Foote also directed the expansion of USG's specialty distribution business, L&W Supply Corporation, which now has more than 150 locations and is the only specialty dealer of building materials with a nationwide presence.

He also helmed the firm through the company's legacy asbestos liabilities and led the company through a Chapter 11 restructuring to protect shareholders from a wave of lawsuits. In a Wall Street Journal article at the time USG emerged from bankruptcy, Warren Buffet called it, "the most successful managerial performance in bankruptcy that I've ever seen." Buffett's investment company, Berkshire Hathaway Inc., owns a 16.2% in USG.

Metcalf, who joined the company in 1980 as a trainee, was elected to the USG Board of Directors in 2008 and became chief executive officer on 1 January 2011. Foote remains chairman of the board of the Federal Reserve Bank of Chicago.

US: United States Gypsum Corporation subsidiary L&W Supply has announced the closure of eight of its stores, citing a continued weak US housing market. It also announced that it was to wrap up its Nevada-based custom door and frames business by the end of the current quarter. The closure is expected to cost the unit somewhere in the region of USD13-15m in total.

US: USG Corporation (USG) has reported second quarter 2011 net sales of USD761m, an operating loss of USD21m and a net loss of USD70m. For comparison in the second quarter of 2010, the corporation's operating loss was USD25m and its net loss was USD74m.

US Gypsum wallboard shipments totaled 986MMSF, down on the second quarter of 2010, which saw 1070MMSF shipped. The average selling price was also down, from USD114.17/MSF on average to USD111.55/MSF.

"We are continuing to pursue our near-term and long-term strategic priorities during the protracted recession in our domestic markets," said James Metcalf, President and CEO of USG. "By strengthening our core businesses, diversifying the sources of our earnings and aggressively leveraging our innovation leadership to differentiate USG's products from the competition, we are confident that we can successfully navigate this recession and capitalise on a recovery."

The corporation's adjusted operating loss was USD19m in the second quarter of 2011, which compares to an adjusted operating loss of USD18m in the second quarter of 2010. The adjusted operating loss for the second quarter of 2011 excludes USD2m of restructuring and long-lived asset impairment charges, while the adjusted operating loss for the second quarter of 2010 excluded USD7m.

US: On 21 June 2011 United States Gypsum Co. was assigned a patent for 'Gypsum-containing product and method for producing same.' The inventors were named as Qiang Yu, Steven W Sucech, Brent E Groza, Raymond J Mlinac, Frederick T Jones and Paul J Henkels, all from the US.

According to the abstract released by the US Patent & Trademark Office, 'The invention provides a set gypsum-containing product having increased resistance to permanent deformation and a method for preparing it comprising forming a mixture of a calcium sulphate material, water and an appropriate amount of one or more enhancing materials chosen from condensed phosphoric acids, each of which comprises two or more phosphoric acid units; and salts or ions of condensed phosphates, each of which comprises two or more phosphate units. The mixture is then maintained under conditions sufficient for the calcium sulphate material to form a set gypsum material.'

US: Like other makers of building products, United States Gypsum Company (USG), the US's largest maker of wallboard thrived during the US housing boom. But the company fell into the red in the fourth quarter of 2007 and is yet to climb out. With the anticipated housing rebound remaining elusive, average home prices in the first quarter of 2011 dropped to back to 2002 levels. This weak housing demand has spurred fears the economy may yet return to recession, with further losses expected for USG in the coming months.

USG Chief Executive James Metcalf, joked in a recent interview at the company's headquarters that he was getting tired of being asked to speak at conferences about 'managing in turbulent times' and has declined to predict when his company will return to the black.

Metcalf said that the company was building more modern plants and couldn't have foreseen the precipitous drop in housing construction, currently running at around a quarter of the peak level. USG has cut its work force by about one-third, to about 9250, since the peak. It has shrunk wallboard production capacity by about 30%, closing eight wallboard plants and idling others. The company's prolonged slump shows the peril of relying heavily on any one part of the world, even a market as large as the US, which accounts for 77% of USG's sales.

That said, USG is trying to build up sales in China, parts of Latin America and a few other areas without going fully global. Metcalf said, "We're putting bets down now -- small bets." For now though, the company's top priority is surviving the US housing collapse.