Gypsum industry news

US: USG has submitted a purchase application to the Michigan Department of Natural Resources (DNR) to expand its operations for its gypsum quarry at Alabaster, Michigan. The wallboard producer wants to buy 580 acres of state property adjacent to the sitem according to the Associated Press. The DNR says it will study the company's plan, considering issues involving forestry, wildlife, fisheries, recreation and minerals. It also will consult with tribal governments and host a public meeting.

USG founded the Alabaster quarry in 1902 and it employs 20 workers at the site. Customers for gypsum from the mine include LafargeHolcim cement plant in Alpena, Michigan and St Marys Cement’s cement grinding plant in Detroit. It says it wants to expand the quarry in order to extend its life span.

US: Ann Franzen, the plant manager of USG’s gypsum wallboard plant in Rainier, Oregon has been recognised by the Manufacturing Institute as part of its annual Science, Technology, Engineering and Production (STEP) Ahead Awards. This marks the fourth consecutive year a USG employee has received this honour for her contributions to the manufacturing industry. The STEP Ahead Awards honour women who have demonstrated excellence and leadership in their careers and represent all levels of the manufacturing industry, from the factory-floor to the executive level.

Franzen, a STEP Ahead Honouree, joined USG more than 20 years ago. She became USG’s first female plant manager and has played a role in USG’s lean management initiative. Franzen is also a founding member of USG’s Women in Manufacturing group, which connects female plant employees across the USG network and promotes career advancement.

The STEP Ahead Awards are part of the larger STEP Ahead initiative, launched to examine and promote the role of women in the manufacturing industry through recognition, research, and leadership for attracting, advancing, and retaining strong female talent. In five years, STEP Ahead Award winners have impacted more than 300,000 individuals — from peers in the industry to school-aged children. The Manufacturing Institute will recognize all 130 recipients of the STEP Ahead Awards on 10 April 2018 at a reception in Washington, DC.

US: USG’s operating profit fell by 7% year-on-year to US$367m in 2017 from US$394m in 2016. Its net sales rose by 6% to US$3.2bn from US$3.02bn. In the fourth quarter the company reported that wallboard volumes in the US increased approximately by 14% while prices declined by 4% year-on-year. It made a net loss of US$95m in the quarter, in part due to a US$138m income tax expense resulting from the Tax Cut and Reform Bill.

“We had an outstanding close to a solid year for USG. The combination of focused operational performance by our manufacturing facilities and a high level of service to our customers enabled us to profitably grow our business, with net sales increasing by 13% and adjusted operating profit by 10%,” said Jennifer F Scanlon, president and chief executive officer of USG.

US: USG plans to upgrade its Jacksonville gypsum wallboard plant in Florida. As part of the investment, a new production line will be added to manufacture USG’s Securock ExoAir 430 panels. Investments will be made at the site to improve overall plant efficiency, including upgrades to modernise process mill equipment.

Construction and plant updates are expected to be completed by the end of 2018. The company also plans to add approximately 20 new jobs as a result. The addition of the high-speed, automated production line in Jacksonville is intended to allow USG to distribute Securock ExoAir 430 to more customers throughout the US and Canada.

US: USG’s operating profit for its gypsum business has fallen by 4.5% to US$85m in the third quarter of 2017 from US$88m in the same period in 2016. The gypsum wallboard producer blamed this on falling prices, rising input costs and poor weather. It said that the average realised selling price for US wallboard decreased by approximately 2% sequentially and was impacted by freight costs and changes in wallboard product mix due to hurricanes Harvey and Irma. US wallboard manufacturing costs also increased by US$10m due, primarily to increased waste paper costs. Despite this, overall net sales for the quarter increased.

“We had positive momentum in the third quarter, with increased net sales and wallboard volume,” said Jennifer Scanlon, president and chief executive officer (CEO) of USG.

Gypsum segment net sales rose by 5.4% to US$2bn for the first nine months of 2017 from US$1.9bn in the same period in 2016. Operating profit fell by 14% to US$266m from US$310m.

Colombia/Mexico: Mexican gypsum wallboard producers including USG Mexico and Abasteco Maxima (Abamax) will have to pay anti-dumping duties on imports to Colombia following an investigation by the Committee on Trade Practices. USG Mexico will be required to pay a 25% tariff, Abamax will have to a pay a 7.15% tariff and all other importers will face a 42.86% tariff, according to the Sentido Común website. The government will implement the tariffs over the next two years and will then reassess the situation.

US: USG’s Washingtonville gypsum wallboard plant in Pennsylvania plans to spend US$8m towards automation upgrades in 2017. Plant manager Nicholas Latkovic told the Daily Item newspaper that the company also expects to spend US$8m or higher in 2018. The upgrade will include 20 automated guided vehicles and automated board handling equipment to speed up the production process by 20%. The investment is also expected to add four or five people to the total workforce of 125.

US: USG Corporation has reported its financial results for the second quarter of 2017, showing a double digit increase in wallboard sales despite a competitive environment. "Our US wallboard shipments in the second quarter of 2017 were up double-digits and were at the highest levels we have seen since 2008," said Jennifer F Scanlon, President and CEO. "However, rising commodity costs and a competitive pricing environment weighed on our operating margins and second quarter performance. We are taking actions to address inflation and will continue our strategic investment in advanced manufacturing to deliver profitable growth."

On a consolidated basis in the second quarter of 2017, USG's net sales were US$811m, compared to US$769m in the second quarter of 2016. Operating profit decreased to US$96m from US$122m, while adjusted operating profit decreased to US$117m from US$127m in the second quarter of 2017 compared to the second quarter of 2016. USG generated US$36m compared to US$74m in the second quarter of 2016.

The corporation's gypsum segment generated US$90m of operating profit in the second quarter of 2017. On an adjusted basis, operating profit of US$95m in the gypsum segment decreased by US$6m compared to the second quarter of 2016. US wallboard volumes increased by 10% in the second quarter of 2017. US wallboard prices decreased by approximately 1% due primarily to competitive pricing pressures and the impact of transitioning certain wallboard volumes from wholly-owned distribution at L&W Supply, which was sold in 2016, to independent distribution. USG's US wallboard production costs increased by US$8m due almost exclusively to rising waste paper costs.

US: USG has won two manufacturing awards from Frost & Sullivan's Manufacturing Leadership Council. The building materials manufacturer earned an award in the 'Improving Operational Excellence' category for its Lean Six Sigma (LSS) programme achievements and its Mexican subsidiary, USG Mexico, earned an award in the category of 'Supply Chain Leadership' for the optimisation of its import logistics and distribution programs. The Manufacturing Leadership Awards recognise manufacturing organisations and individual leaders shaping the future of global manufacturing.

"USG is committed to manufacturing excellence and it is an honour to receive these prestigious Manufacturing Leadership Awards," said Dom Dannessa, USG's Executive Vice President and Chief Operations and Innovation Officer. "Investments in Lean Six Sigma and our Supply Chain have allowed us to better anticipate our customers' needs so that we can continue to provide them with superior solutions."

USG says that its LSS programmes have enabled it to optimise production and pricing, cut transportation costs and reduce excess inventory, leading to more than US$250m in operational savings and significantly improving team productivity. USG Mexico meanwhile invested in local distribution centres to increase its product range in the region.

US: USG's profit has been reduced due to rising commodity costs in both its gypsum and ceiling businesses. Its operating profit fell by 22% year-on-year to US$91m in the first quarter of 2017 from US$116m in the same period in 2016. Its net sales rose by 2.7% to US$767m from US$747m, roughly in line with its sales revenue growth in 2016 as a whole. The group reported that US gypsum wallboard volumes decreased by 4% in the quarter. Domestic wallboard manufacturing costs increased by US$16m due to rising waste paper and synthetic gypsum input costs.

"We had sound operational performance in the first quarter and we are seeing solid demand for our products," said Jennifer F Scanlon, president and chief executive officer. "I am encouraged about our prospects for the balance of the year, despite the uptick we are seeing in commodity costs."