Gypsum industry news

Canada: The Canadian Gypsum Company, a subsidiary of USG, has laid off 14 winter maintenance workers at its Little Narrows quarry in Cape Breton, according to the Canadian Press. Mine manager Byron MacMillan said that company officials have yet to make a decision on the future of the quarry. The company is looking at market conditions and is reducing spending until a decision is made. The layoffs follow winter closing since 2008.

The quarry has operated since 1935 producing gypsum and natural rock. Traditionally it has shipped its products down the eastern seaboard.

US: USG Corporation has announced it has partnered with Honeybee Robotics, a spacecraft technology and robotics company, for the field testing of Honeybee's Planetary Deep Drill System. The field testing, which will take place at USG's Plaster City gypsum quarry in Salton Sea, California is part of Honeybee's broader Mars exploration program, which aims to better understand the planet and the capabilities needed to send humans to the planet by the 2030s.

"We are honored to be the only company in our industry to play a role in this innovative endeavour to advance planetary exploration and the broader field of science," said Dominic Dannessa, Senior Vice President of Operations and Chief Technology Officer at USG. "We believe innovation comes from inspired thinking inside our company and outside of it, so sharing our geotechnical expertise with Honeybee was a natural fit."

USG's Plaster City gypsum quarry was selected by Honeybee as the ideal site to test the Planetary Deep Drill due to gypsum's similarity to cryogenic ice observed on Mars, Enceladus, Europa and other planetary bodies. Honeybee will drill 100 feet into the depths of the gypsum quarry, which is significantly deeper than drills previously deployed to Mars were capable of accessing. The field test will assess the functionality of the Planetary Deep Drill and provide data for future improvements and enhancements. Scientists have suggested that inside gypsum crystals may be the ideal environment for life to exist on the surface or near surface or Mars.

Drilling at Plaster City will take place from mid-November 2015 until mid-December 2015.

US: USG Corporation has been named by EHS Today as one of its 2015 America's Safest Companies. The award recognises 16 companies that have demonstrated innovative solutions to safety challenges, exhibited strong management support and employee engagement programmes and achieved injury and illness rates lower than average for their respective industries.

"We are proud to be recognised by EHS Today for our dedication to creating the safest environment possible for our 9000 employees around the world," said Brian Cook, Senior Vice President and Chief Administrative Officer at USG. "Safety is a core value of our organisation and every employee is committed to working safely; every minute, every task and every day."

USG's manufacturing facilities routinely operate at five to 20 times better than industry safety norms. Twelve of the company's 34 US manufacturing locations and three of its L&W Supply distribution facilities have applied and qualified for the Operational Safety and Health Administration's (OSHA) Voluntary Protection Programme (VPP) Star status. To attain the Star designation, USG employees and management work with OSHA to implement safety and health programmes and processes that go beyond regulations to further protect employees and promote safe operations.

"We developed and adhere to safety guidelines that exceed industry standards and regulations," said Paul Haney, Vice President, Global Safety and Health and Employee Relations and Chief Labour Counsel at USG. "At USG, we strive to create an injury-free workplace and model safe behaviours for our families, colleagues, customers and communities."

Asia: USG has expanded its business in the Asian region with a joint venture with Australia's Boral to strengthen its foothold in the wallboard market.

"Korea is our second-largest market and is one of the big elephants along with Australia, Thailand and Indonesia," said James Metcalf, USG President and CEO.

USG Boral, a 50-50 joint venture formed in 2014, entered the building materials business with sales and operations across Asia, Australasia and the Middle East with a goal to grow earnings from the regions and to transform the business over the longer term through its product and manufacturing solutions, which include ceilings, cement board, fibreboard and lightweight wallboard.

Metcalf said that USG Boral has a five-year capital plan of investment in the areas and facility expansion, as well as transfer of technological know-how. He declined to disclose the exact amount of investment, citing confidentiality. "With strong GDP growth, Asian countries' adoption rate is expected to increase. The critical mass happening in Korea and the rest of Asian countries will continue to round out our portfolio," said Metcalf.

Metcalf said that the marriage between USG's building supply technologies and Boral's wallboard distribution footprint in the Asian and Australian markets is expected to create greater synergies in the next decade. "I wouldn't be surprised if this part of the business becomes larger than what we have in North America in the next 10 years," he said.

US: USG Corporation has reported that, on a consolidated basis in the third quarter of 2015, its net sales were US$972m, consistent with the third quarter of 2014.

On an adjusted basis, USG's net sales increased by US$20m or 2%. Operating profit improved by US$80m to US$102m. USG's adjusted operating profit was US$115m in the third quarter of 2015, an US$8m increase from the third quarter of 2014. USG generated US$76m in net income in the third quarter of 2015, compared to a net loss of US$12m in the third quarter of 2014. On an adjusted basis, net income of US$76m increased by US$14m from the third quarter of 2014. Foreign currency unfavourably impacted consolidated net income by US$8m in the third quarter of 2015. Adjusted results exclude results from Gypsum Transportation Limited (GTL) a shipping operation which USG has exited, litigation settlement charges and impairment charges were all recorded in the third quarter of 2014.

USG's gypsum segment generated US$89m of operating profit in the third quarter of 2015. On an adjusted basis, operating profit of US$89m improved by US$4m over the third quarter of 2014, led by the US gypsum business. Wallboard provided US$7m of improved operating profit, while the surfaces and substrates businesses contributed US$6m in incremental profit. These improvements were offset by US$5m of increased selling, general and administrative spending due to the timing of projects and costs incurred, as well as a US$4m unfavourable foreign currency impact.

The USG Boral business generated US$12m of equity income in the third quarter of 2015, consistent with the amount earned in the third quarter of 2014. On a currency-neutral basis, the USG Boral business earned US$15m of equity income, a US$3m improvement over the 2014 quarter.

"We saw margin expansion in our gypsum, distribution and USG Boral businesses, notwithstanding softer than expected demand," said James S Metcalf, Chairman, President, and CEO. "In the third quarter we saw improvements in wallboard, strong contributions from our surfaces and substrates businesses, organic margin growth in distribution and continued expansion in USG Boral. With our focus on controlling costs, we are well positioned to take advantage of an improving demand environment going forward."

US: The Port of Monroe in Michigan has been busy exporting gypsum since 4 September 2015, according to Paul C LaMarre III, port director. Five consecutive gypsum loads will leave the port in less than two weeks. Most of the activity takes place at night. The first four loads for USG Corp will be shipped to Port Colborne, Ontario, while the fifth load, for Lafarge, is headed for Alpena.

"Last year, we shipped two loads and this year we will have shipped 10, with more on the horizon," said LaMarre said. The port is also 'very close' to executing a gypsum management agreement with DTE Energy, in which the port will manage and market the gypsum produced. "This would be the first such agreement of its kind between a public port and a public utility," said LaMarre. The Port of Monroe moved more than 2.4Mt of cargo through its shipping channel in 2014, shattering the record for the second time in a row.

Europe: USG has entered into a definitive agreement for the sale of its interest in Knauf-USG Verwaltungs GmbH and Knauf/USG Systems GmbH and Co KG to Knauf Aquapanel GmbH for approximately Euro48m in cash.

The Knauf-USG joint venture manufactures and distributes Aquapanel brand cement panels throughout Europe (excluding Turkey) and all countries that were part of the former Soviet Union.

USG's equity method income in the Knauf-USG joint venture amounted to Euro1.79m for the year that ended on 31 December 2014. Upon the close of the transaction, USG anticipates recording a Euro2.68 – 6.26m gain. The closing of the sale is subject to the receipt of necessary governmental approvals and other customary closing conditions and is expected to take place by the end of 2015.

US: USG Corporation has reported results for the second quarter of 2015. On a consolidated basis, net sales grew by 2% year-on-year to US$970m. Operating profit improved by 7% to US$105m. Adjusted operating profit was US$118m in the second quarter of 2015, compared to an adjusted operating profit of US$87m in the second quarter of 2014. USG generated US$79m or, on an adjusted basis, US$78m during the quarter. Adjusted results exclude results from Gypsum Transportation Limited (GTL), a shipping operation that the company has exited, included in the gypsum segment.

"All of our businesses expanded their margins and contributed to our strong second quarter," said James S Metcalf, chairman, president and CEO of USG. "We generated the highest level of net income since the fourth quarter of 2006, when demand was 50% higher."

USG's gypsum segment generated US$98m of operating profit in the second quarter of 2015. On an adjusted basis, operating profit in the gypsum segment improved by US$20m, led by the US gypsum business. Wallboard provided US$14m of improved operating profit and the surfaces and substrates businesses contributed US$9m in total incremental profit. Favourable pricing and improved volumes coupled with lower natural gas costs and operational efficiencies drove the margin expansion in the US gypsum business.

"In the second quarter, our gypsum segment realised its strongest operating margin in over eight years," said Metcalf. "We are focused on expanding our margins and growing our non-wallboard portfolio of products in this business."

Commenting on the future of USG, Metcalf said that, "We made strides in all three phases of our 'Plan to Win' in the second quarter by strengthening our core operations, diversifying our earnings base and differentiating USG through innovation. The outlook for all of our businesses is bright."

US: USG has announced nationwide availability of what the company calls, 'The lightest Type X wallboard,' USG Sheetrock Brand UltraLight Panels Firecode X. Depending on geography, the panel is available in one of two Underwriters Laboratories Inc (UL) type designations (type ULIX and type ULX).

The panels are a lightweight type X gypsum panel designed for commercial and residential construction. Both UL type designations of USG Sheetrock Brand UltraLight Panels Firecode X are formulated to achieve the strength and performance characteristics as standard 15.9mm (5/8") USG Sheetrock Brand Firecode Gypsum Panels. "The lighter weight means transportation efficiencies, productivity gains, reduced fatigue during handling and possible safety benefits," said USG's press release.

"USG is the only manufacturer to offer a full portfolio of lightweight products," said Dan Schmidt, director of product management wallboard at USG. "The new UL type ULIX panel was developed using a proprietary formulation. The primary difference between the ULIX and ULX panels is that the ULIX board requires the use of insulation in the cavity on one-hour fire-rated steel-framed assemblies, which is an industry best practice designed to meet thermal and acoustical performance requirements."

UL Type ULIX panels are available in the West North Central, Mountain and Pacific regions.

UL Type ULX panels are available in New England, the Mid-Atlantic, South Atlantic and East Central regions.

Oman: USG Zawawi Drywall SFZ 's US$37m state-of-the-art gypsum plant in Oman's Salalah Free Zone (SFZ) was inaugurated on 6 May 2015 marking the formal start of commercial production of a range of Sheetrock brand gypsum wallboard products earmarked primarily for export across the Middle East and Indian subcontinent. USG Zawawi Drywall SFZ is a 50:50 partnership between USG Corporation, Boral and Zawawi Minerals.

"We are pleased to see the opening of this successful US-Omani venture. Building relations between the US and Oman is a top priority of the US Embassy and this work is a shining example of the strategic coordination that benefits both our countries," said Ann Mason, economic-commercial officer from the US Embassy. "We applaud USG Boral and Zawawi Minerals for taking full advantage of the potential of Salalah Port and Free Zone and the US Oman Free Trade Agreement."

Commissioning of the Salalah plant, which has 8Mm²/yr of gypsum wallboard production capacity, began in March 2015. It was designed to enable future expansion to double wallboard production capacity or add new products like construction plaster. The plant will produce a wide range of Sheetrock gypsum boards, including products resistant to water, fire, sound, impact and mould. According to Curt Loring, general manager of USG Zawawi Drywall SFZ, it will produce products with special certifications not currently manufactured or available in the GCC. These products are specially engineered for custom wall systems in demand by architects for commercial construction.

The products will be marketed across the Gulf and Indian Subcontinent. Uptake is expected to be robust around the Gulf Cooperation Council (GCC), where a commercial construction boom is already underway. The raw gypsum is sourced entirely from a major gypsum quarry located in the Thamrait area of Dhofar Governorate. The quarry is operated by Zawawi Gypsum and is jointly-owned by USG-Boral and Zawawi Minerals.

"USG Zawawi Drywall's investment is in keeping with the Omani government's economic policies advocating the sustainable commercialisation of natural resources to diversify the economy, create employment for Omanis and facilitate inflows of investment and know-how. The Salalah facility operates to the same stringent safety and environmental standards applied by USG at its facilities in the US," said Alawi Al Zawawi, chairman of USG Zawawi Drywall SFZ.

Awadh Al Shanfari, CEO of Salalah Free Zone explained that the project is a re-enforcement of the Free Zone's commitment to maximise the Sultanate's mineral wealth through national and foreign partnership. "In the past, we have been focusing on projects that can create new industries linked to the available raw materials in the Sultanate. As a result of our endeavours, we will be announcing more investments during 2015," said Al Shanfari.