Gypsum industry news

US: USG Corporation (USG) has announced two executive organisational changes effective from 1 October 2013. Christopher R Griffin, previously Executive Vice President, Operations is appointed Executive Vice President and Chief Operating Officer, USG Corporation. Jennifer F Scanlon, previously Vice President, USG Corporation and President, International, is appointed Senior Vice President, USG Corporation and President, International. Griffin and Scanlon will report to James S Metcalf, Chairman, President and CEO.

Since joining the company in 1997, Griffin has had responsibility for a variety of functions and departments, including sales, product management, marketing and international operations. He has more than 28 years of experience in the building materials industry.

Scanlon joined USG in 2003 as the Director of Supply Chain Management and Customer Relationship Management Strategy. In 2007, she assumed responsibility for the company's Information Technology strategy and operations until 2010, when she was appointed Vice President, International.

"These organisational changes will facilitate the continued implementation of USG's Plan to Win: Strengthening our core manufacturing and distribution businesses in North America and Diversifying the sources of our earnings, as we continue to Differentiate USG through innovation," said Metcalf.

US: USG Corporation (USG) has reported that its net sales rose by 15% year-on-year to US$916m in the second quarter of 2013 from US$798m in the same period in 2012. Net income rose to US$25m in the quarter compared to a loss of US$57m in 2012.

"We are pleased to generate net income for the second consecutive quarter," said James S Metcalf, Chairman, President and CEO. "Results in all major business units have improved from one year ago, including L&W Supply, which achieved an operating profit for the first time since 2008." Metcalf attributed the results to the success of the company's 'Plan to Win' business strategy.

Business unit highlights from the second quarter of 2013 included a 12% rise in wallboard shipments to 120MM2 from 107MM2.

Oman: USG-Zawawi Group and Bank Sohar have signed a US$45m deal to set up and run a gypsum quarry and gypsum wallboard plant in the Salalah Free Zone in Oman. The plant will have a production capacity of 8MM²/yr in its first phase, with a capacity of 16MM²/yr planned in accordance with future demand.

Zawawi Minerals LLC is an Oman-based company belonging to the Qais Zawawi Group. Zawawi Minerals is engaged in exploring and trading high-quality industrial minerals and metal ores, like limestone, gypsum, dolomite and chrome ore. USG's partnership with Zawawi has established two joint venture companies: Zawawi Gypsum LLC and USG-Zawawi Drywall LLC SFZ. The first joint venture develops infrastructure and operates a gypsum quarry, while the second joint venture will build and operate the new gypsum board plant in the Salalah Free Zone.

US: USG Corporation (USGC) reported first quarter 2013 net sales of US$814m on 24 April 2013, a rise of 4% compared to the first quarter of 2012, when it had net sales of US$783m. USG's first quarter 2013 operating profit was US$49m compared to a US$24m a year earlier. Its first quarter 2013 net income was US$2m, compared to a US$27m net loss in the first quarter 
of 2012.

"We are pleased to report our first quarter of net income in more than five years," said James S Metcalf, Chairman, President and CEO. "All segments showed improved results in the period and our commitment to innovation and lowering our break-even are evident in our results."

The corporation's adjusted net income was US$1m in the first quarter of 2013, which compares to an adjusted net loss of US$27m in the first quarter of 2012. The adjusted net income for the first quarter of 2013 excludes US$2m of restructuring charges and a US$3m benefit from a change in tax law. The adjusted net income for the first quarter of 2012 excludes US$2m of restructuring charges and US$2m of income from discontinued operations.

"Achieving positive net income in the first quarter is an important milestone as we emerge from the most significant downturn in our company's history, but there is more work to be done," Metcalf said. "We will continue to execute 'Our Plan to Win' as the recovery continues in our core markets."

US: James Metcalf, the CEO of United States Gypsum, received a pay rise of 31% to US$7.7m in 2012, according to figures released in the company's proxy statement.

Although Metcalf's basic salary rose by 5% to US$867,000 in 2012, other perks such as stock awards, option awards and non-equity incentive plan compensation took the total from US$5.86m in 2011 to US$7.7m in 2012.

In 2012 the US wallboard manufacturer reported a loss of US$126m, reduced from US$390m in 2011.

US: More than a dozen lawsuits alleging price-fixing on the part of major manufacturers of wallboard have been consolidated in the Eastern District of Pennsylvania. The location was chosen as most of the parties are located in the area and a majority of the parties advocated for consolidation in that district. US District Judge Michael Baylson will handle the case.

"From at least September 2011 to the present the defendants, manufacturers of gypsum board, combined and conspired to fix and raise the prices at which they sold gypsum board in the United States beginning with large and coordinated price increases that all became effective on or about 1 or 2 January 2012," according to the complaint filed in one case originating in the Eastern District of Pennsylvania, Janicki Drywall versus CertainTeed.

Major manufacturers of wallboard have annual sales of more than US$5bn, according to the complaint and the defendants are seeking treble damages. The defendants in the suit account for more than 99% of wallboard sold in North America, according to the complaint. They are USG, National Gypsum, CertainTeed, Georgia-Pacific, American Gypsum, Lafarge, Temple-Inland and PABCO.

In a previous status conference for the Eastern District of Pennsylvania cases, Steven Bizar of Buchanan Ingersoll & Rooney was named as interim liaison counsel for the defence, while H Laddie Montague Jr of Berger & Montague had been named interim liaison counsel for the plaintiffs.

US: United States Gypsum (USG) has applied for a permit to withdraw up to 2.11 million litres/day of water for a gypsum plant near Crystal River in Florida. However, company spokesman Robert Williams said that the plant is not planned in the immediate future.

USG's permit application is pending with the Southwest Florida Water Management District. The district has sent USG a letter seeking more information to make sure that the planned withdrawals won't cause salt-water intrusion or otherwise harm the groundwater.

In 2011 USG purchased 72 hectares near the Progress Energy Florida power complex north of Crystal River to warehouse synthetic gypsum that is created by scrubbers at the coal-burning plants. Progress, whose parent company is Duke Energy, has a contract to sell the gypsum to USG, which is planning to build a warehouse sometime in 2013 to store the product until it is shipped to a wallboard manufacturer.

"USG proposes to construct a state-of-the art facility that is projected to bring 130 new jobs to the area and will incorporate water conservation to the greatest extent feasible," the company's consultant, Progressive Water Resources, wrote in its application letter to the water district. The letter requests a 20-year permit and states it is still negotiating for easements to the well sites and a pipeline that would transport water from the well to the manufacturing centre.

US: USG Corporation (USG) has reported its results for the fourth quarter of 2012 and for the year as a whole. These results showed that sales had increased by 12% to US$815m in the final quarter of the year, but that USG also made an operating loss of US$8m. This, however, was lower than the US$43m that it lost in the final quarter of 2011. The group's adjusted operating profit was US$5m, versus a US$38m adjusted operating loss in the 2011 quarter, but it made a net loss of US$13m. This compares favourably to the 2011 quarter, when it made a loss of US$100m.

In terms of sales, its US gypsum wallboard shipments came to 1.22Bnft² against 1.09Bnft² in the 2011 quarter. The average price was US$132.26/1000ft² ­up from US$112.59/1000ft² in the same period of 2011. USG also announced that its SHEETROCK Brand UltraLight Panels accounted for 49% of all of its US wallboard shipments for the period.

The Corporation recorded full year 2012 net sales from continuing operations of US$3.2bn, an operating profit from continuing operations of US$73m and a net loss of US$126m. For the full year 2011, net sales from continuing operations were US$2.9bn, the operating loss from continuing operations was US$206m and its net loss was US$390m.

"Our wallboard results were the strongest we have seen in over three years, and we achieved our fourth consecutive quarter of positive adjusted operating profit," said James S Metcalf, Chairman, President and CEO. "The results show that commercial markets remain choppy, but we continue to see signs of a housing recovery."

US: On 13 December 2012 USG Corporation, its subsidiary United States Gypsum Company and seven other wallboard manufacturers were named as defendants in a purported class action complaint filed in the United States District Court for the Northern District of Illinois by Sierra Drywall Systems, on behalf of itself and others similarly situated.

The complaint alleges, among other things, that the defendants unlawfully conspired to fix the price for gypsum wallboard sold in the United States through price increases for the years 2012 and 2013 and the elimination of job quotes. USG believes that the suit is without merit and has denied that it participated in any alleged conspiracy or has engaged in unlawful conduct.

US: USG Corporation has reduced its net loss in the third quarter of 2012 by US$86m, to US$29m from US$115 in the same quarter in 2011.

In August 2012 USG announced it had entered into an agreement to sell its European operations to Knauf. Results from European operations have been reported as discontinued operations for the 2012 and 2011 periods.

The corporation reported a year-on-year rise in its net sales from continuous operations of 9% in the third quarter of 2012, to US$828m from US$763m. Its operating profit from continuing operations for the third quarter of 2012 was US$29m compared to a US$79m operating loss in 2011.

Discontinued or European operations reported net sales of US$27m in the third quarter of 2012 compared to US$29m in 2011. Discontinued operating profit was US$1m in 2012 compared to US$3m.

"The announced sale of our European operations is another great example of USG's Plan to Win. Completion of this sale will allow us to reallocate assets from a lower-growth market to joint ventures supporting higher-growth markets in India, which will allow us to diversify the company's earnings and offset some of the cyclicality in our core businesses," said, president and CEO, James S Metcalf, Chairman. Metcalf added that wallboard demand remains 'significantly' below previous levels.

USG wallboard shipments rose by 14% year-on-year in the third quarter of 2012, to 366Mm² from 320Mm² in 2011. Sheetrock brand UltraLight panels accounted for 47% of all USG wallboard shipments in the United States.