Gypsum industry news

Ukraine: Knauf says that it hopes to rebuild its Donbass gypsum wallboard plant “as soon as conditions allow.” According to the Frankfurter Allgemeine Zeitung newspaper, the company has been supplying the local market from its Kiev plant. This unit was previously shut down but re-opened in mid-2022. Knauf also aspires to play a part in the reconstruction of social facilities for the country by assisting in the building of nurseries, schools and hospitals.

The company’s Donbass plant is located near to Bakhmut on the front line between the Russian and Ukrainian armed forces. The site was reportedly bombed directly in May 2022 during a Russian airstrike.

Ukraine: A US White House official has accused the Wagner Group of conducting military operations near Bakhmut with the objective of seizing raw gypsum and salt deposits in the area. The official said that there were indications that monetary motives were driving the mercenary group and Russia’s "obsession" with the city, according to Reuters. The US government has previously accused Russian mercenaries of exploiting natural resources in the Central African Republic, Mali and Sudan to help fund Moscow's war in Ukraine. The Russian government has rejected the allegations.

Russia claims that its army took control of Soledar, a town near Bakhmut, on 13 January 2023. However, western European news sources have been unable to independently verify this. Etex’s local subsidiary Siniat Ukraine operated a gypsum wallboard plant on the outskirts of Bakhmut before Russia invaded the country in February 2022. The current status of the plant is unknown.

Belgium: Etex’s revenue rose by 16% year-on-year to Euro1.79bn in the first half of 2022 from Euro1.46bn in the same period in 2021 on a like-for-like basis. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) grew by 20% to Euro319m from Euro266m.

Bernard Delvaux, the chief executive officer of Etex said, “In the first half of 2022, like many other industrial players, Etex had to cope with significant raw material and energy price inflation in the context of post-Covid-19 disruptions, volatility and the war between Russia and Ukraine. To face this situation, we had to implement a number of price increases. Our volumes and margins have been impacted, but these measures allowed us to achieve a positive evolution of both top line and bottom line.”

The company’s Building Performance division reported slightly lower gypsum wallboard sales volumes despite delivering a 16% increase in revenue to Euro1.23bn. The group also created an Insulation division in May 2022 following the completion of its acquisition of URSA.

Ukraine: The Russian military has reportedly damaged Knauf’s Donbass gypsum wallboard plant in an airstrike. Ukrainian Donetsk regional military administration chief Pavlo Kyrylenko posted on social media on 17 May 2022 that firefighters were working to contain and quell the blaze at the plant in Donetsk Region. Nobody was injured in the attack.

Knauf sent home the Knauf Gips Donbass plant’s 589 employees ‘as a precaution’ at the outbreak of war on 24 February 2022.

Knauf maintains 14 facilities with a total of 3900 employees in Russia.

Russia: Volma has reported increased demand for gypsum wallboard as well as other products including its plasters in the first quarter of 2022. It says it has compensated for economic sanctions imposed by countries in European Union by raising exports to countries in the Commonwealth of Independent States although its key market remains in Russia. However, it fixed its prices in March 2022 to support the local construction sector. In 2021 the building materials company invested around Euro7m towards upgrading its plants. One of the largest projects was the installation at its Voskresensk plant of a new gypsum furnace, which it says it the largest in Europe.

France: Saint-Gobain says that it is confident it can offset inflation in raw material and energy costs in 2022 through price rises and hedging its energy costs. In an update on its first quarter results the group said that it expects its energy and raw material costs to increase by around Euro2.5bn in 2022 as a whole compared to 2021. Much of this inflation is related to the European market where the company says it has hedged around 80% of its natural gas and electricity purchases for 2022. It noted that it increased its prices and sales volumes by 14.5% and 1.9% year-on-year respectively in the first quarter of 2022.

The company added it had prepared contingency plans in Germany, Poland and the Czech Republic should there be any disruptions to natural gas supplies from Russia. These include the classification of priority industries, using alternative energy sources already prepared at certain sites, and increasing the flexibility of its production capacities.

Saint-Gobain’s sales rose by 16% year-on-year to Euro10.4bn in the first quarter of 2022 from Euro12bn in the same period in 2021. The group said growth was driven by building renovation in Europe and by construction in the Americas and in Asia.

Mexico: The price of gypsum and its derivatives has risen by up to 12% in April 2022 compared to pre-Russian invasion of Ukraine levels. Along with a rise in the price of other materials, this has increased the cost of new house builds by 25 – 30%.

The Mexican Ministry of Foreign Affairs has reported that Russia was previously Mexico’s 35th largest trade partner.

Russia: Volma says it fixed its product prices for key customers from mid-March 2022. Vladimir Ovchintsev, the general director of Volma, said, “Sometimes it is worth making decisions that are not so beneficial for business, but extremely important for supporting our partners.” He added that the company would lose profitability but that the company viewed it as strategically important to support the construction sector. He added that the decision was important in ‘unpredictable and changeable’ conditions.

Russia: Belgium-based ETEX has announced the suspension of all of its Russian activities ‘immediately and until further notice.’ The gypsum wallboard producer operates two sites for the import and sale of fibre cement façade materials near Moscow. It says that it will take care of the 50 colleagues it employs there.

The group said “We will continue to do everything we can for the safety and well-being of all our teammates and hope that peace will prevail quickly.”

Russia/Ukraine: Jörg Schanow, a member of the management board of Knauf, says that the company has no plans to leave the Russian market. In an interview with the Süddeutsche Zeitung newspaper he said that Russian production sites were still running as normal.

The company has set up crisis management team since the start of the war in Ukraine in late February 2022. It has been meeting daily and discussing the situation with local management in Russia. Schanow said that the biggest business problem so far was the effect of US and European economic sanctions upon Russian banks and the consequences upon moving money between banks, suppliers and customers. The Germany-based company employees 3900 staff at 14 sites in Russia. It originally purchased a gypsum plant at Krasnogorsk near Moscow in 1993.

Knauf also has operations in Ukraine. It closed its gypsum wallboard plant in Donbass in response to the current war on 24 February 2022 ‘as a precaution,’ according to the TZ newspaper. The staff were sent home and the plant will remain closed into further notice. The plant had 589 employees at the end of 2021, none of whom where German nationals.