Gypsum industry news

US: United States Gypsum (USG) will invest US$19m to upgrade its Oakfield paper mill in Genesee County, New York. USG has had operations in Genesee County since 1902. The company decided to invest in machinery upgrades and utility improvements in the Oakfield mill to ensure the future of the mill and retain 98 jobs. It also plans to add 12 new positions.

The Oakfield mill processes 250t/day of old corrugated waste, making it a major recycler in New York State. The facility once made USG's Sheetrock brand wallboard, but that operation closed in 2001. The plant now makes the brown back-side paper for wallboard.

According to New York State Governor Andrew Cuomo's office, the mill has been at risk of closure as other USG plants have the capability to produce more types of paper. The office said that USG qualified for up to US$665,000 in performance-based Excelsior Jobs programme tax credits and a US$400,000 capital grant from the state in return for its proposed US$19m investment and job creation commitments. USG also received a US$180,000 Community Development Block grant from the State Homes and Community Renewal programme and is applying for a grant from National Grid to assist with electrical infrastructure upgrades.

"USG's decision to strengthen its operations in New York is another example that the upstate economy is coming back," Cuomo said. "By supporting this expansion, we are securing and creating more than 100 jobs in the region and paving the way for continued growth by an employer with more than a century of history in Genesee County."

New Zealand: Building supply merchants are reluctant to stock products of Winstone Wallboards' rivals and are squeezing alternative goods, claimed the chief of a competing business who supplied documents to New Zealand's Commerce Commission (CC).

Kevin van Hest, managing director of Elephant Plasterboard, which has only 3% of the market share in New Zealand, said that suppliers were shy about stocking or selling alternatives to Winstone's Gib because they had strong financial reasons not to. Van Hest claimed that the reasons include personal rewards like invitations to sporting and other events, overseas trips and financial payments.

The Commission announced in September 2013 that it was looking into the allegation, which remains to be concluded. Rick Osborne of Winestone Wallboard's parent company Fletcher Building said at the time that his business was advised that the CC intended to inquire into its wallboard supply arrangements with building supplies merchants. "The company will fully cooperate with the Commerce Commission and is confident that its supply arrangements comply with the Commerce Act," Osborne said.

A spokesman for Fletcher Building said that the system in operation actively rewards those building supply merchants who sold Winstone board, but there was nothing wrong with the deal. "Rebate structures are prevalent in most industries and in reality amount to price competition, with supply terms being based on volume and the duration of contractual relationships," he said. "Fletcher Building is confident that its arrangements are not anti-competitive and do not breach the Commerce Act. In that regard we aim to prevent any potential anti-competitive conduct through our internal compliance programmes," said Fletcher Building's spokesman.

David Thomas, Winstone's general manager, said that the business has a 94% market share because it manufactured and delivered the best product to customers. "People do have other options and they have for the last 20 years,'' Thomas said, citing Elephant wallboard and other products including Chinese board. But van Hest said that a combination of incentives and commercial pressure on merchants meant he couldn't get any more than 3% of the wallboard market, despite being in business since the 1980s.

Lack of competition and arrangements with merchants was one of the big factors forcing New Zealanders to pay 70% more for wallboard than Australians, which increases house-building costs by 40% compared to Australia. Big chains will sell Elephant wallboard, but not necessarily from their shop floors, van Hest said. Instead, if they sold it at all, they took a builder's order and arranged delivery from van Hest's Glendene warehouse to the construction site. Very few big chains would stock Elephant board. "Stores are reluctant to trade too much in Elephant wallboard because of the financial and other incentives," said van Hest.

New Zealand: Fletcher Building, which holds a 94% share of the New Zealand wallboard market, may be hurt by a Budget decision to remove tariffs on imported wallboard and duties on other building products, according to analysts. Building products provide about 20% of Fletcher's earnings.

The government said that it hoped to reduce the cost of a standard new home by US$3500, by temporarily dropping duties on 90% of the building materials used. The cost of building materials in New Zealand is around 30% higher than in Australia.

The Building Industry Federation's chief executive Bruce Kohn doubted the Government's claim that the move would save new-home builders US$3500 and said that similar moves in Australia saw that market 'flooded' with low-quality building materials.

Finance Minister Bill English said that reducing the tariffs would build on the government's previous reforms to deliver more competition to the building materials industry. However, Labour leader David Cunliffe said, "Average prices in Auckland rose by US$6208 in April 2014. The Government's levy changes will save just two to three weeks of Auckland house-price inflation."

The Budget announced that anti-dumping tariffs on wallboard, reinforcing steel bar and wire nails would be immediately suspended for three years and tariffs on other materials such as roofing, cladding, insulation and paint would be dropped from 1 July 2014, to be reviewed in five years.

US: Eagle Materials Inc has reported financial results for fiscal year 2014, which ended on 31 March 2014. Company revenues were up by 40% year-on-year to US$898.4m and net earnings grew by 50% year-on-year to US$200m, reflecting improved sales volumes and stronger sales prices across all business lines. Annual revenue and earnings improvement also reflects the acquisition of assets, including cement plants in Missouri and Oklahoma on 30 November 2012.

Fiscal 2014 operating earnings from gypsum wallboard and paperboard grew by 46% year-on-year to US$138.5m. Revenues from gypsum wallboard and paperboard were up by 22% year-on-year at US$465.1m.

Gypsum wallboard and paperboard fourth quarter operating earnings were US$29.0m, up by 9% from the same quarter of fiscal 2013. The increase in operating earnings was due to higher wallboard sales prices and volumes, which were offset by US$1.5m maintenance costs, US$1.3m legal costs and US$0.9m natural gas costs, all of which grew compared with fiscal 2013. Gypsum wallboard and paperboard revenues for the fourth quarter grew by 11% year-on-year to US$106.3m. Wallboard sales volumes were up by 2% year-on-year to 442Mft² and paperboard sales volumes for the quarter grew by 4% year-on-year to 59,000t.

US: United States Gypsum (USG) has announced that it has no plans to build a wallboard plant in Crystal River, Florida.

Although the company has received approval from the Southwest Florida Water Management District for a 1.750ML/day general water use permit, USG officials said that the company doesn't need the plant right now. However, officials said that USG is keeping its options open for the future.

Read the original story here: USG gets water permit for wallboard plant

US: A US$24m settlement has been reached between owners of Villa Lago, a collection of private residences in Boynton Beach, South Florida and Coastal Construction regarding 'defective' Chinese wallboard.

A two-tower condominium complex was constructed by RCR Holdings II LLC at Villa Lago using Chinese wallboard. Once the residents became aware of the 'defective' wallboard they formed a class action and sued RCR Holdings. However, since RCR kept equity in the property, the two sides soon joined forces against the general contractor, Coastal Construction and other defendants.

RCR Holdings maintained that Coastal Construction and the other defendants knew the wallboard was defective when it was being installed. They further alleged that Coastal's conduct fell below the duty of care owed the class. The defendants denied knowingly using defective wallboard, although a settlement was eventually reached after six mediations.

Coastal agreed to pay US$24m, which was preliminarily approved by US District Judge Eldon Fallon on 24 April 2013. The Villa Lago owners are using the funds to remove the 'defective'wallboard.

UK: A range of British Gypsum plaster and plasterboard solutions have been used in a contemporary housing complex developed by Taylor Wimpey's North Thames regional business in Welwyn Garden City, Hertfordshire, to help the house-builder meet thermal and acoustic requirements. The large-scale new-build development includes 159 apartments and 50 three-storey terraced houses.

"Due to the size of the project and the strict timescales we were working to, we needed a solution that required as little labour as possible. Drylyner TL was easy to use and really simplified the installation process from start to finish," said Tony Butcher, senior project manager at Taylor Wimpey North Thames.

For ease of application and speed, British Gypsum DriLyner Thermal Laminate (TL), a wallboard masonry lining system, was used on partitions and separating walls. The system offers a quick and easy solution to drylining brick, block and concrete walls by utilising adhesive dabs to bond the wallboard onto the walls. This meets the acoustic performance requirements in accordance with Part E of the UK Building Regulations, to provide superior sound insulation.

For further acoustic performance, Gyproc Soundcoat Plus was used on the partition walls in both the apartments and terrace houses. This coat is a gypsum based compound that is designed to seal masonry walls prior to drylining, was used to minimise air leakage through cracks and unfilled joints, improving energy efficiency and limiting noise pollution.

In keeping with the sustainability focus of the project, Taylor Wimpey took advantage of the British Gypsum Plasterboard Recycling Service in order to minimise the environmental impact of the project.

"The Plasterboard Recycling Service was a great help. It was a cost-effective recycling option that not only saved us a lot of time and effort, but also helped us meet our sustainability objectives. British Gypsum supplied the skips we needed for the waste products and took them away to be recycled at its onsite recycling facility," said Butcher.

US: Eagle Materials has reported financial results for the second quarter of fiscal 2014, which ended 30 September 2013. Total revenues were up by 53% to US$252.6m. Earnings before interest and income taxes (EBIT) were US$63.5m, an increase of 114% compared to the same quarter of the prior fiscal year.

Sales volumes were improved across all lines, with gypsum wallboard sales volumes of 51.5Mm², an 11% increase from Q2 of fiscal 2013. This provided earnings of US$36.8m, a 52% increase from the same quarter of fiscal 2013. The earnings increase resulted primarily from the increased average net gypsum board sales prices, which were 21% higher.

Russia: Saint-Gobain has started production at its first wallboard plant in Russia. Pierre-André de Chalendar, chairman and CEO of Saint-Gobain, officially opened the plant, located near Gomzovo in the Nizhny Novgorod region, on 10 July 2013. The new Euro70m plant, which also contains a gypsum quarry, has a workforce of 87 employees.

"The start-up of this new plant is an important step in the group's development within the Russian habitat and construction markets," said de Chalendar. "With its unique portfolio of products and solutions, Saint-Gobain serves rapidly-growing construction markets worldwide. Russia's climate, its rising purchasing power and pressing need for housing means that it's a country with great potential for the group."

US: A Florida-based property development built with 'defective' Chinese wallboard has reached a US$22m settlement with the manufacturer, supplier and installer, according to its attorney.

The settlements mark the first time a multifamily structure has received compensation under the multi-district litigation in New Orleans federal court, which consolidated Chinese wallboard lawsuits from the individual homeowner to the wallboard makers, said attorney Greg Weiss of Palm Beach Gardens. Weiss has represented the owners of 320-unit Villa Lago at Renaissance Commons in Boynton Beach.

Knauf Plasterboard Tianjin reached a global settlement in the litigation to pay for the repairs. It is estimated Knauf will have to pay US$10.2m to repair Villa Lago. A previous US$4.6m settlement had been reached with the builder, RJR Holdings II LLC, Boynton Beach. In a twist, RJR Holdings was both a defendant and a plaintiff after developing the property and still owning 130 units.