Gypsum industry news

France: Saint-Gobain recorded sales of Euro51.2bn during 2022, up by 16% year-on-year from Euro44.2bn in 2021. The group reported that its sales volumes fell by 1.3% year-on-year. It nonetheless recorded growth in revenues of 9.2% in Northern Europe, 8.2% in Southern Europe, the Middle East and Africa, 33% in the Americas and 19% in Asia-Pacific.

During the year, Saint-Gobain made Euro3.8bn-worth of divestments, including of its Polish and UK distribution businesses, and Euro1.9bn-worth of new acquisitions.

CEO Benoit Bazin said “In an unsettled geopolitical, energy and macroeconomic environment in 2022, the group once again delivered record results. The group’s profile has been profoundly optimised: one-third of the group’s scope has changed in the past four years and over 60% of our earnings now come from North America and emerging countries." Bazin continued "I am confident that 2023 will be a good year for Saint-Gobain. Our roadmap is clear: disciplined execution of the Grow & Impact strategic priorities, leveraging the strength of our operating model against the backdrop of a slowdown in new construction but good resilience in renovation."

Romania: Germany-based Knauf has announced plans for the construction of a new gypsum wallboard plant at Huedin in Cluj County. The company said that it plans to invest Euro76m in the plant’s construction. It says that the investment will advance the Romanian government's 'energy savings offensive' by supporting a renovation drive for the country’s housing stock. The government aims to increase the national area of modern renovated properties by a factor of six, with a Euro30bn allocation from its Recovery and Resilience Fund.

Knauf's managing partner Alexander Knauf said “The commitment demonstrates our trust and confidence in the country and our employees. We look forward to becoming part of the local community. Together, we are setting new standards for building and living in Romania.”

Knauf had previously planned to build a 35Mm²/yr gypsum wallboard plant at Huedin at a cost of Euro70m. A mine at nearby Aghireșu would supply the planned plant with raw materials. The Aghireșu mine reportedly has 100 years' worth of gypsum reserves. Knauf first delayed its Huedin plant plans in 2009 in light of the economic situation at that time.

US: Eagle Materials offset higher energy and maintenance costs by raising the prices of its products in the first quarter of its 2023 financial year. This contributed to an 18% year-on-year sales rise to US$561m. The group achieved earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$184m during the quarter, up by 13% year-on-year.

President and CEO Michael Haack said "Our results this quarter exceeded our expectations, as our portfolio of businesses performed well, and we executed on the opportunities available to us. Construction activity remained healthy across our markets, and we realised broad pricing gains across our portfolio again this quarter."

The producer’s light materials sales rose by 30% year-on-year to US$248m due to increased gypsum wallboard sales volume and prices. Wallboard volumes increased by 5% to 74.1Mm2; their average price increased by 24%. Haack said “In our light materials sector, wallboard shipments and orders remain strong, but we recognise quantitative tightening will likely have an impact on residential construction activity in the future. In the near term, we expect record home construction backlogs to support product demand this year. With Eagle's excellent balance sheet, the favourable geographic positioning of our operations and consistent execution of our operating strategies, we are poised for a strong fiscal 2023."

US: Eagle Materials has recorded consolidated sales in its 2022 financial year of US$1.9bn, up by 15% year-on-year. The group’s adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) was US$657m, up by 15%. Full-year light materials sales totalled US$804m, up by 27%, with gypsum wallboard and paperboard operating earnings of US$274m, up by 42%. The group sold 269Mm2 of gypsum wallboard, up by 3% year-on-year.

President and CEO Michael Haack said "As we look back on another extraordinary year, I am extremely proud of our team's ability to deliver record operating and financial results despite multiple external challenges, including transportation disruptions, supply chain constraints and, of course, continuing to navigate the Covid-19 pandemic.” He added "As we begin our new fiscal year, Eagle is well-positioned, both financially and geographically, to capitalise on the underlying demand fundamentals that are expected to support steady and sustainable construction activity growth over the near and long term. We expect that infrastructure investment should increase in the latter part of our fiscal year, as federal funding from the recently enacted Infrastructure Investment and Jobs Act begins in earnest. And, despite recent interest rate increases, housing demand remains strong across our geographies, outpacing the supply of homes. Nonresidential construction activity is also picking up."

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.

Brazil: Saint Gobain has predicted a 40% year-on-year turnover increase from its Brazilian operations to US$2.63bn in 2021. It said that it expects demand for its products from civil construction to have accounted for 67% of its income for the year.

In 2021, Saint-Gobain invested a total of US$52.6m in its Brazilian operations, consisting of 56 sites. It aims to increase its total income by 15% in 2022 compared to 2021 levels. During the year, it plans to commission a new gypsum wallboard plant at Mogi das Cruzes in São Paulo.

US: Saint-Gobain has agreed to buy construction chemicals producer GCP Applied Technologies. Reuters News has reported that the move continues Saint-Gobain’s industrial diversification, as it also seeks to maximise its growth opportunities from the US’s on-going infrastructure overhaul. Saint-Gobain expects to conclude the deal by 2023 and will finance the acquisition through cash on its balance sheet.

Chief executive officer Benoit Bazin said “After the successful acquisition of Chryso, GCP is the logical next step to expand Saint-Gobain's presence in admixtures and additives, which provide key solutions to de-carbonise the construction industry.” He added “This acquisition is a decisive step in establishing Saint-Gobain's leading position worldwide in construction chemicals, with total sales of more than US$4.51bn [combined], up from US$3.39bn.”

World: Market researcher Future Market Insights (FMI) has estimated that the global market for gypsum for all applications will record a compound annual growth rate (CAGR) of 5% between 2022 and 2030. FMI said that this will be due to a global rise in construction, driven by digitisation and technological advances. In order for growth to return, economic activity must first return to ‘normal’ in the wake of the Covid-19 outbreak, according to FMI.

Research agency Technavio has also given its forecast for growth in the synthetic gypsum market between 2020 and 2024. It has predicted a CAGR of 4%, with total growth of US$320m over the period.

France: Saint-Gobain has launched Grow & Impact, a new strategic plan to increase profitable growth. The plan consists of new annual financial targets for 2021-2025, including organic sales growth of 3 - 5%, an operating margin of 9 – 11%, a free cash flow conversion ratio above 50%, a return on capital employed of 12 - 15% and an annual dividend payout ratio representing 30-50% of recurring net income. The company also announced a Euro2bn share buyback programme for 2021 – 2025.

Saint-Gobain has forecast full-year energy and raw materials costs of Euro1.5bn, up by 36% from its previous estimate of Euro1.1bn. Euro1.1bn (73%) of the new estimate is forecast for the second half of 2021. The group said that it will need a positive price impact of around 6% over the full year and of 8% in the second half of 2021 in order to offset this. CEO Benoit Bazin said “The Group will build on the success of its new local organisation and its multinational culture driven by performance and by proximity to its customers, in order to benefit fully from strong growth on its underlying markets. By capitalising on innovation and the power of data to enrich our range of solutions, Grow & Impact will enable us to outperform our underlying markets and maximise our positive impact in numerous areas.” He added “Our vision is to become the worldwide leader in light and sustainable construction. In a world moving towards net-zero carbon, Saint-Gobain aims to provide a full range of solutions that address three major issues of our time: drastically reducing the 40% of CO2 emissions linked to construction, protecting natural resources and facing the challenge of rapid urbanisation in emerging countries.”

UK: British Gypsum has signed the Building a Safer Future (BSF) charter as part of its wider commitment to raise building standards across the construction industry and provide transparency to its customers. The charter comprises five commitments that require registered signatories to put building safety first. The commitments include spearheading change and being the voice of building safety within the industry, being transparent in sharing key information with residents, clients, contractors and other stakeholders, and making safety a key factor when selecting construction partners.

Marketing director Stacey Temprell said “We recognise that becoming a registered signatory of the BSF charter is an important first step towards achieving the culture and behavioural change required in relation to the charter’s objectives around building safety. In confirming our support as a registered signatory, we will now be working to ensure that we embed the principles of the charter into our organisation’s activities.” Temprell added “In addition to signing the Building a Safer Future charter, we are making further improvements to ensure our product and system performance data is always up to date and accurate, so joining like-minded businesses in signing the Charter is a great way for us to demonstrate our commitment to this shift in building standards and put safety first.”