Gypsum industry news

US: Gypsum wallboard producers sold 1.32Bnm² of gypsum wallboard in the first half of 2022, a similar amount to that in the first half of 2021. Total supply of gypsum fell by 2% to 20.3Mt from 20.8Mt. This was due to decline in mined gypsum supplies, although imports rose and synthetic gypsum supply remained the same.

Exports of gypsum wallboard fell slightly year-on-year to 18.6Mm² throughout the second quarter of 2022, up by 10% year-on-year from 16.9Mm². Canada received 95% of US gypsum wallboard exports. The US imported 22.9Mm² of gypsum wallboard from eight countries. The figure corresponds to an increase of 10% year-on-year and 3% quarter-on-quarter. Mexico supplied 91% of US gypsum wallboard imports, followed by Canada with 8%.

New Zealand: Fletcher Building Materials recorded consolidated sales of US$5.37bn during its 2022 financial year, up by 4.7% year-on-year from US$5.13bn in the previous year. Its net earnings also rose by 42%, to US$273m from US$193m.

The group's building materials division, which includes Winstone Wallboards, contributed US$1.02bn-worth (17%) of group sales. The business delivered 'strong' volumes, with pricing initiatives effectively offsetting cost inflation. The latter particularly impacted imports of raw materials. The business made capital expenditure investments of US$129m, of which US$98.4m went towards the construction of Winstone Wallboards' upcoming Tauriko gypsum wallboard plant in the Bay of Plenty region. The plant's commissioning in 2023 will increase the company's production capacity by 30% and reduce its CO₂ emissions and waste generation.

Fletcher Building Materials chief executive officer Ross Taylor said "The 2022 financial year has not been without its challenges. Global and national supply chain disruptions have continued into the third year of the Covid-19 pandemic. In New Zealand, surging plasterboard orders following the first quarter lockdown outstripped our ability to supply, despite our manufacturing facilities running at record levels. In recognition of our key role as a local manufacturer in keeping the market supplied, we carried out a range of measures to address the shortage including operating production lines 24/7, running down inventory, importing additional product, and establishing an emergency supply pool." Taylor added "The New Zealand Commerce Commission recently published its interim market study report into residential building supplies. The final report and recommendations will be published in December 2022 and in the meantime we will continue to work collaboratively with both the commission and the government."

New Zealand: The Commerce Commission has said that builders have found it difficult to substitute alternative brands of gypsum wallboard because the building material is commonly specified by brand in building plans. Differences in consenting decisions by local government authorities and quantity-forcing rebates for wallboard have also been identified as making it harder for builders to source supplies. The regulator has been investigating general residential building supplies since November 2021 and made the comments as part of a draft report.
Commission chair Anna Rawlings said “Our preliminary view is that competition for the supply of key building supplies is not working as well as it could, and would be improved if it was easier for building products to be introduced and for competing suppliers to expand their business.”

The draft report has found certain brands of product have become ‘embedded’ in home-building practice in New Zealand and has recommended that the building regulatory system should include competition as a deliberate objective. It added that, in some circumstances, some types of rebates paid by established suppliers to merchants appeared to be reinforcing difficulties faced by competing products. The commission will now take comment on its draft report until September 2022. The final report will be published in December 2022.

Winstone Wallboards’ GIB product range is the main brand of wallboard used in the country. The company is reported to hold around a 95% share of the local market. Wallboard shortages have been reported since mid-2021.

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."

Switzerland: Sika’s sales were US$5.45bn in the first half of 2022, up by 18% year-on-year from first-half 2021 levels. The group also increased its operating profit during the half, by 23% to US$874m.

CEO Thomas Hasler called market conditions during the half ‘challenging.’ He continued “Thanks to our broad diversification, we operate in several markets with different levels of maturity, and we can leverage our solutions across a broad base. We were largely able to offset the increase in price for raw materials with higher product prices, and supply bottlenecks were resolved via our global procurement organisation. The current challenges will remain in the second half of 2022, but I am confident that we can meet our targets for 2022 thanks to our dedicated employees.”

UK: Portugal-based Gypfor has agreed to sell its upcoming Newport gypsum wallboard plant to Germany-based Knauf. Gypfor began building the plant at Associated British Ports’ Port of Newport in March 2021. Knauf estimates that it will commission it later in 2022, and commence full operations in 2023. The plant will be equipped with solar and wind power plants, as well as on-site gypsum wallboard recycling facilities. 54 people will be employed in gypsum wallboard production at the site. Knauf says that the addition of the new plant to its existing facilities at Immingham, Lincolnshire, and Sittingbourne, Kent, will enlarge its UK capacity by 20%.

Knauf’s UK managing director Ian Stokes said “This new plant will significantly increase our ability to service customers throughout the UK, and particularly those in South Wales, the Midlands and the South-West of England. It is a very exciting move for Knauf and, following recent investment in increasing the capacity of Knauf Insulation, reflects the confidence of the Knauf Group in the UK construction sector.”

New Zealand: The government has established a taskforce to tackle the on-going national gypsum wallboard shortage. Scoop News has reported that the taskforce consists of industry experts. The body says that it will renew the focus on competition in the building materials sector. Minister for Building and Construction Megan Woods has written a letter to Winstone Wallboards' parent company Fletcher Building regarding trademark protections, specifically urging it not to take action on its product colour trademarks. The taskforce also plans to explore new distribution models and investigate the potential of new products in the New Zealand market.

Megan Woods said "The taskforce has a very clear aim: to increase sector productivity as quickly as possible, and to remove any unnecessary barriers, including around certification, to facilitate the use of different types of plasterboard."

Japan: Data from the Gypsum Board Industry Association shows that domestic shipments of gypsum wallboard fell by 0.9% year-on-year to 455Mm² in 2021. This is the second consecutive annual decline, according to Nikkei. Local wallboard production is reportedly linked to new housing starts in the country. Recovery in non-residential markets, such as office interiors, has been slow.

Peru: Etex says that an upgrade to its Huachipa gypsum wallboard plant is currently being built and should be operational by mid-2023. It is intended to double the production capacity of the unit, according to the Gestión newspaper. The company has invested Euro36m in the project.

Etex markets its wallboard under the Gyplac brand locally. Robert Haanschoten Rodríguez, Etex’s Andean Region Marketing Manager, said that the country exhibits a strong self-build market. Gypsum wallboard sales represent 20 – 25% of the group’s sales in the country. Since 2018 sales of wallboard have grown by 50%. The country reportedly has a wallboard consumption of 0.7m²/capita compared to 4m²/capita in Chile. However, increases in the cost of raw materials have led Etex to put its product prices up by 5 – 12% across all lines.

World: Market researcher IMARC Group has forecast a global gypsum wallboard market composite annual growth rate (CAGR) of 7.2% between 2021 and 2026. The prediction is based on a starting value of US$24.4bn in 2020. IMARC Group surmises that the residential sector will dominate demand, which will be strongest in the Asia Pacific region.