Gypsum industry news

Kenya: Gypsum traders in Garissa have called on the government to lift a ban on gypsum mining in the country. The ban also prevents land allocation and demarcation. The Star newspaper has reported that it resulted from a perceived security threat due to violence at local mines, in which 12 people have died.

Mine owner Issa Kuno invited Cabinet Secretary for Mining, Blue Economy and Maritime Affairs Hassan Joho to visit. He said “Personally, I have never experienced or witnessed any insecurity related to gypsum mining activities."

Natural gypsum mined in Garissa County previously sold for US$38.60/t.

Japan: Chiyoda Ute plans to decrease the price of its recycled gypsum wallboard product in June 2024. It follows increased production and equipment improvements. The company launched the recycled product in 2023 and it said that it was the first product of its kind in the world to use 100% waste gypsum board collected from construction sites.

US: Eagle Materials reported sales of US$2.1bn in 2022, up by 15% year-on-year from 2021 levels. The producer's earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 19% to US$782m. Its light materials sales, including gypsum wallboard, rose by 22% to US$981m. Sales volumes of gypsum wallboard rose by 4% to 87.8Mm³, while it raised prices by 17% to US$8.46/m³.

President and CEO Michael Haack said "Looking ahead, we anticipate continued attractive fundamentals in our markets, despite headwinds relating to higher interest rates and affordability constraints in single-family residential construction. Among the favourable demand factors we expect will affect our results in future periods are projected funding increases for infrastructure projects and healthy demand for heavy industrial projects and multi-family residential construction. We remain well-positioned to capitalise on these conditions, given our geographical footprint across the (Central) US Heartland and fast-growing Sun Belt (Southern US) and our financial strength and flexibility."

New Zealand: Fletcher Building says it will stop using retroactive quantity-based rebates after it learned that the Commerce Commission had started an investigation into the practice in November 2022. The owner of Winstone Wallboards defended the use of such rebates and said they were common in the sector. However, it added that it was showing ‘leadership’ and had considered the commission’s preference that it not use quantity rewarding rebates. It will instead switch to a flat pricing model based on volume.

The Commerce Commission published its final report look at general residential building supplies following the release of a draft in August 2022. It set up nine recommendations to improve competition and supply of such products generally. Two main factors it identified as making it difficult for competing products to be introduced and expand in the market were the building regulatory system and quantity-forcing rebates paid by established suppliers to merchants. It noted that, under certain conditions, these types of rebate could reinforce the way the existing regulatory system was making it harder for new or competing products to access the market.

US: The producer price index (PPI) of gypsum building materials ended September 2022 at a new all-time high of 351, up by 20% year-on-year from 292 in September 2021. The figure doubled decade-on-decade from 177 in September 2012. In the shorter term, it rose by 12% from 315 over the six-month period from March 2022, and by 3.8% from 338 over the three-month period from June 2022.

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.

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.”

New Zealand: Winstone Wallboards says it will increase the supply of gypsum wallboard available for distribution by merchants by 1Mm² from July to September 2022. It said this will equate to a 7 – 8% increase of various types of plasterboard.

Fletcher Building chief executive Ross Taylor said “The increases we will be bringing to market are possible because we will soon commission changes to the configuration of our manufacturing that we have been working on over the past three months which will produce extra, locally produced, volumes. We have also been able to secure and will import additional board from an Australian manufacturer that we can feed into our supply chain.” He added that the allocation model the company has introduced had started to help supply levels and that the completion of the new plant at Tauranga in June 2023 would also help.

In early June 2022 social housing developer Simplicity Living said it had cancelled all of its orders of Fletcher Building Gib board. In an interview with Stuff, Shane Brealey - the managing director of Simplicity Living, said that the company had decided to import wallboard instead. It said it could source equivalent wallboard products at a 20% discount or more. It added that it was taking it eight weeks to import wallboard from South-East Asia compared to eight months from Auckland.

Winstone Wallboards responded to the criticism by saying it previously had been importing wallboard from Etex Australia for around six months until the end of 2021. The arrangement ended as Australia also has a wallboard shortage. However, it added that the import arrangement might restart from August 2022 onwards.

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.

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.