Gypsum industry news

New Zealand: The government has launched a ‘major’ review of competition rules to combat monopolies and improve economic productivity. Fuseworks Media News has reported that the review is partly a response to a gypsum wallboard supply ‘crisis’ in 2022.

Commerce and Consumer Affairs Minister Andrew Bayly said "We have launched a two-pronged approach: 1 – to update the competition settings in the Commerce Act to ensure our legal framework is right; and 2 – to review the governance and effectiveness of the Commerce Commission to ensure our regulatory and enforcement framework is right."

Canada: CGC is holding a series of meetings between 5 November and 3 December 2024 in which to discuss the possible impacts of its upcoming Wheatland wallboard manufacturing plant in Alberta with the local community. The Canadian Press News has reported that 100 jobs will be created at the plant. Hiring will commence in early 2025, prior to the plant’s commissioning later in 2024.

Plant manager Duane Van Douren said "We are focused on making sure that the communities around us are well aware of who CGC is, and providing information about our plant and the build that is happening on our site right now, which started back in early spring 2024 and is progressing very quickly.”

CGC reportedly told the Toronto Sun newspaper that current anti-dumping measures have reduced the availability of gypsum wallboard in Canada by 65Mm² cumulatively since 2016. As a result, extant gypsum wallboard stocks are sufficient only to build 220,000 homes.

New Zealand: Winstone Wallboards says it is moving away from its gypsum wallboard allocation model as a market shortage has eased. The company’s general manger David Thomas said that its GIB Weatherline and GIB Barrierline products were no longer on allocation. It now intends to take all of its wallboard products out of allocation over the next few months. The subsidiary of Fletcher Building introduced an allocation model of wallboard supply in the summer of 2022 to cope with a national shortage.

Philippines: Knauf Gypsum Philippines has petitioned the Philippines Tariff Commission to reduce the import duty on imports of Omani gypsum to 0% of value. Currently, Oman’s gypsum enjoys a most favoured nation (MFN) reduced tariff rate of 3%. The Oman Daily Observer newspaper has reported that high gypsum wallboard demand has created short supply of gypsum in the Philippines, according to Knauf Gypsum Philippines. Beside the company’s wallboard operations, the raw material is also critical to cement production in the country.

The Philippines receives a minor share of Oman’s 8.74Mt/yr of natural gypsum exports. The Southeast Asian country has a housing backlog of 6m units.

New Zealand: The government has renamed its Plasterboard Taskforce as the Critical Materials Taskforce and extended its remit to other building materials alongside gypsum wallboard. The expanded taskforce's aim will be to prevent product shortages, with a focus on maximising productivity and cushioning the effects of supply-side dangers. The government foresees further materials shortages amid anticipated 'global trade headwinds.'

Minister for Building and Construction Megan Woods said “While we can be optimistic about the opportunities for our economy, we also need to remain cautious. We know we are facing a period of global turmoil." Woods continued “The Critical Materials Taskforce will build on the successes of the Plasterboard Taskforce, and use the valuable lessons learnt to be proactive and forward-looking, so we can identify emerging risks and respond as quickly as possible. Bringing together construction, building consent and supply chain experts into a taskforce earlier this year showed how government and the sector successfully worked together to troubleshoot plasterboard shortages quickly and pragmatically.”

New Zealand's gypsum wallboard imports grew by a factor of five year-on-year to 4.6Mm² during the first 10 months of 2022. Domestic producer GIB said that it will continue to operate at full production capacity through the 2022 Christmas - New Year period in order to rebuild resilience stock levels. The company continues to make deliveries based on an allocation system. It asked customers to contact their retail suppliers if they have any spare pallets for collection, to help with deliveries.

New Zealand: Members of the building sector report that a local shortage in gypsum wallboard has started to ease. Christchurch-based Co-operative Building Supplies chair Carl Taylor told Radio New Zealand News, that since Winstone Wallboards announced a number of corrective measures in June 2022, supply had improved a "fair bit" but it was not back to levels seen before the Covid-19 pandemic started. Rick Herd, the chief executive officer of building company Naylor Love, added that Winstone Wallboards had increased its production but that a reduction in market demand had also helped.

In late September 2022, Winstone Wallboards’ general manager David Thomas thanked his customers for their patience. He added that the company was getting closer to levelling up supply with demand for wallboard across the country. Parent company Fletcher Building Materials previously said that it expected the market to stabilise by October 2022. Winstone Wallboards’ GIB product range is the main brand of wallboard used in New Zealand. The company is reported to hold around a 95% share of the local market.

New Zealand: Winstone Wallboards says that the allocation model it introduced in July 2022 and other measures it has taken are starting to ease a shortage in gypsum wallboard. The company’s general manger David Thomas said that by operating both of its wallboard plants continuously and an upgrade to its Auckland plant in July 2022 had increased its production capacity. It has also been able to resume importing wallboard from Australia. The company is currently despatching around 3.25Mm²/month of gypsum wallboard.

The company said that is going to reduce merchant lead time between order placement and delivery from October 2022 in order to improve the effectiveness of its allocation system. It hopes that doing this will provide more flexibility along the supply chain for end-users to secure product when it is needed for installation. It also asked tradespeople to continue communicating with merchants about requirements and timings in order for the wallboard producer to understand real demand levels.

Thomas said, “The team and I recognise the responsibility Winstone Wallboards has in supplying plasterboard to the New Zealand market and want to assure you we are committed to living up to that responsibility. That we have retained such a role is not just an outcome of what we do but, a result of the high level of support the market has provided us over decades.”

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.

Winstone Wallboards has been in the spotlight in recent months over ongoing supply issues of gypsum wallboard in New Zealand. Many places around the world have suffered from similar shortages of building materials following the coronavirus lockdowns. However, the shortages in New Zealand have started to generate a considerable response, as we detail below.

Rightly or wrongly, Winstone Wallboards’ dominance in the market locally has been perceived as part of the problem. It operates the country’s only two wallboard plants and it is frequently reported to hold around a 95% share of the market. It is also currently building a new 10Mm²/yr gypsum wallboard plant at Tauriko near Auckland. Commissioning is planned for mid-2023. Once completed the company will have a total national wallboard production capacity of around 40Mm²/yr.

The current problems date back to the start of the coronavirus pandemic when New Zealand started implementing its lockdowns and residential renovation work increased. The issue then gained prominence in September 2021 when Winstone Wallboards started issuing regular supply updates on its website as the government began to relax the lockdown at that time. It says that order volumes more than doubled from November 2021 to February 2022 as customers started to bring forward their orders to cope with general building material shortages. It coped for a while by using its inventory stock and by bringing in imports from Australia but the latter stopped in November 2021 due to shortages there also. So it proposed introducing an allocation model from July 2022 whereby customers could place orders no more than one month in advance. It then says it worked on increased output through plant and process upgrades with the installation of a heat exchange system for its Auckland plant planned for July 2022 and by securing further imports from an Australian producer for the second half of 2022. As of late June 2022 it expected the market to return to equilibrium by October 2022.

Unfortunately, some consumers have been vocal about their unhappiness with the supply situation. Rental property developer Simplicity Living took to the press to complain about the delays in June 2022. It added that it had started importing its own wallboard from Thailand instead. The story then became nastier when Simplicity Living alleged that Winstone Wallboards’s parent company, Australia-based Fletcher Building, was blocking imports of certain colours of wallboard. Fletcher Building clarified in the same article that it had trademarked “specific” shades of blue, green, mauve and pink to differentiate its products in the marketplace. This, of course, will be familiar to insulation sector readers of Global Gypsum as Owens Corning is arguably the world’s most famous and successful example of how to copyright a colour. It’s unclear how much of an impediment Fletcher Building’s colour trademarks have been to imports to New Zealand. The company did say in an investor presentation in late June 2022 that it had granted 10 trademark royalty-free licenses so far to allow other companies to import wallboard. To give readers an idea of the amount of attention being focused on Winstone Wallboards and its connected companies, when a shipment of wallboard was delivered early to a construction subsidiary of Fletcher Building, apparently breaking the company’s own supply rules, a video of the incident started circulating on social media before being picked up by national news channels.

Government oversight then stepped up a notch in late June 2022 with the formation of a ministerial taskforce to tackle the wallboard shortage. It plans to troubleshoot the regulation of alternative plasterboard products, look at ways to streamline the use of products that are currently untested in the New Zealand market, provide advice on building consent and explore new distribution models, amongst other goals. Alongside all of this, the New Zealand Commerce Commission started a market study into residential building supplies in November 2021. Its aim is to look into any factors that may affect competition for the supply or acquisition of key building supplies. A draft report for consultation was scheduled for release in July 2022 and the final report should be due in December 2022.

Winstone Wallboards’ woes are clearly down to the disruption caused to supply chains by the coronavirus pandemic. However, fairly or unfairly, its local market dominance has exposed it to most of the blame for the situation in the eyes of some of the New Zealand public. Its products are so integrated into the usage of wallboard in the country, for example, that the Gib brand is specified by name in many of the region’s building consent application documents. The government has now become involved adding further to the public scrutiny. Structural changes may or may not be required at some or multiple levels of the New Zealand wallboard market to fix the current crisis. Yet, funnily enough, in one interview Fletcher Building chief executive officer Ross Taylor raised the issue of customers developing the ‘fear factor’ in response to hearing about shortages and then buying more than they might need. This may sound familiar because it is exactly what happened at the start of the worldwide coronavirus lockdowns when people started panic buying toilet-roll. Whatever else is happening in New Zealand, human nature can’t be helping either.