Global Gypsum Newsletter

Issue: GGM19 / 14 April 2015

Headlines


Vietnam: Gypsum and Cement JSC (TXM) has announced that it will target US$314,772 of pre-tax profit on US$29.2m revenues and 4% dividend in 2015. It reported US$384,207 of pre-tax profit on US$28.9m revenues and 3% dividend in 2014. In 2015, TXM plans to invest in the DAP Dinh Vu plant, which manufactures artificial gypsum, and is looking for partners for a project exploiting gypsum in Laos.


Colombia: Etex has appointed Agustin Cozzi as the top manager in Gyplac, a manufacturer of plasterboards based in Cartagena. The change follows the retirement of Felipe Montes after 23 years as head of Skinco Colombit. Mauricio Lopez, who was previously a manager at Gyplac, has become the top manager of Skinco Colombit, a firm with a factory for fibre cement products in Manizales. Miguel Fernando Rangel has been appointed as Etex's new top manager at the helm of Ceramica San Lorenzo, a manufacturer of floor and wall tiles in Sopo.


Belgium: Etex Group has reported a 1.9% year-on-year drop in sales revenue to Euro3bn in 2014. Earnings before interest, taxes, depreciation and amortisation (EBITDA) fell by 11.6% to Euro226m from Euro234m. It attributed the decline to a poor second half, which was hit by a slowdown in public and private investments, poor exchange rates in South America, slowing growth in emerging markets and recession-like conditions elsewhere.

In its outlook Etex anticipates that cyclic fluctuations will continue to appear in all of its markets throughout 2015. Emerging markets are expected to show minor growth, while the fundamental situation in Europe, and particularly in France, needs to improve further. "Overall results are expected to be stable", says Paul Van Oyen, CEO of Etex.


Bulgaria: Gips has reported that it made a consolidated loss of Euro2.1m in 2014 compared to the consolidated profit of Euro0.32m it declared in 2013. Consolidated revenue rose by 0.8% year-on-year in 2014 to Euro3.17m, Gips said in its latest financial statement. Natural gypsum producer Gips was set up in 1965.


Azerbaijan: Gypsum exporters in Azerbaijan deliberately reduced export prices of gypsum by a factor of 10 in 2014 to evade tax, according to research by the Turan Information Agency conducted on data from Azerbaijan and Georgia state sources.

According to the research, the export and import values for gypsum failed to match between Azerbaijan and Georgia in 2014, leading to a US$24.1m tax shortfall. Gypsum exported from Azerbaijan was valued at US$17/t but gypsum imported into Georgia was valued at US$170/t. Almost all export of gypsum of Azerbaijan appeared to go to Georgia according to data from the National Statistics Office of Georgia. Turan dubbed gypsum producers in Azerbaijan as the 'Gypsum Mafia'.

The main producers of plaster in Azerbaijan are Garant Holding and Gilan Holding. Both companies are located close to gypsum deposits in the Goranboy region. Gilan Holding has a joint venture with the German company Knauf for the production of wallboard.


France/Switzerland: Saint-Gobain has said that the validity of its agreement with the Burkard family for the acquisition of the shares in Sika has been extended to 30 June 2016, with an option to further extend the agreement.

French construction material producer Saint-Gobain and the Burkard family decided to change their agreement on the sale of the shares of Schenker-Winkler Holding (SWH), which holds the majority of the voting rights in Sika, and to extend the validity of the agreement, the French group said in a statement. Holding company SWH owns a 16.1% stake in Sika and 52.4% of the voting rights.

"Under no circumstance can Saint-Gobain be forced to purchase the shares of SWH if its stake in Sika would not represent the majority of the voting rights or if such acquisition would trigger the obligation to launch a mandatory offer to all Sika shareholders," the company said in a statement.

In December 2014, Saint-Gobain had announced its intention to buy this stake for Euro2.6bn, thus acquiring control over Sika.


Cambodia: Thai Gypsum Products, the Thai subsidiary of Saint-Gobain, has signed a joint-agreement with Cambodian company Camstar to expand its distribution networks in Cambodia. French multinational Schneider Electric also signed the agreement. The European companies hope to use Cambodian construction materials firm ISI Group, Camstar's parent company, to connect them to a nationwide distribution network of over 300 outlets and more than 100 contractors, according to local press.

Thai Gypsum Products, which manufactures gypsum used in wallboards for Saint-Gobain's Thai operations, said it saw a 'big opportunity' to expand its networks for gypsum delivery in Cambodia ahead of the upcoming Association of Southeast Asian Nations (ASEAN) economic community due at the end of the 2015.

"Thailand has been our strong establishment as well as a centre of goods distribution to neighbouring countries," said managing director Richard Juggery. "Now we see a good potential of Cambodia as the country has attracted more foreign investors and performed outstanding business growth in past few years," he added.


US: Al Mueller has joined the PABCO Building Products LLC board of managers with effect from 1 April 2015. Following Mueller's retirement as PABCO's president, he served on the Basalite Concrete Products LLC board of managers and will continue to do so going forward. Mueller gained a wealth of experience in the gypsum, roofing and paper industries, while providing leadership during his tenure as PABCO's president. His knowledge and expertise of both the industry and the operations will be a very valuable addition to the board.


US: Gypsum Management and Supply Inc (GMS) has made a strategic entrance into the California and Hawaii markets by acquiring San Diego-based J&B Materials Inc and its affiliated Hawaiian operation, Pono Building Materials LLC.

"We are pleased to bring J&B Materials and Pono Building Materials into the GMS family," said Mike Callahan, president of GMS. "Their commitment to delivering exceptional service, knowledgeable personnel and an expansive product suite with a focus on safety fits well within our culture. This partnership provides us with an excellent opportunity to expand our service area into California and Hawaii while enhancing our West Coast coverage."

J&B Materials has locations in El Cajon, Escondido, Riverside and El Centro in California and one in Honolulu, Hawaii. J&B offers a wide variety of building products including wallboard, stucco, lath and plaster and fasteners among others.

Don Taylor, the GMS vice president of operations for the western region, sees the acquisition as a key step in growing the GMS footprint in California and the whole southwestern US. "We feel that J&B, with its exceptional customer relationships and strong brand name, will be a key component to further expansion. With Bob and Jeff Young joining our team, this will give us the additional management depth to continue our growth," said Taylor.


US: Transnational Group Inc has exchanged executed Letters of Intent with Nevada Outdoor School to secure rights to mine gypsum on several claims located in southern Nevada that comprise Mount Vista Gypsum Property. Transnational Group expects the project to yield over 600,000t/yr of gypsum and could begin producing during the third quarter of 2015.


Australia: Boral will repurchase up to US$182m of its shares after a string of divestments bolstered the company's balance sheet. It intends to buy back up to 5%, or about 39 million shares, of its issued capital on-market over the next 12 months.

Boral chief executive Mike Kane said that the completion of a number of transactions, including the US$127m sale of its Western Landfill business in Melbourne to Transpacific Industries, had allowed for the share repurchase.

"This buyback reflects Boral's commitment to efficient capital management and delivering improved returns to shareholders," said Kane. "At the same time, we are maintaining flexibility to respond to changes in market conditions and to take advantage of appropriate growth opportunities that may present in the future." Kane had already flagged acquisitions in Asia and North America and said that Boral was too unbalanced towards Australia.

Boral received US$500m as part of an agreement with USG Corporation to sell half of its Australasian wallboard assets into a joint venture. It is on target to receive further performance-based payments of up to US$57.7m over the next three years.

Boral was reportedly considering a sell-off of its building products division, but indicated it would instead look for savings through cost-reduction programs and joint ventures. A brickmaking joint venture with CSR will proceed after receiving approval from the Australian Competition & Consumer Commission, with the expectation of savings of between US$5.39 – 7.69m between Boral and CSR.


US: Gypsum Management and Supply (GMS) has signed an agreement to acquire Ohio Valley Building Products based in Wheeling, West Virginia. Ohio Valley Building Products, which supplies wallboard, ceiling products and insulation services, will be the 34th wholly-owned subsidiary of GMS. The deal marks the strategic entrance of GMS into West Virginia, western Pennsylvania and eastern Ohio.

"We are excited about the addition of Ohio Valley to the GMS family," said Mike Anderson, vice president of the northeast region. "The greater Pittsburgh/Ohio Valley market has been of key interest to us for years. Eric Bayer and his team will be key to us growing in this market in the future."

"I am very excited to join with GMS," said Eric Bayer, president and owner of Ohio Valley Building Products. "We pride ourselves on providing excellent customer service and that fits well with GMS. We cannot wait to get started."


US: Taishan Gypsum Company Limited, which is a 65% held subsidiary of China National Building Materials' (CNBM) 45.2%-owned subsidiary Beijing New Building Material Public Limited Company (BNBM), has refused to participate in a Judgment Debtor Examination in the United States District Court of Louisiana.

Taishan Gypsum has been ordered to pay US$15,000 in attorney's fees, US$40,000 as a penalty for contempt and has been banned from conducting any business in the US as Taishan Gypsum or via its affiliates or subsidiaries until or unless it participates in the judicial process. If it violates the injunction, it will pay a further penalty of 25% of the profits earned for the year of violation.