Global Gypsum Newsletter

Issue: GGM38 / 12 December 2017

Headlines


Peru: Volcan Peru and Eternit hold more than 90% of the gypsum wallboard market. Jaime Coronel Zegarra, a product manager for Eternit, said that since opening plants in 2013 and 2015 local production has driven off imports,
according to the El Comercio newspaper. He added that per capita consumption of wallboard rose to 0.39m2 in 2017 from 0.20m2 in 2010. Coronel Zegarra expects the market to grow by 8 – 9% in coming years.


Vietnam: USG Boral plans to invest US$20m towards upgrading its gypsum wallboard plant at the Hiep Phuoc Industrial Zone in Ho Chi Minh City. The project will increase the plant’s production capacity by 17Mm2 to 47Mm2 when it starts operation in September 2019.

"We have witnessed strong growth from this region so our decision to invest in the plant is a strategic one. We remain committed to building USG Boral's presence in Southeast Asia. This expansion will see USG Boral utilising our latest Sheetrock technology to provide superior building solutions for the Vietnam market," said Frederic de Rougemont, CEO of USG Boral.

USG Boral started wallboard production in Vietnam in 2006. It produces the Sheetrock, FireBloc, Durock and Firerock brands.


Germany: Wacker Chemie’s Supervisory Board has re-appointed Rudolf Staudigl as the company’s president and chief executive officer (CEO) for another three-year term from October 2018. It also extended the contract of Christian Hartel, who joined the Executive Board in 2015, until 2023.

Staudigl, aged 63 years, studied chemistry at the Ludwig-Maximilians University in Munich and obtained a PhD in chemistry in 1981. After research posts at Harvard University in Cambridge, Massachusetts in the US and then Ludwig-Maximilians University, he joined Wacker Siltronic in 1983. He became vice president of operations at Wacker Siltronic Corporation in Portland, Oregon in the US in 1989, and president a year later. Staudigl joined Wacker Siltronic AG’s Executive Board in 1993. In 1995, he was appointed to Wacker-Chemie’s Executive Board. Since 2005, he has been an Executive Board member of Wacker Chemie AG and, in May 2008, he became president and CEO.

Hartel, aged 46 years, studied chemistry at the University of Constance. After earning his doctorate at the universities of Geneva and Frankfurt am Main, he began his career in 2000 at management consultants Bain & Company. In 2003, he moved to Corporate Development at Wacker. After various management positions at Wacker Biosolutions and Wacker Silicones, he became head of Raw Materials Procurement in 2010 and president of Wacker Silicones in 2012. In November 2015, Hartel was appointed to the Executive Board of Wacker Chemie.


Belgium/US: MoistTech and Belgium’s Weighing & Inspection have announced a strategic partnership to provide moisture measurement capabilities for manufactured materials to customers in the Benelux region. The partnership is intended to improve productivity and streamline operations for customers by implementing near-infrared (NIR) technology for moisture measurement and control. An initial primary focus will be developing a joint marketing capability.

“MoistTech is excited to partner with Weighing & Inspection to enhance our delivery of new features to the moisture measurement industry. This will enable us to become more efficient and reduce costs for a larger audience,” said Adrian Fordham, President of MoistTech.


Oman: A significant increase in the quantity of gypsum exported by Oman has helped the country to become the world’s leading exporter of gypsum. Shipments reached a record 6.32Mt during the first 10 months of 2017. Exports for 2017 are projected to top 7.30Mt, up from 5.65Mt a year earlier.

By contrast, the long-standing crude gypsum export leader Thailand has seen exports plummet in the wake of its decision to limit outflows of the commodity in favour of the south-east Asian nation’s thriving domestic gypsum and cement industries. Its exports are estimated to come to around 5Mt by the end of 2017, versus a record-setting 6.26Mt in 2016.

The rapid development of Oman as a gypsum export hub bodes well for the development of other mineral processing sectors in the country, according to Ramachandran, Director of USG Boral Zawawi Gypsum, one of Oman’s leading producers and exporters of gypsum.

“Considering that gypsum exports from the Sultanate were non-existent barely a decade ago, I think we have come a long way in a short time,” he said. “With improved cooperation and coordination among the exporters, suitably supervised by the Public Authority of Mining (PAM), the Sultanate can build on this landmark achievement and enhance non-oil export revenue growth from this promising economic industry.”

Ramachandran added that Oman’s large reserves and its geographic position serves it well to benefit from increasing gypsum consumption in the coming years. It is now the most important source of gypsum for at least 15 countries in Asia and Africa, including India, Vietnam, Bangladesh, Japan, Indonesia, Malaysia, South Africa, Kenya and Mozambique. By far the largest importer is India, which takes around 35% of the gypsum that Oman exports.


Russia: The gypsum wallboard market is expected be 250Mm2 in 2017, according to the Stroitelnaya Informazia agency. The market has fallen by 20% since 2013 due to a fall in demand. Consumption has since stabilised and the market is estimated to fall by up to 2% in 2017.


South Korea: Wacker Chemie has broken ground on a new expansion project at its Ulsan plant. The group is building a new spray dryer for dispersible polymer powders at the unit, which will have a total capacity of 80,000t/yr. It is also constructing an additional reactor for dispersions based on vinyl acetate-ethylene copolymer (VAE), which are needed as the raw material for the spray dryer to produce dispersible polymer powders. Wacker says that the Ulsan’s plant complex, which covers the entire production chain from VAE dispersions to dispersible polymer powders, will be one of the largest of its kind in the world. Investments will total around Euro60m and production is scheduled to start in the first quarter of 2019.

The expansion is intended to meet growing demand for its binder products in the construction industries in South Korea and Southeast Asia. Wacker dispersions and dispersible polymer powders are used in a variety of construction industry applications including modifying gypsum plasters and fillers.


Germany: Australia’s James Hardie is to buy Fermacell for Euro473m. The Australian company has entered into a definitive agreement to buy XI (DL) Holdings and its subsidiaries, including the gypsum fibreboard producer. The deal is expected to close in the first quarter 2018.

“Fermacell’s market position, go-to-market strategy and strong management team will enable us to scale and accelerate our European business, which has long been a strategic goal. Fermacell will diversify our geographic, product and end-market portfolio, complementing our strong positions in North America and Australasia, and will create significant growth opportunities and drive long-term value for customers, employees and shareholders,” said Louis Gries, chief executive officer (EO) of James Hardie.

Jack Truong, President, International Operations of James Hardie, added that Fermacell’s ‘broad’ European footprint and capabilities were expected to ‘accelerate’ his company’s fibre cement business growth in Europe. James Hardie is also ‘excited’ about the future growth opportunities of Fermacell’s core business in regions such as the UK, France, and Scandinavia.


US: USG plans to upgrade its Jacksonville gypsum wallboard plant in Florida. As part of the investment, a new production line will be added to manufacture USG’s Securock ExoAir 430 panels. Investments will be made at the site to improve overall plant efficiency, including upgrades to modernise process mill equipment.

Construction and plant updates are expected to be completed by the end of 2018. The company also plans to add approximately 20 new jobs as a result. The addition of the high-speed, automated production line in Jacksonville is intended to allow USG to distribute Securock ExoAir 430 to more customers throughout the US and Canada.


US: USG’s operating profit for its gypsum business has fallen by 4.5% to US$85m in the third quarter of 2017 from US$88m in the same period in 2016. The gypsum wallboard producer blamed this on falling prices, rising input costs and poor weather. It said that the average realised selling price for US wallboard decreased by approximately 2% sequentially and was impacted by freight costs and changes in wallboard product mix due to hurricanes Harvey and Irma. US wallboard manufacturing costs also increased by US$10m due, primarily to increased waste paper costs. Despite this, overall net sales for the quarter increased.

“We had positive momentum in the third quarter, with increased net sales and wallboard volume,” said Jennifer Scanlon, president and chief executive officer (CEO) of USG.

Gypsum segment net sales rose by 5.4% to US$2bn for the first nine months of 2017 from US$1.9bn in the same period in 2016. Operating profit fell by 14% to US$266m from US$310m.


France: Saint-Gobain has continued growing its sales across all businesses in the third quarter of 2017. Its overall sales grew by 4.1% year-on-year to Euro10.2bn in the quarter from Euro9.76bn in the same period in 2016. This trend extends to the year so far, with a rise of 4.3% to Euro30.6bn in the first nine months of 2017, from Euro29.3bn in the same period in 2016.

“The third quarter confirmed the upbeat trends seen in the first half, excluding the impact of the cyber-attack. All business sectors and regions advanced, including France. We continued to see a good price effect against a tougher basis for comparison, but not yet sufficient in all of the group’s businesses given the more inflationary raw material and energy cost environment,” said Pierre-André de Chalendar, chairman and chief executive officer (CEO) of Saint-Gobain. He added that the group had signed 23 acquisitions since the beginning of the year, including the recently finalised Glava deal.

Sales from the group’s Interior Solutions division, which includes gypsum wallboard and insulation products, saw its saw increase by 3.6% to Euro5.11bn from Euro4.94bn. The group attributed the sales growth in this business to ‘healthy’ volume trends in Western Europe and in Asia and emerging countries. Trading in North America was reported as ‘stable’ but with a smaller pricing contribution in a more competitive environment. It added that pricing for the division lags behind rises in input costs such as a raw materials and energy.


Finland: Construction materials manufacturer Saint-Gobain has transferred some of the manufacturing of Gyproc Habito wallboard from the UK to Kirkkonummi in Finland. Deliveries from Kirkkonummi started at the beginning of 2017. Habito products are exported from Kirkkonummi to the Baltic and the Nordic countries.

The company has invested Euro1m in Gyproc Habito production at its Kirkkonummi site in 2017. Investments have been made in the laboratory, product development, personnel training and the production line. Virpi Riekkinen, Business Director at Saint-Gobain Finland, expects further investments to be made in 2018. Gyproc Habito accounts for roughly 10% of the production of the Kirkkonummi factory. The company expects to recruit around five new employees for the Kirkkonummi site in 2018.