Global Gypsum Newsletter

Issue: GGM43 / 06 August 2019

Headlines


US: Gypsum Resources has filed for Chapter 11 bankruptcy at the Nevada US Bankruptcy Court. It is aiming to reorganise the business amid financial and operational difficulties, according to the Las Vegas Reiew Journal newspaper. The company operates a gypum mine at Blue Diamond Hill but it has been trying to develop a residential housing project at the site for over a decade. The development has been opposed by local environmentalists.

Company president James Rhodes blamed the bankrupty decision on ambitious growth plans, disrupted mining operations due to equipment failure and bad weather. He was optimistic that market demand for gypsum is steady and that the company will report positive net income later in 2019. The mine supplies gypsum to the wallboard, cement and agricultural industries.


US: Continental Building Products says it has been confronting a ‘sluggish’ new home construction market in the second quarter of 2019. Jay Bachmann, president and chief executive officer (CEO), said that the company was expecting the market to recover in the second half of the year and its improvement programme to reduce costs. Its net sales fell by 4% year-on-year to US$246m in the first half of 2019 from US$256m in the same period in 2018. Its net income dropped by 34% to US$28.8m from US$35.5m. Its gypsum wallboard volumes fell slightly by to 123Mm2.

The wallboard producer also said that the shutdown of its Buchanan plant in New York due to mechanical failure might cause a boost operating income and earnings before interest, taxation, depreciation and amortisation (EBITDA) of up to US$2m once an insurance claim is settled. The plant was shut from January 2019 to 15 March 2019. The company increased production at its plants in Silver Grove, Kentucky and Palatka, Florida to offset a portion of the lost production from the Buchanan plant.


Vietnam: Vietnam National Chemical Group’s DAP No 1 – Hai Phong fertiliser plant is exploring options to use phosphogypsum as an additive in cement production. The company is working with the government on finding a use for the by-product of fertiliser production, according to the Viet Nam News newspaper. Duong Duy Hung, the director of the Planning Department at the Ministry of Industry and Trade, said the Ministry of Construction and the Ministry of Science and Technology have been developing new standards and regulations on the use of phosphogypsum plaster for use in the building materials sector. A phosphogypsum dump at the plant is expected to be utilised by 2025.


Oman: The Salalah Free Zone (SFZ) has signed three agreements worth US$80m to build three plants in the area, including two gypsum wallboard plants. The other factory will produce solar panels, according to the Times of Oman newspaper. The plants will be run by foreign companies including one from the US. They will create over 250 jobs.


US: Eagle Materials’ revenue from its gypsum wallboard business fell by 11% year-on-year to US$127m in the first quarter of its financial year to 30 June 2019 from US$142m in the same period in 2018. Its earnings dropped by 25% to US$37.9m from US$50.5m. Wallboard sales volumes decreased by 7% to 61Mm2 from 66Mm2. It attributed the loss of revenue on lower volumes and poor pricing although it said that buying activity around a price increase in July 2019 suggested that the market was ‘healthy.’


US: China National Building Material Company (CNBM) has proposed paying US$248m in one of its on-going legal cases related to alleged defective gypsum wallboard sold by Taishan Gypsum. This latest settlement agreement covers plaintiffs not previously covered by the Amorin Case, those in the Brooke Case and all other property owners with Chinese gypsum board alleged to be attributed to Taishan and connected partners. The settlement is dependent on all parties signing the agreement.


Spain: Saint-Gobain Placo’s gypsum wallboard board plant at San Martin de la Vega near Madrid has been awarded bronze status in the World Class Manufacturing program. The plant is the first Saint-Gobain unit in the world to achieve the certification. The scheme is intended to train individuals to assess operational excellence, as well as improve employee morale, individual and company performance, and company profits.


France: Saint-Gobain’s sales rose by 4.3% year-on-year to Euro21.7bn in the first half of 2019 from Euro20.8bn in the same period in 2018. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) grew by 8.4% to Euro2.42bn from Euro2.23bn. Growth was reported for its gypsum business in all territories apart from North America. Particular growth was noted in its Asia-Pacific region.


Switzerland: Sika’s net sales grew by 7.6% year-on-year to Euro3.38bn in the first half of 2019 from Euro3.14bn in the same period in 2018. Its operating earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 14.5% to Euro565m from Euro493m. The building chemicals producer noted that its takeover in the reporting period of Parex, a globally leading producer of facade mortar, technical mortar, tile adhesives, and waterproofing systems, was the largest acquisition in its history.


US: The Bureau of Land Management is seeking public comment on a proposed expansion of a USG gypsum quarry and associated water lines in Imperial County, California. USG wants to replace an existing water supply line to its Plaster City gypsum wallboard plant. The project will cost US$110m. The comment period will last until early September 2019.


India: Bharat Heavy Electricals (BHE) has been awarded the contract to supply emissions control systems, including a flue gas desulphurisation (FGD) system, at the Nabinagar Thermal Power Project. The project is a 4x250MW coal-fired power station being built by Bhartiya Rail Bijlee Company, a joint venture between NTPC and Indian Railways. BHE's scope of work includes design, engineering, civil works, supply, erection and commissioning of wet FGD system along with auxiliaries, including limestone and gypsum handling system and wet stack on a full engineering, procurement and construction basis.

Previously BHE installed a FGD system at Tata Power's Trombay Unit 8 in 2008. Including the latest order, BHE is presently executing FGD systems for 27 units of NTPC and its joint ventures.


France: Saint-Gobain has appointed Maud Thuaudet as Vice-President, Corporate Strategy with effect from 3 September 2019. She succeeds Julie Bonamy, who is appointed chief executive officer (CEO) Indonesia, Malaysia and Singapore. Thuaudet will report to Sreedhar N, Saint-Gobain’s chief financial officer (CFO) and will be a member of the group’s executive committee.

Thuaudet is currently Telecommunications Program Director at Thales Alenia Space, within the Thales Group, where she started her career in 2006. She was Project Manager for Thales International in India, Bid manager, then Business Development Manager for Thales Air System, before being appointed Merger and Acquisitions Manager for Thales Alenia Space. She is a graduate of École Polytechnique and a member of the Corps des Ponts et Chaussées. She also holds an MBA from the INSEAD business school.


UK: Associated British Ports (ABP) has proposed the construction of a new gypsum wallboard plant at the Port of Newport. The project is at the planning stage with the submission of an environmental impact report to the local government. The 14,000m3 unit will be built on brownfield land south west of the port’s South Dock. It will include a simple warehouse-type structure enclosing production lines, conveyor belts, storage loading areas and two hoppers. No cost for the project has been disclosed.

Gypsum for the production line will be delivered by ship and unloaded into a quayside storage facility. Plasterboard products will be distributed from the proposed plant mainly by road although export markets by sea could be possible. It is anticipated that around 70 jobs would be created by the plant.


India: NTPC says it plans to install flue-gas desulphurisation (FGD) units at all of its power stations. The state-owned power producer commissioned the country's first FGD unit at the 500MW unit number 13 (stage V) unit at its 4760MW Vindhyachal power plant in 2017 for a cost of around US$30m, according to the Press Trust of India. 1275t and 1515t of synthetic gypsum from the unit has been supplied to ACC and JP Cement respectively since the unit was started.

"With an aim to embrace sustainable practices to produce power with minimum emissions, NTPC is implementing this technology across its power plants. At present, the adoption of this technology is currently at various stages of implementation for 65.35GW of group capacity in 38 locations, which also includes upcoming projects," the state-owned power producer said.

Earlier in July 2019 GE Power India said it had has won three FGD projects from NTPC at the Simhadri Super Thermal Power Station, the Sipat Super Thermal Power Station and the Aravali Power Company plant, IGSTPP Jhajjar.


Norway: New West Gipsgjenvinning, a joint venture between Norsk Gjenvinning and Canada’s New West Gypsum Recycling, has won the innovation prize at Avfall Norge’s annual conference. It was among three finalists including Grønt Skifte, a company utilising CO2 from biogas production of food waste to grow tomatoes, and Waste IQ, a digital platform that aids waste management. Avfall Norge is a trade association for the waste industry in Norway.


Australia: BGC Australia is considering selling its gypsum wallboard and fibre cement businesses. Roger Brynjulfsen, the general manager of BGC Plasterboard, told customers in a letter that the company's board of directors had brought forward plans for a possible sale of BGC Fibre Cement and BGC Plasterboard, with evaluations under way, according to the Business News newspaper. The company wants to sell both businesses as going concerns with the new owner to continue to supply plasterboard and fibre cement to BGC's existing customers. It is also considering selling parts of the business or changing its operating model.

BGC previously tried to sell its building materials subsidiaries in 2018. However, it deferred the sale in February2019 due to poor market conditions. It appointed a new chief executive officer (CEO), Daniel Cooper, in late June 2019.


India: GE Power India has won three wet flue gas desulphurisation (FGD) projects. A contract worth US$335m covers the supply and installation of FGD systems at two NTPC coal power plants, the Simhadri Super Thermal Power Station and the Sipat Super Thermal Power Station, and one Aravali Power Company plant, IGSTPP Jhajjar.

GE’s scope includes design, engineering, civil work, supply, erection and commissioning of Wet FGD systems along with auxiliaries, including limestone and gypsum handling systems and wet stack on full turnkey basis. In addition, GE’s scope for IGSTPP Jhajjar also includes 10 years of operation and maintenance including the supply of spare parts.

With these three wet FGD projects together, GE will help NTPC to treat 35Mm3/hr of flue gas and will remove up to 0.11Mt/yr of SO2, which will be converted into gypsum by-product for use in the construction industry.


Spain: Alberto De Luca, the chief executive officer (CEO) of Knauf Spain and Portugal, has been appointed as the president of the gypsum technical and business association (ATEDY). The association represents gypsum and plaster product manufacturers in Spain and Portugal.

De Luca has been the general director of Knauf Spain and Portugal for four years. The Italian national studied in Brussels, Belgium and joined Knauf Group in 2002. He held the postion of general director of Knauf Insulation for Spain, Portugal, Italy and North Africa for over eight years.


US: Continuus Material Recovery has acquired ReWall, a company that manufactures building products from recycled materials. Continuus uses consumer and industrial paper and plastic waste to produce building material boards for exterior walls and commercial roofs. Its Everboard product uses a plastic and cellulose core.

“With this acquisition we can accelerate waste reduction opportunities through low cost, easily implementable solutions and generate a universal sustainable raw material for a multitude of new products. Design and engineering is underway for an even larger facility where we will be producing hundreds of millions of board feet of building materials, and then we’ll move into other areas,” said Carl Rush, the chief executive officer (CEO) of Continuus Material Recovery.


US: Eagle Materials has approved a plan to spin off its heavy materials and light materials businesses into two publicly traded entities, bowing to pressure from hedge fund Sachem Head Capital Management.

Sachem, which disclosed a 9% stake in Eagle Materials in March 2019, had earlier urged Eagle to separate its cement and wallboard businesses. After the split, Eagle’s heavy materials business will operate as a cement company, and the light materials business will continue to make gypsum wallboard and recycled paperboard.

“We believe that by pursuing the actions announced today the Eagle board is taking significant steps to unlock the company’s inherent value,” said Sachem Managing Partner Scott Ferguson, also commenting on planned changes to Eagle’s oil and gas proppants businesses.

The separation will be by a tax-free spin-off to Eagle shareholders and is expected to be completed in the first half of 2020. Both the new companies will have their headquarters in Dallas, Texas.