Global Gypsum Newsletter

Issue: GGM57 / 12 December 2023

Headlines


Securing sustainable energy sources has been the priority for some of Spain’s gypsum wallboard producers in recent weeks.

In late November 2023 Pladur revealed that it plans to use green hydrogen at its production plants from the second half of 2024 onwards. It will start at its Valdemoro plant near Madrid before rolling usage out elsewhere afterwards. The subsidiary of Belgium-based Etex is also considering trials with biomethane and biogas. Then a few weeks later in early December 2023 Knauf Ibérica announced that it is planning to build a 7.5MW biomass unit at its Guixers plant in Lleida. Commissioning is currently scheduled for late 2024. This follows the installation of solar panels at the site earlier in 2023. Along similar lines, Saint-Gobain Placo signed an 11-year power purchase agreement (PPA) with electricity company Endesa at the end of 2022 to supply 150GWh/yr of renewable energy. Together with a previous renewable energy deal this was expected to cover up to 65% of the group’s electricity requirements in Spain.

Wallboard plants all over the world have been embarking on sustainable energy drives in recent years but the particular drivers in Spain are worth mentioning. The country’s high electricity prices have frequently been raised by large-scale industrial users in the past, often in terms of competitiveness of exports. However, the situation worsened following the start of the war in Ukraine in early 2022 as the wholesale price of coal and gas jumped. The high price of gas in particular pushed the electricity prices up in Spain and wallboard plants typically use both sources of energy. The government eventually capped the price of gas and coal for power generation. It then offered an aid scheme for large-scale gas users but missed the gypsum sector out, much to the chagrin of the Asociación Técnica y Empresarial del Yeso (ATEDY), which complained about it at the end of 2022. The gypsum industry was later included in July 2023 when a funding scheme was announced. It’s unknown how much this initiative has helped wallboard manufacturers but the shift to renewables by the three main companies mentioned above tells its own story.

Despite the energy supply problems a new entrant to the wallboard market in Spain announced itself in March 2023. Italy-based Fassa Bortolo said it was going to spend Euro90m on building a wallboard plant at Tarancón in Cuenca. No commissioning date or main supplier name has been disclosed, but Italy-based Bedeschi did say in late November 2023 that it was providing raw bulk material handling equipment including an apron feeder, stacker, excavator and conveyor belt line. There has also been no word on how the new plant will power itself.

On the topic of exports, Spain has long been one of the world’s larger shippers of natural gypsum. Data from the Geological and Mining Institute of Spain (IGME) shows that the country exported 9.2Mt of gypsum in 2021 with a value of Euro60m. Whether this changed in 2022 when the energy prices increased is unknown at the time of writing. In 2021 Almería was the epicentre of the country, accounting for 70% of the 13Mt total volume of gypsum extracted that year with a quarry at Sorbas, operated by Saint-Gobain Placo, reportedly being the second largest in the world. Most of the gypsum extracted at Sorbas was then driven by truck to the Port of Garrucha, making it the busiest gypsum port in Europe by volume.

Eurogypsum, the European federation of national associations of producers of gypsum products, launched its industry roadmap to net-zero by 2050 on 9 November 2023 at the Global Gypsum Conference 2023, which took place in Chicago, US. Various actions and technologies were unveiled as part of the plan including some of the approaches being taken in Spain such as using ‘green’ electricity, biomass and green hydrogen. All of these suggestions were split into short, mid and final term feasibility categories. So, for example, using renewable sourced electricity is dependent on it being affordable and available. It was placed in the immediate category. Yet, using biofuels or green hydrogen is flagged as requiring investment, so deemed as short-to-mid term.

Spain presents a case where the cost of energy for industrial users may be aligning with sustainability goals. How this translates onto balance sheets remains to be seen though. These kinds of sustainable energy projects may only be slowing the inevitable as raw material and energy costs mount anyway leading to tighter margins, increased competition and potential consolidation. The gypsum sector in Spain may well be testing out slightly earlier than elsewhere how much a more sustainable world will actually cost.


Philippines/Thailand: The Philippines Department of Trade and Industry (DTI) has launched an investigation into imports of Thai gypsum wallboard. The investigation forms the first stage in the process of potentially implementing a tariff on gypsum wallboard entering the Philippines from Thailand. The investigation will seek to establish whether dumping of the product occurred between January and May 2023, and whether the wallboard industry of the Philippines experienced any injury due to imports from Thailand between 2019 and 2022. The Philippine Star newspaper has reported that the DTI accepted an application for an investigation from Knauf Gypsum Philippines on 24 November 2023.

The DTI preliminarily stated that “There was a substantial margin of dumping of gypsum board from Thailand for the period January to December 2022 based on the domestic wholesale and export prices as gathered by the gypsum board industry.” It added “Based on the aforementioned, there is a prima facie evidence that the domestic industry suffered material injury before the acquisition efforts as evidenced by the low market share of the domestic industry ranging from 23% to 40%, operating losses and price suppression from 2019 to 2021 and price undercutting in 2021.”


Spain: Knauf Ibérica is planning to build a 7.5MW biomass unit at its Guixers gypsum wallboard plant in Lleida. The unit will be operational by December 2024 and create around 200 jobs, according to La Vanguardia newspaper. The company intends to source wood biomass locally. Once operational it is expected to reduce the plant’s CO2 emissions by 35%. The Guixers plant also installed photovoltaic solar panels earlier in 2023.

Alberto De Luca, chief executive officer of Knauf Ibérica, said “The launch of this project is a significant step towards reducing our carbon footprint and achieving zero emissions by 2045."


Spain: Pladur plans to start using green hydrogen at its Valdemoro gypsum wallboard plant from the second half of 2024. The subsidiary of Etex will then roll out the use of hydrogen at its other plants in the country, according to Forbes. It is also considering using biomethane and biogas generated from organic waste in its production processes.


Colombia: The Agência Nacional de Mineração (ANM) has included gypsum on a list of 17 strategic minerals that it considers key to helping the country develop. In addition to gypsum the list includes: copper; nickel; zinc; platinum; iron; manganese; metallurgical coal; phosphates; magnesium; bauxite; gold; emeralds; construction materials such as sands, gravels and clays; silica; limestone and chromium. It also includes various associated ores, concentrates and derivatives of the minerals on the list.

The Ministry of Mines and Energy originally compiled a list of strategic minerals in 2012 and the ANM has continued this since the start of 2023. By declaring certain minerals as ‘strategic’ the central government will have the power to reserve and delimit special areas with high mining potential that are free, in order to grant them to third parties through selection processes or other allocation schemes.


India: Saint-Gobain Gyproc has launched a range of products including gypsum wallboards. The new product line includes 'Habito Standard' a gypsum wallboard made for heavy unplanned and planned loading applications, 'Rigiroc,' a multi-purpose moisture resistant board and 'Glasroc X,' a wallboard for exterior applications. Saint-Gobain Gyproc also released a ceiling tile product at the same time.

Najwa Khoury, Global Gypsum Strategy Director at parent company Saint-Gobain, said "Saint-Gobain Gyproc continues to be committed to meeting the demands of the changing preferences and environmental conditions in India. Over the last few years, we have seen a growing acceptance of drywall and modern ceiling tiles in India, and we want to stay ahead of the curve. We are delighted to introduce a new range of innovative products that are functionally superior, sustainable, affordable and customizable, redefining the future of construction.”

The products will be available in India and neighbouring countries including Nepal, Bangladesh, Sri Lanka and the Maldives.


France: Saint-Gobain’s chief executive officer (CEO) will also become the company’s chair after the next general shareholders meeting in June 2024. He will succeed Pierre-André de Chalendar in the role, who is preparing to retire. Independent director Jean-Francois Cirelli will also be appointed as vice-chair at the meeting.

The France-based company said that its board of directors have been working since 2021 to enhance the effectiveness of the group's governance and the independence of the board by restructuring the balance of power within it. A Lead Independent Director will also be appointed in June 2024 with additional powers and the proportion of independent directors on the board will be increased, subject to a vote.


Philippines: The government has cut the import duty on natural gypsum and anhydrite to zero from 3% previously in a bid to help the local wallboard and cement sectors. It is also expected to support housing and infrastructure projects in the country, according to the Philippines News Agency. Executive Order (EO) No. 46 was signed in early November 2023, approving the change in duty that was due to come into effect a month later in early December 2023.

The EO stated "At present, there are no operating mines of natural gypsum and anhydrite in the country, and there are also no local substitute for said products that are available for domestic producers of plasterboards and cement." The tariff rate is intended to last for five years but it will be reviewed annually at the end of 2024.


Ukraine: The National Agency on Corruption Prevention (NACP) has added Germany-based Knauf to its list of “international sponsors of war” due to the company’s continued business in Russia. The government agency alleges that Knauf paid around US$117m in taxes to the Russian government in 2022. It noted that the company operates 10 subsidiaries, 20 production plants and nearly 30 resource centres in the country. It added that Nikolaus Wilhelm Knauf, a partner in Knauf Gips, had been a longstanding Honorary Consul of the Russian Federation until the start of the Russian-Ukrainian war in early 2022.

In March 2022 Jörg Schanow, a member of the management board of Knauf, told a German newspaper that the company had no plans to leave the Russian market.


Spain: Bulk materials handling equipment supplier Bedeschi says that it has won a contract with fellow Italy-based company Fassa Bortolo to equip a planned gypsum stacking plant in Spain. The plant will homogenise gypsum for storage in an 8000m3 storage pit at a Fassa Bortolo quarry. Bedeschi says that the central part of the order is composed of a 300t/hr metallic apron feeder and stacker car, a 150t/hr excavator belt and a fully enclosed conveyor belt line. The supplier noted that it previously executed a ‘very similar’ order for Fassa Bortolo once before.


UK: Knauf UK and Ireland has announced the launch of a new gypsum wallboard recycling service in partnership with waste management company Encore Environment. The partners will trial the service at contractor Manchester Design and Build’s renovation of the Piccadilly Warehouse in Manchester.

Knauf UK and Ireland national client development manager Jon Watts said “The existing Sittingbourne recycling plant and service is fantastic. However, with this partnership we’re able to really tap into on-site recycling and ensure as much goes back into the supply chain as possible. This is critical, as we don’t want plasterboard being transported all over the country. It’s broken down locally and then gets distributed back to plasterboard manufacturers.”


Saudi Arabia: Canada-based Gyptech has won a contract to carry out an expansion project at a gypsum wallboard plant belonging to United Mining Industries. The project is scheduled to conclude 18 months after its commencement date. Reuters has reported the value of the contract as Euro12.3m.


Europe/US: Tristan Suffys, secretary general of Eurogypsum, the European gypsum association, presented the association’s net zero roadmap at the Global Gypsum Conference 2023 in Chicago, US, on 9 November 2023. Live and online audiences heard Eurogypsum’s full life cycle-based carbon footprint analysis, according to which European gypsum wallboard currently generates CO2 emissions of 2kg/m2, 14% lower than 2008 levels. On its pathway to net zero by a deadline of 2050, Eurogypsum plans to reduce wallboard’s CO2 emissions from raw materials by 13%, from transport by 12%, from production by 69% and from end-of-life processes by 6%.

Suffys said “Presenting our roadmap today in Chicago is a clear signal that global warming requires global action. We want to engage with other regional actors along the way to climate neutrality.”

Eurogypsum president Jörg Ertle added “We are committed to making this transition a reality. First examples show that we can move towards net-zero emission production if we have access to low-carbon energy at affordable costs and optimal raw material supply, but this will require significant investment from our sector.”


France: Saint-Gobain says that its like-for-like sales were stable year-on-year during the first nine months of 2023. In real terms its sales were Euro36.5bn during the first nine months of 2023, down by 4.9% year-on-year from the corresponding period in 2022. The group partly attributed this to comparison effects from its previous divestment of assets, including its distribution division, and negative currency exchange effects. Across its businesses, Saint-Gobain’s volumes dropped by 5.9%. Geographically, a ‘resilient’ renovation market offset a slowdown in new construction projects to raise sales in Southern Europe, Middle East and Africa by 1% year-on-year, but failed to do so in Northern Europe, where sales dropped by 5%. Sales fell by 5.5% in Latin America, as Brazil experienced the impacts of macroeconomic difficulties, but rose by 5% in North America. Across the Asia-Pacific region, organic sales growth was 5.1%.

Saint-Gobain said “In a difficult macroeconomic environment, the group continued to outperform its markets thanks to the pertinence of its strategic positioning at the heart of energy and decarbonisation challenges and to the strength of its local organisation by country, which enables it to offer comprehensive solutions to its customers.” It added “The group continues to focus on developing sustainable and innovative solutions with a positive impact, supported by strong innovation and investments for growth.”