Gypsum industry news

Romania: Siniat Romania, part of Belgium's Etex, will close its plant in Bucharest and quarry in Nucsoara in February 2016 in order to concentrate production at its recently-opened Turceni plant.

The decision was taken because Turceni has a better geographic proximity to the company's sales markets in south-east Europe, according to General Manager Marc-Andre Fritsche. The Turceni plant was opened in October 2015 in Gorj, south-west Romania, with an investment of Euro50m. It will incorporate the company's wallboard production activity and extend the portfolio with more complex products.

Siniat Romania has another plant in Aghiresu, Cluj. It posted a Euro25.8m turnover in 2014 and a loss of Euro1.15m.

US: Gypsum Management and Supply, Inc. (GMS), a leading North American distributor of wallboard, suspended ceiling systems and other specialty building products, has acquired Badgerland Supply and its six locations in Wisconsin and Illinois.

Badgerland has served the Wisconsin and Northern Illinois markets for over 25 years through its diverse offering of high-quality wallboard and construction products. Badgerland has an established market presence with a strong customer base primarily in the remodeling, residential, commercial and institutional sectors.

"We are pleased to have Badgerland Supply join our growing network of GMS companies," said Jerry Speights, Vice President of the Central Division of GMS. "Its longstanding presence in these dynamic Midwest regions, paired with its employees' in-depth knowledge of the local markets, makes Badgerland Supply an invaluable addition to the GMS family."

Thailand: SCG-Dow Chemical does not plan to shut its 200,000t/yr styrene monomer (SM) and 300,000t/yr polystyrene (PS) plants in 2016 for maintenance, according to an unnamed company source. The facilities in Map Ta Phut were shut in the first half of 2015 for a turnaround. SCG-Dow Group is a joint venture between Thailand's Siam Cement Group (SCG) and US' Dow Chemical.

Australasia: LafargeHolcim has said that, despite what has been reported recently in the media, its Australian and New Zealand operations are not for sale.

LafargeHolcim recently announced a plan to divest almost US$5bn of assets in 2016 after posting unexpectedly weak third-quarter results. Speculation had emerged that it might exit from the Australasia region.

However, according to local media, an internal email sent to staff on 30 November 2015, Holcim Australia Chief Executive Mark Campbell said the company was 'not currently being sold,' but could not rule out an exit in the long term.

"I have checked whether the LafargeHolcim group had made a decision to sell the businesses in Australia and New Zealand and started a sale process without my knowledge and the answer I have received is 'no,'" said Campbell. "That said, organisations change focus over time and it is impossible to say that we will always be part of the LafargeHolcim group."

Australian-listed rivals, including Boral, Fletcher Building and Adelaide Brighton, are seen as potential acquirers, should the multinational giant choose to sell off its local arm. Ireland's CRH may also be interested. However, Morgan Stanley said that many of LafargeHolcim's local competitors might run into competition issues, given that the market is concentrated among several large players. "Should Adelaide Brighton fully participate, we cannot rule out that the 50% share in Cement Australia would be divested due to Australian regulations, given Adelaide Brighton's already strong share in cement," said Morgan Stanley Analyst James Rutledge. "While we think Fletcher Building is unlikely to be in a position to participate in industry consolidation, a change in owner that was less integrated into the region may be a positive for Fletcher Building at the margin," said Rutledge. "Given Boral's strong share in aggregates and the concrete market, we believe it will be difficult to participate in industry consolidation."

While Lafarge has a limited local presence in Australia and New Zealand, Holcim bought a string of Australian assets from Mexico's Cemex in 2009 for US$2bn and now boasts more than 350 sites nationwide.

Australasia: LafargeHolcim is believed to be considering an exit from Australia and New Zealand, with the region under the spotlight as part of a strategic review globally of non-core assets. It is understood that a private equity firm has already made an approach for some assets, amid a period of global consolidation in the industry.

Lafarge sold its Australian gypsum operations four years ago for US$127m to Knauf, but Holcim has remained one of the most dominant suppliers in the Australian and New Zealand market of aggregates, concrete and concrete pipe and products. While the division is likely to be too large for Boral, it may pursue parts of the business or partner with another buyer to secure some of the LafargeHolcim assets. However, it is believed that the most likely acquirers include CRH and Votorantim.

Australia's construction industry has been enjoying strong conditions on the back of a recent boom in residential house prices in Melbourne and Sydney. Brickworks, the country's largest brick and tile maker, recently flagged a lift in its earnings for the 2016 financial year on the back of the strong momentum in its building products group.