Gypsum industry news

Europe: USG has entered into a definitive agreement for the sale of its interest in Knauf-USG Verwaltungs GmbH and Knauf/USG Systems GmbH and Co KG to Knauf Aquapanel GmbH for approximately Euro48m in cash.

The Knauf-USG joint venture manufactures and distributes Aquapanel brand cement panels throughout Europe (excluding Turkey) and all countries that were part of the former Soviet Union.

USG's equity method income in the Knauf-USG joint venture amounted to Euro1.79m for the year that ended on 31 December 2014. Upon the close of the transaction, USG anticipates recording a Euro2.68 – 6.26m gain. The closing of the sale is subject to the receipt of necessary governmental approvals and other customary closing conditions and is expected to take place by the end of 2015.

US: Lone Star Funds has agreed to sell 4 million shares of common stock in Continental Building Products (CBP) through an underwritten secondary offering. Based on the closing price of CBP's common stock on 9 September 2015, the offering is valued at approximately US$85.2m. The underwriter has a 30-day option to purchase up to an additional 600,000 shares of common stock from the selling stockholder. Credit Suisse Securities (USA) LLC is acting as the underwriter for the offering, which is expected to close on 16 September 2015.

Pakistan: A new gypsum plant is under construction in Karachi, Pakistan, under the name of United Gypsum. The plant will include 100,000t/yr of gypsum powder capacity and 10Mm²/yr of gypsum wallboard capacity. It is expected to start in the middle of 2016.

UK: The Carbon Trust has awarded Knauf UK the Carbon Trust Standard for Carbon in recognition of its success in reducing its carbon emissions. The Carbon Trust is the world's leading independent certification organisation and the award is a step forward for the gypsum industry as a whole.

"We're particularly proud to have achieved the Carbon Trust Standard because it reflects the company's commitment to sustainability throughout its operations," said Lorna Stork, Knauf UK's sustainability manager. "We manufacture products that are energy-intensive to produce, so this achievement not only owes a lot to improvements at factory level, but also shows that we believe in managing carbon and energy use in other areas."

Knauf has re-formulated the composition of its wallboard to reduce water content and the energy consumption required to dry them. The result is that, across the company, the average board weight has fallen by 2% over the past five years, leading to a cut in energy consumption of over 5%. Knauf has also achieved considerable energy savings in the drying process. 10GWh of gas were saved at the company's Kent facility and a further 2.8GWh at its Hull plant. These savings have been reinforced with other initiatives, including the implementation of ISO 50001, energy targets for board production, monitoring programmes and sourcing lower moisture raw materials.

Knauf has also examined other elements of its business in terms of carbon use, including handling and distribution. There have been marked improvements in Knauf's own energy consumption by forklifts and other site vehicles due to monitoring of fuel usage and training staff on how to operate the plant and equipment optimally.

"Knauf's attitude towards carbon reduction is commendable and the company's efforts have led to a significant reduction of over 5%. The company is an example of what can be achieved going beyond business-as-usual and innovating to improve your environmental impact," said Darran Messem, managing director of certification at the Carbon Trust. "Achieving the Carbon Trust Standard is one thing, but keeping it is a constant task, not one that is achieved by a single initiative. As a company, we are committed to that aim and to everything that it implies."

Belarus: Belarusian gypsum wallboard demand will decrease by 12.5 - 17% in 2015, according to OJSC Belgips and FLLC Knauf Marketing, key players in the country. According to the companies' executives, the fall is a consequence of reducing funding of the construction industry and a decline in commercial real estate.

"In 2014, gypsum wallboard consumption in Belarus amounted to about 12Mm². In 2015, we estimate that the consumption will decrease to 10 - 10.5Mm²," said the director of Belgips, Stanislav Babitsky. The director of FLLC Knauf Marketing Alexander Babkin confirmed the 2014 market size at 12Mm² and said that he expects demand in 2015 to fall to 10Mm².

The head of corporate communications of Knauf for the Commonwealth of Independent States (CIS) Leonid Moose said that the main consumer of wallboard in Belarus was the business-to-business (B2B) sector, namely, the commercial real estate market. Out of the total wallboard consumption, the B2B sector had 70%, while the business-to-consumer (B2C) sector had 30%.

"The commercial real estate market is falling, while the population is beginning to save money and invest it in repairs. For this reason, we are observing the fall of consumption of gypsum wallboard and, at the same time, the growth of consumption, in particular, of dry building mixes, whose main consumer is the B2C sector," said Moose. "Meanwhile in Europe, wallboard is being increasingly used for partitions in individual building more than in Belarus."

Meanwhile, the demand for gypsum wallboard from the population has intensified, according to Babitsky. "The consumption of wallboard is increasing due to the growth in framed-monolithic housing in Belarus. During the last two years, the consumption growth was 20%. It smoothes the fall in demand from the commercial sector," said Babitsky. He added that another negative factor on the Belarusian market is the increased competition on the part of Russian players because of the Russian Ruble devaluation and the Russian wallboard market narrowing. Russia's wallboard production is around 600Mm²/yr, while consumption is 250Mm². As such, exports to Belarus have increased.

Belgips plans to develop new products for sale on the domestic and export markets. According to Gubanova, the company is considering entry into Lithuania and Latvia.