Gypsum industry news

Indonesia: Saint-Gobain has inaugurated its first wallboard plant in Indonesia, near Jakarta. With a production capacity of 30Mm², the new plant will enable Saint-Gobain to respond better to local demand and continue the group's growth on the rapidly-growing Indonesian wallboard market. Saint-Gobain has four other plants in south-east Asia, in Malaysia, Thailand and Vietnam.

India/Oman: UltraTech Cement Middle East Investments, a wholly owned subsidiary of India's UltraTech Cement, has acquired a majority stake (51%) in Omani gypsum mining firm Awam Minerals LLC.

Awam Minerals has a license to mine substantial gypsum deposits in the south of Oman. It's gypsum mining license will serve as a captive mine for the network of cement plants owned by UltraTech Cement in India, two grinding units and a cement plant in the UAE, as well as a grinding unit in Bahrain through its Middle East subsidiary.

US: USG has reported US$972m of sales for the third quarter of 2014, up by 5% from the same period in 2013. The company recorded a net loss of US$11m for the period, compared to a profit of US$23m in 2013. For the first nine months of 2014, sales were US$2.8m, a year-on-year increase of 4%. Profit grew by 82% to US$91m.

During the third quarter of 2014, USG reached an agreement in principle to settle all claims made in the direct and indirect purchaser class actions consolidated in the lawsuit, In re: Domestic Wallboard Antitrust Litigation, MDL No. 2437, pending in the United States District Court for the Eastern District of Pennsylvania. Pursuant to the agreement in principle to settle, which is subject to finalisation of a settlement agreement and court approval, USG will make a payment of US$48m. USG strongly denies any wrong-doing for the claims made in the lawsuits, but settled to avoid the expense, distraction and risk of further litigation. USG expects to make this cash payment within the next 12 months, while recording the US$48m charge in the third quarter of 2014.

"It is very disappointing to settle this lawsuit when we strongly believe we have done nothing wrong," said James Metcalf, president and CEO of USG. "However, we have to be realistic about the cost and risk a lawsuit like this creates for USG."

Indonesia: PT Saint-Gobain Construction Products Indonesia (SGCPI), a subsidiary of Saint-Gobain Group, has invested approximately US$45m in the construction of a gypsum wallboard plant within the Cikande industrial estate in Serang, Banten. The 33Mm²/yr capacity plant, which is located on a 60,000m² plot of land, will be officially opened on 28 October 2014 after 18 months of construction.

According to Edward Loy, SGCPI's managing director for Indonesia, Malaysia and Singapore, production will start in November 2014 and the plant is expected to operate at full capacity by the end of 2015. Loy said that the plant was a first for the firm's industrial mortars division in Indonesia, hinting that there would be more investments to come from its glass and abrasives production in the near future.

"We want to position ourselves as strategic investors in Indonesia and we have more investments coming through in the next few years as well," said Loy.

With the opening of the plant, Loy suggested that the company would become more efficient in terms of pricing. "The opening of the plant will allow us to position ourselves as a local player in the market, so even though we started in 2007 with imports, it wasn't competitive. Now we'll have no more freight charges or shipping and handling," said Loy. In spite of his optimism, the regional managing director acknowledged that his firm would need to face the challenge of competing against cheaper, readily available yet unsustainable construction materials like asbestos and sand bricks.

"We can't compete with clay and sand bricks when the labour is still very cheap, but we can make sure the price difference is small and they are not offering the same kind of quality that we are," said Loy. "We'll deliver quality and performance to the homeowner." According to him, three factors will be decisive in driving the adoption of SGCPI's Gyproc brand of gypsum boards in the country; rising labour costs, knowledgeable consumers and the shift toward using green and sustainable construction materials.

Loy said that around 40-45% of the firm's business would be in the residential sector, while the rest of his clients would come from the commercial and public sectors, catering to spaces such as shopping malls, airports and hospitals.

Russia: The Ural-based company Bergauf Building Materials has purchased a production facility in Sterlitamak in the Bashkortostan Republic, Volga, from HeidelbergCement. The deal included a plant producing dry mortars under the brand Bystroy and a gypsum production complex. The price of the assets has not been reported.