Gypsum industry news

Australia: Boral has reported that its half year underlying net profit jumped by 73% on the back of improved housing and road construction markets, cost cutting measures and dry weather conditions. The company saw its underlying net profit rise to US$81.5m in the six months to 31 December 2013. However, the company also warned of a slowdown in activity and earnings in the second half of the financial year, which runs until 30 June 2014.

Boral actually recorded a net loss of US$23.6m for the half year but this figure includes US$106m in one-off accounting charges related to its gypsum plasterboard joint venture, due to be completed on 28 February 2014, which it says will be offset by gains in the second half.

Chief executive Mike Kane highlighted a US$20.8m turnaround in the Australian building products division and a 6% lift in its largest division, building materials and cement.

"The rise was driven by strong project activity, very dry weather conditions in New South Wales and Queensland and the benefit of restructuring and overhead cost reduction initiatives," said Kane. "Despite expected underlying performance improvements, there will be a skew of earnings to the first half compared to the second half due to higher major project volumes, dry weather conditions in the first half and the impact of the gypsum joint venture."

The company achieved US$54.7m in cost savings, much of which came from cutting 1000 jobs. Boral plans to use much of a US$453m payment from its gypsum partner USG to reduce its US$1.26bn net debt.

US: USG Corporation has reported fourth quarter 2013 net sales of US$915m, up by 12% from fourth quarter 2012 net sales of US$815m. USG's fourth quarter 2013 operating profit was US$60m compared to an US$8m operating loss in the fourth quarter of 2012. USG's fourth quarter 2013 net loss was US$3m, compared to a US$13m net loss in the same period of 2012.

USG's adjusted net income was US$22m in the fourth quarter of 2013 compared to an adjusted net loss of US$52m in the fourth quarter of 2012. The adjusted net loss in the fourth quarter of 2013 excluded, among other items, a US$16m pension settlement charge related to a lump-sum payout to terminated employees that lowered the pension obligation by approximately US$80m. The adjusted net loss in the fourth quarter of 2012 excluded, among other items, a US$55m gain from the sale of the corporation's European operations.

"We're pleased to have delivered a fourth consecutive quarter of positive operating results with improved performances in all major businesses," said James S Metcalf, chairman, president and CEO. "Our plan to win is working and we expect to improve upon our results as we capitalise on the increasing opportunity in our end markets."

USG recorded full year 2013 net sales of US$3.6bn, an operating profit of US$258m and a net income of US$47m, with an adjusted net income of US$73m. For the full year of 2012, net sales were US$3.2bn, operating profit was US$73m and net loss was US$126m, with an adjusted net loss of US$124m.

"2013 was a foundational year for USG, however our work is not done," Metcalf said. "We remain committed to keeping our breakeven low and delivering our balance sheet, while seeking organic growth opportunities as we build the USG of the future."

India: In a campaign against illegal mining, local police seized 2500t of gypsum from Dantoor in Bikaner district, Jaipur, on 5 February 2014.

Mining equipment was seized and 15 cases have been registered. On the third day of the campaign, a team was prepared to claim gypsum from a plaster of paris manufacturing unit in Bikaner region. The owner was not able to provide the purchase vouchers or state the source of the gypsum. "We received the information and a team was sent. The Bikaner region has a lot of gypsum that, at times, reaches the plants illegally," said Rohit Mahajan, deputy inspector general of vigilance (mining).

The police have registered eight cases in Jhunjhunu and five cases in Nagaur. Officials asserted that due to fear of action against them during the campaign, several illegal mining mafias have stopped their activities. However, they agreed that more such efforts are needed to curb it completely.

"At several places, the mineral can be found on the layer of soils. To extract it, there is no need for sophisticated equipment. Stopping illegal mining activities in these areas is difficult, but certainly the campaign has struck fear among the mafias," added Mahajan.

Police claim that instead of fining the culprits, cases have been registered against them. If they are found to be involved in illegal mining again, stricter action may be taken.

Brazil: Knauf plans to set up a plant in Camaçari, Bahia with an investment of US$61.5m. Commissioning is due in 2014. The plant will produce gypsum products and the metallic structures for construction systems. It will be the second such plant in Brazil after the first in Queimados, Rio de Janeiro. Knauf's total capacity in Brazil will grow from 24 Mm² to 44Mm² of gypsum products.

Australia/US: USG Corporation has announced that it and Boral Limited continue to progress toward completion of their 50/50 strategic joint venture. While completion was originally anticipated to occur by 31 January 2014, it is now expected to occur on or before 28 February 2014, due to additional time being necessary to obtain regulatory approvals.