Gypsum industry news

New Zealand: The New Zealand government is considering cutting import duties on home building materials to help reduce rising house prices in the country.

"Building material costs are too high and can be as much as 30% more in New Zealand than in Australia according to the Productivity Commission. The industry needs a shake-up through increased competition and greater transparency to ensure kiwi families can get access to more fairly priced building materials and homes," said Housing Minister Nick Smith in a statement.

Smith and Commerce Minister Craig Foss released an options paper outlining possible measures to curb the cost of house construction. The paper said that 19% of the output of the home construction industry was made up of imported content. Tariffs notionally still applied to most items used in housing construction, such as wallboard, insulation, timber products, steel and aluminum joinery, particle board and roofing materials, but adjusted tariffs - the duty as a percentage of the value - were small and diminishing due to free trade agreements. Submissions to the options paper close on 18 December 2013.

New Zealand has imposed anti-dumping duties on imports of plasterboard from Thailand since 2011, wire nails from China since 2011 and reinforcing steel bar and coil from Thailand since 2004.

US/UK: The gypsum market is forecast to grow at a compound annual growth rate (CAGR) of 9.9% to reach approximately US$2.4bn by 2018, and US$3.8bn by 2023, according to a new report by analysts Smithers Apex. 'The Future of Gypsum: Market Forecasts to 2023' reports that 252Mt of gypsum is expected to be consumed in the year 2013, with 31.9% and 62.5% being consumed in the plasterboard and cement industries respectively.

The market study reports that about 75% of gypsum is used in wallboard manufacture in the US and Western Europe. Outside of these regions, Smithers Apex reports that one of the major factors driving gypsum consumption is population growth, particularly in India and China, as developing countries move from traditional wet construction techniques towards dry construction using materials such as prefabricated wallboard. Countries such as China are also encouraging wallboard usage through government policies.

The report also describes how a large portion of the world's gypsum is produced from a very large number of small operations in developing countries. For example, there are as many as 400 mines in Iran and probably more in China. The US ranks fifth globally in raw gypsum production after China, Iran, Iraq and Spain. US crude gypsum production in 2012 grew by 11% to 10.4Mt. In 2012, 10.7Mt of this gypsum was synthetic, and 11Mt was calcined gypsum.

The global financial crisis saw demand for gypsum drop in the construction industry by around 20% in 2008. The decline slowed between 2002 and 2010 and stabilised in 2011. The US and other parts of the world saw a strong recovery period in 2012. The most likely path forward for the US construction industry will be a relatively steady one, that features moderate recovery through 2013 and accelerates in 2014 and beyond.

US: Eagle Materials has reported financial results for the second quarter of fiscal 2014, which ended 30 September 2013. Total revenues were up by 53% to US$252.6m. Earnings before interest and income taxes (EBIT) were US$63.5m, an increase of 114% compared to the same quarter of the prior fiscal year.

Sales volumes were improved across all lines, with gypsum wallboard sales volumes of 51.5Mm², an 11% increase from Q2 of fiscal 2013. This provided earnings of US$36.8m, a 52% increase from the same quarter of fiscal 2013. The earnings increase resulted primarily from the increased average net gypsum board sales prices, which were 21% higher.

New Zealand: Canterbury Earthquake Recovery Minister Gerry Brownlee has officially opened a distribution centre for Knauf Plasterboard in Christchurch. Kanuf's distribution centres in Christchurch and Auckland consists of a 5000m² warehouse, showrooms and offices.

"Knauf Plasterboard is a competitive supplier to be reckoned with having significant scale and resource to enter a dominated market. An impressive worldwide operation, with two manufacturing facilities on Australia's eastern seaboard and superior technical expertise, puts Knauf Plasterboard in a strong position to service the growing needs of New Zealand's housing and commercial market," said Mark Norris, Managing Director, Knauf Plasterboard, Australia & New Zealand.

Norris also revealed that Knauf's rollout plans will include a network of independently-owned PlastaLink Trade Centres to sell Knauf products across New Zealand. The company was selected as a partner for the New Zealand government to rebuild Christchurch in January 2013 following the earthquake in 2011.

US/Australia: Boral and USG Corporation have entered into agreements to form a US$1.6bn joint venture producing wallboard in 12 countries across Asia, Australasia and the Middle East. Boral will contribute its Gypsum division to the joint venture, which includes its plasterboard operations in Australia and Asia. USG will contribute its Asian and Middle Eastern businesses, as well as exclusive access to its ceilings, cement board, fibre board, lightweight plasterboard and joint compound building products technologies in the joint venture's territory.

"The transaction is a major step forward for Boral and our vision is to create a world-leading interior linings business in Asia, Australasia and the Middle East," said Boral's CEO & Managing Director, Mike Kane.

The joint venture will be owned 50% by Boral and 50% by USG. In order to achieve an interest of 50% in the joint venture, USG will pay Boral up to US$575m in tranches. It will have a wallboard production capacity of 633Mm²/yr. The joint venture is expected to be completed by January 2014.

Management of the joint venture will be shared between Boral and USG with Frederic de Rougemont from Boral Gypsum who is appointed as CEO and Paul Monzella from USG Corporation who is appointed as CFO. USG will appoint the Chairman, Jennifer Scanlon, with the right to appoint chairman alternating between USG and Boral every two years.