Gypsum industry news

France: Sales across the whole of the Saint-Gobain group in the first quarter of 2011 came to Euro9.799bn, an increase of 12.2% year-on-year. Organic growth of 8.8% was seen in France across all operations and in western Europe (excluding France) the figure was 10.2%. The figures for North America and emerging markets (Asia, eastern Europe and Latin America) were 4.2% and 15.6% respectively.

In the Construction Products division, which includes gypusm wallboard and insulation, sales were up by 6.4% to Euro2.658bn. Saint-Gobain attributed the increases to improved trading conditions across the whole of Europe and continuing strong momentum in Asian markets. The results were tempered by poor trading conditions in the US.

The group's sub-section Interior Solutions grew by 8.4% year-on-year, primarily due to an upturn in western Europe and more favourable winter weather conditions than 2010 that allowed more construction work to take place.

Saint-Gobain's targets for the remainder of 2011 are to have double-digit operating growth across all operations and achieve Euro1.3bn free cash flow after spending Euro500m on capital expenditure.

US: National Gypsum Company has announced that the plaintiff in Yee versus National Gypsum, et al. (pending in the US District Court for the District of Arizona) voluntarily dismissed his putative nationwide class action lawsuit filed against the company in October 2009.

"While we are pleased with the outcome of this case, we are hardly surprised. Throughout this litigation, we have never doubted the quality and safety of our gypsum wallboard and were confident we would be fully exonerated," said Craig Weisbruch, senior vice president of sales and marketing. "Our wallboard has passed the industry's most rigorous testing and certification processes for indoor air quality and has been used by the US Environmental Protection Agency (EPA) and the US Green Building Council in their buildings."

The putative class action, (Raymond) Yee versus National Gypsum, et al., alleged that the company manufactured defective wallboard that emitted high levels of sulphur, damaged property inside homes and caused health problems. These problems have typically been associated with allegedy defective Chinese wallboard and not US wallboard. National Gypsum vigorously defended itself against the claims and denied all allegations. The plaintiff did not produce any credible scientific evidence that could substantiate his allegations. "We have not seen any reliable evidence that our gypsum wallboard poses any of the issues associated with defective Chinese wallboard," said Weisbruch.

"The decision to dismiss the case without prejudice is not a reflection of the merits of Mr Yee's case," said William Anderson, an attorney representing the Arizona homeowner. "The dismissal in no way exonerates National Gypsum and any assertion to the contrary is irresponsible and false. Mr Yee is a member of the proposed class in litigation in Florida and we will watch with great interest how that case proceeds."

Robert Gary, who is working on the Florida case, said it made sense to move Yee's case to the Florida lawsuit. The 93 plaintiffs in that lawsuit say that National Gypsum wallboard caused corrosion problems in their homes. "Everyone has decided that the cases are most appropriately centred in Florida, because that's where the bulk of the victims are," said Gary. "The suit involves the same team of lawyers involved in the Arizona case."

The Consumer Product Safety Commission is leading its own investigation into reported American wallboard problems.

US: Eagle Materials, Inc. has reported financial results for the 2011 fiscal year (FY2011) and the fiscal fourth quarter, both ending 31 March 2011. In its release on 5 May 2011, the company said notable items for the fiscal year and quarter included FY2011 revenues of US$462.2m and FY2011 net earnings of US$14.8m. The company's net debt-to-total capitalisation ratio was 38% compared to 40% a year earlier. For the fourth quarter, the company saw revenues of US$95.4m and a net loss of US$10.8m. The fourth quarter results reflect US$10.7m of non-operating expenses.

France: Lafarge has chosen a handful of bids, including those of investment funds Cinven and Bain Capital, for its plaster unit Lafarge Gypsum, from at least 10 different offers. Belgian building material group Etex is also reportedly still in the race, while Advent, Carlyle and TPG have been ruled out.

Other offers were reportedly made by Kohlberg Kravis Roberts & Co. Eagle Materials Inc., USG Corp and Saudi Arabia's National Gypsum Company. The bids are around Euro900m on average.

Lafarge Gypsum's operating profit jumped 80% on the year in the first quarter to Euro18m, while its sales rose by 9% to Euro375m. The US activity, however, struggled with a loss in 2010. It is not known whether or not the assets will be split up geographically, as had previously been suggested.