Gypsum industry news

Canada: USG has announced that it permanently closing the Fundy Gypsum mine in Hantsport, Nova Scotia. 50 people were working at the mine until it was idled earlier in 2011. The Hantsport mine had been producing gypsum since 1934.

Robert Williams, spokesman for USG, said that the decision to close is a direct result of weak demand for USG's flagship wallboard Sheetrock® in the United States. because of the ongoing housing recession. He said being a stand-alone mine an expensive freighter ride away from USG's four US manufacturing plants also hurt the Hantsport mine's viability. Williams said finding another buyer will be difficult.

"The main use for gypsum is gypsum wallboard,"' he said. "It is unlikely that anyone else would have an appetite for it."

The company once employed hundreds of people and spent US$50m in the 1990s to upgrade the Hantsport operation.

US: Gypsum consumption in the US has declined steeply in the past five years according to data released from the US Geological Survey, falling by over 50% from 41.6Mt in 2006 to just 19.4Mt in 2010. However, following an announcement that housing starts will increase by 15% in 2012 from the National Association of Home Builders (NAHB), gypsum demand is expected to finally rise.

The increase in housing starts and associated increase in gypsum wallboard demand is forecast to cause an increase in gypsum wallboard prices, with National Gypsum Properties, a North Carolina-based provider of wallboard and related products, announcing plans to raise its prices by 35% from 1 January 2012. Other suppliers and manufacturers may follow suit.

Craig Weisbruch, National Gypsum's senior vice president of sales and marketing, said that manufacturers expect to sell about 17bn ft² of wallboard in 2011, down from 38bn ft² in 2006. "We're changing the nature of the game here," he said. "I don't know if it will work or not, but we're all losing money. The amount of product we're shipping is so little we just can't cover our costs."

US: National Gypsum has announced that an Alabama lawsuit against the company has been dismissed. The suit claimed that National Gypsum wallboard exhibited the same characteristics as allegedly defective Chinese wallboard.

Marshall County, Alabama Circuit Court Judge Tim Jolley entered an order dismissing the case, Clark vs. National Gypsum, et. al. 'with prejudice', meaning that the plaintiffs are barred from bringing the same claim against the company again.

"This result is yet another confirmation of the quality and safety of our products and another blow to those making baseless claims against our company," said Craig Weisbruch, senior vice president of sales and marketing. "All National Gypsum wallboard has passed the industry's most rigorous testing and certification processes for indoor air quality and has been used by the US Green Building Council in its buildings."

The dismissal of the Alabama lawsuit follows a similar case in April 2011. A federal judge in Arizona dismissed a putative national class action against National Gypsum that had alleged that the company manufactured defective wallboard which emitted high levels of sulphur, damaged property inside homes and caused health symptoms. These problems have typically been associated with allegedly defective Chinese wallboard, not domestic wallboard. The plaintiff did not produce any credible scientific evidence that could substantiate his allegations.

"All credible scientific evidence - including studies by the federal government's leading safety experts - has led to the same conclusion," said Weisbruch. "National Gypsum wallboard does not pose the issues associated with allegedly defective Chinese drywall."

France: Lafarge has received Euro850m from the sale of its European and South American gypsum assets to Belgium's Etex Group. Lafarge will retain a 20% interest in the new partnership. The new entity created by the acquisition will have an annual revenue of around Euro1bn, according to Etex.

Europe/South America: The Belgian building-material company Etex Group has received approval from the European Commission (EC) to buy the European and South American gypsum activities of French cement group Lafarge for over Euro1bn (USD1.4bn). The EC ruled that the transaction would not significantly impede effective competition.

The activities, which generated Euro895m in revenue for Lafarge in 2010, will be incorporated into a new entity, in which Lafarge will hold a 20% stake. The divestment is in line with Lafarge's strategy to reduce its debt by Euro2bn in 2011.