Gypsum industry news

Georgia-Pacific officially opened its new gypsum wallboard plant at Sweetwater in Texas earlier this month. The US$325m project is situated next to the company’s existing plant at the site, Sweetwater West, on the other side of a road. Canada-based Gyptech said in 2021 that it was supplying the equipment for the new high-speed line at the site.

When Georgia-Pacific first announced the new project in 2020, it mentioned that it would be able to keep its logistics costs low, use raw gypsum reserves and the existing workforce. Despite this, the plant has still created over 100 new jobs. The company also said that it anticipated closing its 60Mm²/yr Quanah plant, also in Texas, depending upon market conditions. This came to pass in March 2023. Altogether, both plants at Sweetwater will have a production capacity of around 93Mm²/yr. This implies that the new plant has a production capacity of around 60Mm²/yr, given that the existing plant’s capacity is 30Mm²/yr. Funnily enough this is the same as the Quanah plant.

The new plant at Sweetwater may be a sign that the US wallboard market is picking up again. Georgia-Pacific has invested some serious money and it is targeting Texas, a leading area for construction nationally. However, it does come with a few caveats. Firstly, the new plant at Sweetwater is replacing existing capacity at Quanah. Secondly, it is using some of the advantages of the existing plant such as its trucks and its proximity to its customers. This suggests that the company may be wary of building a new plant in a greenfield location with all the potential risks that might involve.

US wallboard sales have regularly peaked and troughed over the decades, like many other commodity markets, as demand and production capacity race each other. Sales of wallboard peaked around the year 2000 and then again in the mid 2000s before tailing off following the 2007 recession. They have been recovering ever since and started to get close to the levels seen in the first half of the 2000s in 2022 when the United States Geological Survey (USGS) reported wallboard sales of 2.6Bnm².

Generally, the last tranche of new wallboard plants in the US were built or approved in the late 2000s before the financial downturn. These new sites included CertainTeed’s Roxboro plant in North Carolina and the Moundsville plant in West Virginia, Gold Bond Building Products’ Mount Holly plant in North Carolina and American Gypsum’s Georgetown plant in South Carolina. From this point though various plants were either closed or mothballed. Some of the latter have been restarted as the market slowly recovered. New plant projects in the 2010s tended to be upgrades or replacements. One example of this was USG’s plan to rebuild a production line at its Jacksonville plant in Florida, which was announced in late 2017 before Knauf took over the company in 2018. Another was National Gypsum’s scheme to reopen its Wilmington plant in North Carolina in 2019. At the same time in the 2010s there were a number of mergers and acquisitions including Lafarge’s sale of its gypsum business in North America in 2013, Knauf’s takeover of USG in 2019 and Saint-Gobain’s acquisition of Continental Building Products in 2020.

When Georgia-Pacific started building the new plant at Sweetwater in 2020 this marked the start of a new phase of US wallboard plant projects. American Gypsum announced plans for an upgrade to its Albuquerque gypsum wallboard plant in 2021, Gold Bond Building Products started building its long-delayed Eloy plant in Arizona in 2022 and it said it was spending US$90m on an upgrade to its Mount Holly gypsum wallboard plant in North Carolina in 2023, and CertainTeed revealed it wanted to build a second production line at its Palatka gypsum wallboard plant in Florida also in 2023.

Congratulations are due to Georgia-Pacific for the achievement at Sweetwater. Optimism for the US market in general may also be in order given the slow but steady stream of projects that have been announced and completed since 2020. The next step, when a company builds a new wallboard plant at a greenfield site in the US, looks set to happen when Gold Bond Building Products completes its Eloy plant.

US: Eagle Materials sold 139Mm² of gypsum wallboard during the first half of its 2024 financial year (1 April 2023 – 30 September 2023), a decrease of 5% year-on-year from 147Mm² in the same period in the 2023 financial year. This contributed sales worth US$428m, down by 2.9% and corresponding to 35% of total group sales. Overall, group revenue rose by 4.9% to US$1.22bn.

President and chief executive officer Michael Haack said "Market conditions for our construction materials remained resilient during the quarter, even as the Federal Reserve continued to raise interest rates and tighten money supply to contain inflation. Several factors helped offset the higher rates and supported demand for wallboard, including limited housing supply, strong homebuyer demand, increasing infrastructure awards and significant investment in domestic manufacturing facilities.” Haack added “the backlog of housing construction supported resilient wallboard shipments and orders, but we recognise the significant increase in interest rates may have an impact on residential construction activity in the future. Nonetheless, we expect that our portfolio of businesses will remain well-positioned for the second half of fiscal 2024."

Peru: Nicolás Restrepo, the Andean Region manager for Etex, says that an ongoing upgrade to the Huachipa gypsum wallboard plant is set to be finished by 2025. In an interview with the Gestión newspaper he revealed that the US$31.5m project should be 60% complete by the end of 2023. Once commissioned the upgrade will double the production capacity of the unit.

Japan: Chiyoda Ute intends to launch a gypsum board product, Chiyoda Hokkaido Board, which uses 50% recycled gypsum, from December 2023. The product will be manufactured at its Muroran plant in Hokkaido. Subsidiary Tokuyama Chiyoda Gypsum opened a gypsum recycling plant in Muroran in September 2023. Chiyoda Ute owns a 49% share in Tokuyama Chiyoda Gypsum and Tokuyama Corporation owns the remainder.

US: Beneficial Reuse Management (BRM) has acquired Pennsylvania-based gypsum wallboard recycling firm USA Gypsum (USAG).

BRM board chair Dave Schuurman said “The acquisition of USAG gives BRM an opportunity to further diversify our sources of gypsum to include recycled scrap wallboard, as well as to grow our geographic footprint. USAG’s operations will complement our existing gypsum processing operations, which provide gypsum in pelletised form to agricultural and other markets. This acquisition aligns perfectly with our mission of providing sustainable solutions for the management of industrial byproducts to divert materials away from landfills.”