Gypsum industry news
US: USG says that the Science Based Targets initiative (SBTi) has approved its 2030 emission reduction targets. The subsidiary of Germany-based Knauf said that it was one of just a few companies in the US building-product sector that has signed onto SBTi. The company has agreed to reduce its carbon emissions from manufacturing (Scope 1 and 2) at the WB-2°C (well below 2°C) level, which equates to a 30% reduction in greenhouse gas emissions by 2030. USG has also committed to reducing carbon emissions associated with purchased raw materials and services, transportation and waste generation (Scope 3) by 15% within the same period.
Saint-Gobain increases sales in 2022
24 February 2023France: Saint-Gobain recorded sales of Euro51.2bn during 2022, up by 16% year-on-year from Euro44.2bn in 2021. The group reported that its sales volumes fell by 1.3% year-on-year. It nonetheless recorded growth in revenues of 9.2% in Northern Europe, 8.2% in Southern Europe, the Middle East and Africa, 33% in the Americas and 19% in Asia-Pacific.
During the year, Saint-Gobain made Euro3.8bn-worth of divestments, including of its Polish and UK distribution businesses, and Euro1.9bn-worth of new acquisitions.
CEO Benoit Bazin said “In an unsettled geopolitical, energy and macroeconomic environment in 2022, the group once again delivered record results. The group’s profile has been profoundly optimised: one-third of the group’s scope has changed in the past four years and over 60% of our earnings now come from North America and emerging countries." Bazin continued "I am confident that 2023 will be a good year for Saint-Gobain. Our roadmap is clear: disciplined execution of the Grow & Impact strategic priorities, leveraging the strength of our operating model against the backdrop of a slowdown in new construction but good resilience in renovation."
American walls made from American gypsum
13 February 2023Gypsum wallboard or drywall got name-checked by the commander-in-chief of the US last week. President Joe Biden announced during his State of the Union Address to the US Congress on 7 February 2023 that he was going to require that, “all construction materials used in federal infrastructure projects to be made in America.” He then expressly mentioned wallboard along with lumber, glass and fibre-optic cables before adding the catchy sound-bite, “American roads, bridges, and American highways are going to be made with American products as well.” Although for the wallboard sector he might as well have been saying that American walls are going to be made from American wallboard.
Biden’s focus on gypsum wallboard and other building materials is linked to the US$1.2Tn Infrastructure Bill that was signed in late 2021. The White House Office of Management and Budget (OMB) issued guidance in mid-2022 on how the spending should be targeted at US manufactured construction materials. At that time it excluded steel, cement, aggregates and additives but included non-ferrous metals, plastic and polymer-based products, glass, lumber and wallboard in its category of ‘construction materials’ that should be sourced locally. Its definition of ‘construction materials’ meant that the manufacturing process for the construction material occurred in the US. Although combining some of the materials above as a composite would then be classified as a ‘manufactured product,’ at which point, 55% of the total costs of the components would have to be mined, produced or sourced in the US to meet the so-called ‘Buy America’ preference. The new bit following Biden’s recent speech is that the OMB has released further guidance for the ‘construction materials’ mentioned above. So far, so much legalese.
Canada-based manufacturers of building materials are understandably wary of this kind of talk. However, ‘Buy America’ has been around since the 1930s and there have often been ways around it. As Jean Simard, the president and chief executive officer of the Aluminium Association of Canada, told CBC, in practical terms, the math is on Canada's side. "Canada represents about 70% of total US imports. That's not going to change."
Data on how much wallboard is actually exported from Canada to the US is hard to find but the former’s wallboard sector is about 10 times smaller than the latter’s. Most of the gypsum producers in Canada are owned by international companies with a presence in the US also. This created an interesting situation in October 2022 when CertainTeed Canada welcomed the Canadian International Trade Tribunal's ruling in favour of six provinces and territories' anti-dumping measures on imports of gypsum wallboard from the US. CertainTeed is owned by France-based Saint-Gobain, which also runs Continental Building Products. Together, Saint-Gobain is the second largest wallboard producer in the US by installed capacity. It seems unlikely that the current US rhetoric will reduce Canada’s exports of crude gypsum south of the border. Data from the United States Geological Survey (USGS) shows that the US imported 1.57Mt of crude gypsum from Canada in the first nine months of 2022, an increase of 12% year-on-year from the same period in 2021. Imports from Mexico had been similar so far in 2022, although they are down compared to 2021.
The other reason Biden may have mentioned wallboard specifically in a patriotic speech may have been in relation to the long-running defective China-based wallboard story from the early 2000s. Although the legal cases associated with this have mostly died down, one popped up in early February 2023 when Knauf and its China-based subsidiaries managed to avoid a product liability claim because the Florida-based plaintiff had waited too long. Knauf now owns the US’ largest wallboard producer, USG.
It is worth remembering that the US remains the largest wallboard market in the world by production capacity. So calls by a politician to ‘Buy America’ may be more for the ears of voters rather than industry. Although that’s not to say that the situation won’t change in the future. The examples above also show that the US may have been guilty of dumping wallboard upon its neighbours and that the two largest producers in the US are both foreign owned. The other thing that Joe Biden said in his State of the Union Address was that buying American was “totally consistent with international trade rules.” This comment may have been made in response to European criticism of some of the implications of the Inflation Reduction Act with its incentives for industrial supply chains supporting renewable energy production and electric vehicles, be they based in the US or in ‘friendly’ countries. The wallboard sector seems unlikely to be caught up in this directly but protectionism is in the air. How this manifests in corporate strategy over the next few years may be telling.
US: The White House has released proposed guidance mandating the use of locally manufactured building materials in government-funded infrastructure projects. President Joe Biden made the announcement in his State of the Union address on 7 February 2023, according to Reuters. The new proposed guidance has been released by the White House Office of Management and Budget (OMB) and will be controlled by the House of Congress under the US$1Tn 2021 infrastructure law.
During his address Biden said, “When we do these projects... we’re going to buy American." He added, “It's totally consistent with international trade rule." He cited lumber, glass, wallboard and fibre optic cables during the speech. The OMB later added plastic and polymer-based products to this list. It is also seeking input on whether to include additional construction materials such as paint, bricks and engineered wood products
USG proposes exploratory drilling in national forest land in Indiana
13 February 2023US: USG has proposed to the Forest Service that it be allowed to conduct exploratory core drilling on National Forest System (NFS) lands south of its Shoals gypsum wallboard plant in Indiana. The drilling is intended to verify probable mineral resources within a 520ha area of NFS land ahead of future mining activities that would occur from the plant, according to the Washington Times-Herald newspaper. The USG drilling proposal is for a duration of two years beginning in the spring of 2023.
USG owns the subsurface mineral rights for mining gypsum deposits while the Forest Service owns the surface rights to a portion of land located within the Hoosier National Forest. The Forest Service previously gave permission for USG to conduct drilling on most of the land in 1995 but it is currently evaluating the impact it would entail, considering mitigation options and seeking public comment.
CertainTeed launches new branding
13 February 2023US: CertainTeed has updated its visual branding, including its logo. The new design was officially launched at the International Builders’ Show that took place in Las Vegas from late January 2023. The light building materials producer says that the exercise “represents a major paradigm shift for the manufacturer – reinforcing its customer-focused, comprehensive offering of light and sustainable building solutions and systems.”
CertainTeed’s chief executive officer Mark Rayfield said “As a leader at the forefront of the building sector, we recognised an opportunity to evolve how our customers specify our products." He added, "We're taking 'one-stop shop' to the next level by serving as a preferred source for cohesive systems and complementary products that not only help builders grow their reputation, but make it easier than ever to deliver on what matters most: performance, sustainability, and longevity."
The company says that the new visual identity is inspired by the creative ritual of reviewing and selecting materials in the early stages of construction or remodeling. Logo details, such as the cartouche, borrowed from the logo of parent company Saint-Gobain, serve as a nod to their connection, while the interlocking pattern acknowledges CertainTeed as an interdependent collective of connections - in its work, its communities, and the planet.
US: Georgia-Pacific will close its 60Mm2/yr Quanah gypsum wallboard plant in Texas on 1 March 2023. Local press has reported that the plant employs 166 people. Georgia-Pacific first announced its planned closure in 2020.
Eagle Materials boosts sales and earnings in first nine months of 2023 financial year
26 January 2023US: Eagle Materials’ consolidated sales were US$1.68bn during the first nine months of its 2023 financial year, up by 16% year-on-year from US$1.45bn in the corresponding period of the 2022 financial year. Its net earnings were US$361m, up by 20% year-on-year from US$300m.
In its gypsum wallboard business, the group noted increased sales volumes and prices, alongside a ‘sharp’ drop in raw material costs, during the third quarter of the 2023 financial year. Its gypsum wallboard volumes rose by 5% year-on-year to 67.6Mm2 during the quarter. This resulted in a 23% rise in the business’ revenues, to US$235m.
Eric M Cribbs appointed as president of American Gypsum
13 January 2023US: American Gypsum has appointed Eric M Cribbs as its president. He succeeds Steven L Wentzel at the subsidiary of Eagle Materials who has decided to retire on 1 June 2023.
Cribbs currently works as Eagle Materials’ Executive Vice President of Concrete & Aggregates, Advanced Cementitious Materials, Logistics, and Procurement & Materials. A role he has held since early 2021. Cribbs joined the company in June 2015 and prior to his current position, most recently served as Vice President of Concrete and Aggregates, Safety, Logistics, and Procurement & Materials and Vice President of Concrete and Aggregates. Earlier in his career he worked as the US Northern Region Operations Manager for Halliburton. Cribbs holds an undergraduate degree in Petroleum Engineering from the University of Alaska Fairbanks.
Ukraine: A US White House official has accused the Wagner Group of conducting military operations near Bakhmut with the objective of seizing raw gypsum and salt deposits in the area. The official said that there were indications that monetary motives were driving the mercenary group and Russia’s "obsession" with the city, according to Reuters. The US government has previously accused Russian mercenaries of exploiting natural resources in the Central African Republic, Mali and Sudan to help fund Moscow's war in Ukraine. The Russian government has rejected the allegations.
Russia claims that its army took control of Soledar, a town near Bakhmut, on 13 January 2023. However, western European news sources have been unable to independently verify this. Etex’s local subsidiary Siniat Ukraine operated a gypsum wallboard plant on the outskirts of Bakhmut before Russia invaded the country in February 2022. The current status of the plant is unknown.