Gypsum industry news
USG’s profit takes a hit in first nine months of 2018
29 October 2018US: USG’s operating profit fell by 30% year-on-year to US$190m in the first nine months of 2018 from US$270m in the same period in 2017. The building materials company blamed this on rising costs in the third quarter, arising from transport costs and non-production costs linked to its Customer-First strategy. Despite this, net sales rose by 6% to US$2.52bn from US$2.37bn.
The company is currently being acquired by Germany’s Knauf. The takeover is expected to complete in early 2019. In its third quarter financial report USG said that Boral had started proceedings in late August 2018 to determine the value of the USG Boral joint venture. This process could lead to Boral exercising its right to purchase USG’s 50% interest in USG Boral.
USG Boral Thailand wins Green Industry award
21 September 2018Thailand: USG Boral Thailand, also known as Siam Gypsum, has won the Green Industry Award at the Green Industry Forum Seminar. The award was presented by Suthon Nikomkate, Deputy Secretary-General of the Office of Industrial Product Standards, Ministry of Industry to Wuttichai Ponmanop, Factory Management Manager, Siam Gypsum. The gypsum wallboard manufacturer was awarded the accolade for its focus on its production process, environmental management and its social environmental responsibility.
Watchdog investigating Knauf’s USG takeover in Australia
03 September 2018Australia: Australia’s competition watchdog is investigating Knauf”s proposed US$7bn takeover of Boral’s US-based joint venture partner USG for potential breach of its merger rules. The Boral-USG joint venture is the biggest gypsum wallboard supplier in Australia, followed by CSR. Knauf is third largest, meaning that the takeover would combine the number three and number one providers in Australia.
Boral CEO Mike Kane said that he had formally served a notice of default to Knauf, triggering an automatic review of the value of the joint venture. When the valuation is completed Boral will then decide whether to exercise its right of first refusal over the Asian and Australian joint venture operations. This is expected to be finalised during October 2018.
Australia: USG Boral’s earnings have been hit by competition in Indonesia, Thailand and Vietnam, higher input costs including paper and a one-off cost. Earnings before interest, taxation, depreciation and amortisation (EBTIDA) were negatively affected by a one-off cost of US$8m associated with a three-month closure of the port of Thevenard in South Australia and an unfavourable operational reserve adjustment in India. Its EBITDA fell by 6% year-on-year to US$196m in the financial year to 30 June 2018 from US$207m in the same period in 2017.
However, despite this its sales revenue rose by 7% to US$1.15bn from US$1.08bn. This was attributed to continued adoption of its Sheetrock products and technical board in Australia, Korea, China and Thailand. Overall board volumes increased by 3% year-on-year and technical board, which represents 20% of volumes, grew by 20%. Gypsum wallboard volumes grew in Australia and China, and ‘strong’ price gains were achieved in South Korea and China.
“This long-term growth business has delivered impressive and uninterrupted year on year growth since the formation of the joint-venture in 2014, with FY2018 being a consolidation year. Australia, Korea and China delivered strong top line growth in FY2018, offsetting pressures in countries such as Indonesia, Thailand and Vietnam and some unexpected one-off cost impacts,” said chief executive officer and managing director Mike Kane. He added that the company is currently considering an expanded joint-venture with Germany’s Knauf in relation to its proposed acquisition of USG. However, Boral is also considering a return to 100% Boral ownership.
India: USG Boral has held a ground breaking event for a new 30Mm2 gypsum wallboard plant that it is building at Sri City in Andhra Pradesh. The project has an investment of US$39m. The new plant will be operated by local subsidiary USG Boral Building Products India. The site is expected to become operational by the end of 2019. It will create over 100 new jobs. It joins USG Boral’s 9Mm2 wallboard plant at Khushkhera, New Delhi.
"This facility offers us the ability to significantly increase our operations in India and provide our customers in the region with the best plasterboard products," said Frederic de Rougemont, the chief executive officer (CEO) of USG Boral.
USG Boral India appoints Sumit Bidani as CEO
21 May 2018India: USG Boral has appointed Sumit Bidani as the chief executive officer (CEO) of its Indian operations. He will also be responsible for developing the growth strategies and expansion of USG Boral across South Asia, according to Dataquest.
Sumit is a graduate from the Indian Institute of Technology, Madras and a post-graduate from XLRI, Jamshedpur. Prior to his role at USG Boral, Sumit was the Managing Director at Formica India and has held senior positions in global companies such as Colgate Palmolive, General Mills, and Shell Lubricants.
USG Boral India operates two plants in the country: a plasterboard and metal plant in Khushkhera, New Delhi and a joint compound and putty plant in Chennai.
Australia: Boral Ltd has announced that its profit for the first half of the 2017-2018 fiscal year (from 1 July 2017 – 31 December 2017) rose by 13%. The company benefited from the 2017 acquisition of the US-based building products firm Headwaters Inc. and continued growth in its Australian business.
It reported a net profit of US$136.0m for the six month period, a rise of 12.7% compared to the same period of the 2016 – 2017 fiscal year when it made US$120.7m. Its profit before amortisation and significant items increased by 58% to US$$186.5m.
"These strong results confirm that our transformation strategy is on track," said Chief Executive Mike Kane. "The Headwaters acquisition has helped transform Boral into a construction materials and building products group with a greater geographic reach and improved prospects for growth."
Boral’s US business, which was only breaking even in 2015 – 2016, recorded a fourfold rise in earnings, despite adverse impacts from bad weather, including two hurricanes.
Kane also said Boral’s Australian arm, its largest divison, was ‘exceptionally strong’ during the half. Boral reported a 12% rise in earnings before interest, tax, depreciation and amortisation from that business.
"Higher revenues and earnings were driven by increased spending on infrastructure, in line with our expectations that a large proportion of our work would gradually shift from residential to infrastructure projects, primarily in the eastern states," said Kane.
Boral reported a 1% dip in earnings from its USG Boral division, a joint-venture with USG Corp., the largest US maker of gypsum wallboard, which operates throughout Asia, the Middle East, Australia and New Zealand.
USG Boral to spend US$20m on upgrade in Vietnam
08 December 2017Vietnam: USG Boral plans to invest US$20m towards upgrading its gypsum wallboard plant at the Hiep Phuoc Industrial Zone in Ho Chi Minh City. The project will increase the plant’s production capacity by 17Mm2 to 47Mm2 when it starts operation in September 2019.
"We have witnessed strong growth from this region so our decision to invest in the plant is a strategic one. We remain committed to building USG Boral's presence in Southeast Asia. This expansion will see USG Boral utilising our latest Sheetrock technology to provide superior building solutions for the Vietnam market," said Frederic de Rougemont, CEO of USG Boral.
USG Boral started wallboard production in Vietnam in 2006. It produces the Sheetrock, FireBloc, Durock and Firerock brands.
USG Boral considering plant in Andhra Pradesh
04 September 2017India: Thomas Paul, the operations director of USG Boral, has met with the chief minister of Andhra Pradesh, N, Chandrababu Naidu, to discuss building a plant in the state, according to the Hindu newspaper. Earlier in 2017 the wallboard producer said that it was building a 30Mm2/yr wallboard plant near Chennai in Tamil Nadu.
New USG Boral wallboard plant for India
22 May 2017India: USG Boral has announced that it will set up a 30Mm2/yr wallboard plant near Chennai at a cost of US$46m. The plant will support USG Boral's commitment in southern India as the company looks for ways to better serve its customers in India.
Plans are underway to break ground in the third quarter of 2017. The plant is expected to be fully operational within 24 months. More than 100 people are expected to be employed once the plant is operating at full capacity.
The new facility will add to USG Boral's India presence, where it currently operates two other facilities, a 9Mm2/yr wallboard and metal plant in Khushkhera, near New Delhi, and a joint compound and putty plant, in the Chennai area.