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Written by Global Gypsum staff
28 May 2015
US: According to local media, NB Power has paid J D Irving more than US$12.3m in penalties and contract renegotiation fees since 2009.
"The revelation that NB Power has a contract with J D Irving to provide gypsum from the oil-burning Coleson Cove plant until 2026 for Irving's wallboard plant and pay J D Irving when they can't deliver stunned many New Brunswickers," said David Coon, New Brunswick Green Party leader. "It reminds me of the contract this government currently has with J D Irving to supply an unsustainable volume of softwood from the Crown lands for years into the future or pay up if they can't deliver."
The 2005 contract commits NB Power's Coleson Cove generating station to provide a minimum amount of synthetic gypsum to Atlantic Wallboard every year until 2026. NB Power currently produces 20,000 - 30,000t/yr of gypsum. According to NB Power, the contract states that in the event of a production shortfall, NB Power must pay for the difference between the actual gypsum supplied and the minimum amount of gypsum agreed to in the contract. NB Power has paid US$5.33m in shortfall penalties since the 2009 - 2010 fiscal year. NB Power paid Atlantic Wallboard another US$5m in 2010 - 2011 so that it could reduce the annual cap that it is required to meet, thereby reducing the penalties it has to pay in the future.
Brent Staeben, director of marketing and communications for NB Power, said that the contract was again renegotiated recently, costing another US$2m. "The contract has evolved over time to reflect the fact that the production at Coleson is changing. We have been in constant talks and negotiations over the course of this contract with the buyer to ensure that it better reflects the production at the facility, said Staeben. NB Power has budgeted another US$829,000 for a penalty payment for 2015 - 2016.
Despite the fact that Coleson Cove is producing less gypsum than anticipated, Staeben sid that the contract still makes economic sense because the gypsum needs to be disposed of one way or another. "Originally we committed because we had some sense of how much we would be producing over time. We estimated that, at that time, when we looked into the future, we would need to landfill this," said Staeben. "The cost of landfilling would be significant, in the tens-of-millions of dollars. Even with the changing nature of production there, it's still a very, very good deal for New Brunswickers," he added.
"Without the synthetic gypsum from Coleson Cove, the project would not proceed as the economics to run a gypsum plant in Saint John, relying solely on natural gypsum rock, would not be viable," said Atlantic Wallboard's franchise application to the New Brunswick Energy and Utilities Board in 2006. The document also stated that, "Over time, however, synthetic gypsum from NB Power's generating stations will be supplemented by natural gypsum planned to be imported from out-of-province sources to produce wallboard products."
US: Oklahoma-based ACG Materials has appointed Paul Harrington as its new CEO. ACG Materials is a national provider of minerals, aggregates and related downstream products including gypsum, limestone, sand, gravel and anhydrite.
Paul Harrington joined ACG Materials in July 2014 as president and COO. Prior to July 2014, Harrington was executive vice president at Rain for Rent. Before that, he spent 24 years working for Holcim.
Israel: Israel Chemicals (ICL) is selling its gypsum, pharmaceutical and cosmetics (PCG) business to One Rock Capital Partners for an estimated US$50m.
The sale of the PCG business units is part of ICL's 'Next Step Forward' strategy to divest its non-core businesses to focus on its core businesses in the agriculture, food and engineered materials markets. Israel Chemicals Performance Products' gypsum business is mostly in the UK and focuses on dental applications.
Spain: Uralita has appointed Javier Gonzalez as its new CEO after former CEO Javier Serratosa stepped down as a result of a debt refinancing agreement.
The refinancing contract granted private equity company KKR Fund control over the majority of the capital of Uralita's insulation subsidiary Ursa, which generated approximately 70% of the company's consolidated revenue in 2014. Serratosa, who continues to maintain a stake in Uralita, will thus assume the presidency of Ursa, in which Uralita will continue to hold a 10% stake. Uralita additionally reinforced its executive team through the appointment of Gonzalo Serratosa as vice president.
UK: Mid UK Recycling Limited plans to extend its Wilsford Heath waste management facility at Ancaster, South Kesteven in Lincolnshire. If its plans are approved, the plant would recycle up to 350,000t/yr of waste mattresses and plastics.
Chris Mountain, managing director, said that the investment could run into 'multiple millions' of Euros. "We are an existing business, we employ 350 people in Sleaford, Caythorpe and the Ancaster site," said Mountain. "We will put in the main planning proposal in the next three months and as soon as we get the green light we'll start straight away." He said that initially the company wants to start by the end of December 2015, although it may take three years to complete the expansion. "We have been four years developing the site next-door, which is full to capacity now," he said. "The range of products we produce is getting wider and wider. It makes no sense to export those jobs out of the county."
There would be a building for machinery that could break down mattresses into resalable parts. Leftovers would form solid recovered fuel (SRF) products, which could by cement plants and power stations. Another building would be created for packing and storing gypsum from recycled wallboard, which would be sold to supermarkets as cat litter. The business would also bring in a new way of recycling rigid plastics, breaking them down into granules to sell to Lincolnshire manufacturers of drainage pipes, water pipes and car parts.