Gypsum industry news
Boral could buy remaining stake in USG-Boral for US$0.5bn
09 January 2019Australia: Ord Minnett, a financial services company, estimates that Boral could pay as little as US$0.5bn to buy the other half of USG-Boral, the joint venture it runs with USG. The financial company has made the forecast following the on-going acquisition of USG by Germany’s Knauf, according to the Australian newspaper. It believes that Boral is in a strong position given falling value of the joint venture and problems with Knauf’s geographical asset base following its purchase.
USG Boral earnings expected to grow by 10% in 2019
01 November 2018Australia: Boral’s chief executive officer, Mike Kane, expects that its USG Boral joint venture’s earnings will grow by 10% in its financial year to the end of June 2019. He told shareholders at the company’s annual general meeting that improvements in markets in China, Indonesia, Thailand and India would counteract slowing residential construction in Australia and South Korea, according to the Australian newspaper. He also said that Boral is conducting two valuations of USG Boral following the merger of USG and Knauf. The company is considering whether to buy the other half of the joint venture or whether to find another partner.
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.
James Hardie completes acquisition of Fermacell
04 April 2018Germany: Australia’s James Hardie has completed its acquisition of Fermacell for Euro473m. It agreed to buy the gypsum wallboard producer from Xella International in November 2017 and then took out a loan in December 2017 to cover the purchase.
James Hardie plans to include European Building Products segment in its report of quarterly results from the first quarter of 2019. This new segment will include the on-going James Hardie European Fiber Cement business and the newly acquired Fermacell business. The current International Fiber Cement segment will be renamed Asia Pacific Fiber Cement and will include its Australia, New Zealand and Philippines businesses.
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.
Former head of BPB dies in plane accident
03 January 2018Australia/UK: Richard Cousins the former chief executive of UK-based wallboard producer BPB has died in a plane accident in Australia. He worked for six years as the chief executive officer for BPB following a number of previous roles at the company. Following its takeover by Saint-Gobain he subsequently joined the board of Compass group in the food services sector and became its group chief executive in 2006.
Australia: Clean TeQ plans to build a 2Ml/day DeSALx mine water treatment plant for Fosterville Gold Mine for its mine near Bendigo in Victoria. The US$2.7m unit will use an integrated precipitation and continuous ionic filtration process (DeSALx) that will produce a gypsum-based by-product. This by-product will be compatible with Fosterville’s existing lime treatment plant. Equipment supply, installation and commissioning of the water treatment plant are scheduled for 2018.
The precipitation process removes arsenic and antimony from the mine water as a co-precipitate. The water is then treated by the DeSALx process to remove hardness, sulphate and other dissolved metals. Clean TeQ is also in talks with other mining companies to test its continuous ion-exchange systems for the treatment of process water treatment for recycling or environmental discharge.
James Hardie to buy Fermacell for Euro473m
09 November 2017Germany: Australia’s James Hardie is to buy Fermacell for Euro473m. The Australian company has entered into a definitive agreement to buy XI (DL) Holdings and its subsidiaries, including the gypsum fibreboard producer. The deal is expected to close in the first quarter 2018.
“Fermacell’s market position, go-to-market strategy and strong management team will enable us to scale and accelerate our European business, which has long been a strategic goal. Fermacell will diversify our geographic, product and end-market portfolio, complementing our strong positions in North America and Australasia, and will create significant growth opportunities and drive long-term value for customers, employees and shareholders,” said Louis Gries, chief executive officer (EO) of James Hardie.
Jack Truong, President, International Operations of James Hardie, added that Fermacell’s ‘broad’ European footprint and capabilities were expected to ‘accelerate’ his company’s fibre cement business growth in Europe. James Hardie is also ‘excited’ about the future growth opportunities of Fermacell’s core business in regions such as the UK, France, and Scandinavia.
Bundaberg plant accused of intimidation by union
06 November 2017Australia: The Construction, Forestry, Mining and Energy Union (CFMEU) has claimed that workers at Knauf’s Bundaberg wallboard plant have been bullied and intimidated over safety issues. The CFMEU has released information that claims that Workplace Health and Safety Queensland has hit the plant with eight safety improvement notices since it opened in late August 2017.
The CFMEU’s divisional branch assistant secretary Jade Ingham said said that workers had been greeted with a hostile response when they attempted to take their safety concerns higher. “These workers have been bullied and intimidated for raising concerns about the safety and wellbeing of them and their workmates,” she said. “To have a brand new state-of-the-art factory like this have eight safety improvement notices cast upon it in the first two months of being open is a disgrace.”
Knauf Plasterboard Operations Director Sean Wareham confirmed that the factory had received eight work improvement notices but that ‘none of the items found were deemed to warrant the issue of an infringement notice.’ He said that, throughout its commissioning, the company had maintained its goal to ensure that all factory, engineering, safety practices and legal compliance requirements were adhered to.
“WorkSafe Queensland was invited to attend the Bundaberg site yesterday and determined six of the eight improvement notices have been closed out,” he said. “Of the two remaining notices, one is complete, awaiting official close out, and the other is on track to be completed ahead of time.”
Wareham said as part of Knauf’s commitment to providing a safe place to work, the company actively encouraged employees to raise safety matters, took any improvement recommendations extremely seriously and continued to work closely with its employees and WorkSafe Queensland.