Gypsum industry news
Boral appoints Mike Kane as CEO
10 September 2012Australia: Australian buildings materials company Boral has appointed the head of its US division, Mike Kane, as its new chief executive officer following the departure of Mark Selway in May 2012. Kane will assume the post on 1 October 2012.
Kane joined the company in February 2010 and has executive experience at four other materials companies including US Gypsum, Hanson Building Materials, Johns-Manville and Holcim
"He has spent the past two and a half years significantly realigning the US business to the changed market conditions and positioning Boral to take full advantage of the US market recovery," said chairman Bob Every.
Kane said Boral has an increasingly significant position in the global building materials industry and said its Asian plasterboard unit provides a growth opportunity in that region.
Boral’s second half profit hit by slow housing market
22 August 2012Australia: Boral has reported a 59% fall in second-half profit, hit by weak housing construction in Australia and delays in big resource and road projects. Boral, which removed its chief executive in May 2012, declined to give a fiscal forecast for the year ahead in light of uncertain market conditions, but said it would update investors at its annual meeting in November 2012.
Boral's net profit for the six months to June 2012 fell to US$35.7m from US$87m a year earlier, as calculated from full year figures. The building products maker issued profit warnings in April 2012 and June 2012.
"Earnings from our Australian business in the six months to June were hit by very weak housing and non-residential building activity, combined with delays and disruption from sustained rainfall across the east coast. The positive impact of price increases was more than offset by much weaker sales volumes in these markets and by higher costs, including from the wet weather," said Boral's chief executive officer, Ross Batstone.
Overall for the year to 30 June 2012 profit, after tax dropped by 42% to US$106m from US$183m. Sales revenue grew by 5%, to US$5.24bn from US$4.94bn, but this excludes the impact of the acquisition of Lafarge's 50% of Boral's stake in their Asian plasterboard joint-venture.
Boral's Building Products division reported a 11% fall in revenue for wallboard, to US$368m from US$413m. Sales volumes declined year-on-year by 14%. Overall for the division earnings before interest, taxes, depreciation and amortisation (EBITDA) fell by 46% to US$74.2m from US$138m. The company attributed the decline to the fall in Australian housing which began in year to 30 June 2011 but fell rapidly again in the second half of the 2012 fiscal year, and wet weather. Price increases, which averaged around 2-3% were insufficient to offset the significant impact of lower volumes.
Plasterboard Asia reported a revenue of US$317m since 9 December 2011, when Boral acquired the rest of the joint-venture from Lafarge. Revenues in Indonesia, Thailand and South Korea grew whilst income was below expectations in China, due to a slow-down in construction activity there.
Wallboard capacity increased throughout the year in China with the acquisition of a 35MM2 plant in Shandong and on-going upgrade work increasing capacity from 13MM2 to 43MM2 in Chongqing. In Indonesia a 30MM2 capacity upgrade is currently scheduled in completion for early 2013 and in Vietnam, a 30MM2 upgrade in Ho Chi Minh City plant is progessing in line with expectations but with no given completion date.
For its 2013 outlook Boral expects continued weak housing demand, particularly for the first half of the 2013 fiscal year, to prove challenging for its Building Products division. It added that further interest rate reductions and/or improved consumer 'sentiment' are required for demand to lift in the six months ending June 2013. In Asia, continued growth in construction activity is expected together with more penetration by wallboard. While the residential market remains subdued in China, Boral's plant in Shandong will see growth of sales volumes in new high-end markets in Beijing, Tianjing and Shandong.
Boral sees opportunity to seize Asian markets
14 May 2012Australia: Boral has announced that it expects gross earnings from its Gypsum Asia unit to increase as it reported an upbeat longer term outlook for the business in the rapidly growing Asia market.
It is estimated that earnings before interest, tax, depreciation and amortisation (EBITDA) in 2012 will jump by 19% year-on-year to US$108m, according to Frederic de Rougemont, chief executive of Boral Gypsum Asia.
De Rougemont said that there is strong economic growth forecast across most major markets in Asia, where increases in public investment are driving growth in non-residential construction. Speaking to analysts in South Korea, he added that increasing urbanisation is driving growth in residential construction.
"Asia is expected to become the world's largest plasterboard market in 2014, while China will become the biggest plasterboard market globally by 2015," he said. "Among the global players, BGA has the leading market position throughout Asia" with a 15% estimated market share including China.
New Jayaboard factory to be completed in 2013
08 March 2012Indonesia: Indonesia's largest producer of gypsum PT Petrojaya Boral Plasterboard (Jayaboard) is building a new gypsum board factory in Cilegon, Banten with a production capacity of 30MM2/yr. The project is estimated to cost US$25m and it will expand the capacity of the company to 65MM2/yr.
Construction of the project is already underway and it is to be completed in 2013 said Kil-Joo Lee, the president of the Boral subsidiary.
Boral completes Lafarge Asia acquisition
13 December 2011Asia: Australian building material's group Boral has announced that it has completed its acquisition of Lafarge's interests in the two companies' former joint-venture Lafarge Boral Gypsum Asia. The business has been renamed Boral Gypsum Asia (BGA) and transition plans are in place for product branding in each country. BGA has performed to expectations since the acquisition was announced in August 2011.
The chief executive of Boral, Mark Selway, said, "We are delighted to be able to fully integrate BGA into our group. The continued growth of BGA is a strategic priority and we look forward to working with the management team and employees to develop and execute our plans for the future."
Two calcining line contracts for Claudius Peters
12 October 2011Vietnam/Indonesia: Lafarge Boral Gypsum Asia, soon to be wholly-owned by Boral, has awarded a new contract to Claudius Peters Projects GmbH Germany for two gypsum calcining lines with a capacity of up to 30t/h to expand its gypsum wallboard production in Asia.
In Vietnam a fully-integrated line will be installed at the site of Lafarge Boral Vietnam Gypsum Co. Ltd near Ho Chi Minh City, extending the capacity of the current wallboard production line. The second line will be installed in Indonesia and will be part of an extension programme of the Cilegon installation of PT Petrojaya Boral Plasterboard.
Both of the lines consist of a Claudius Peters Mill EM59-585 along with the auxiliary equipment and controls of a complete raw material handling, gypsum calcining and cooling system.
Lafarge sells gypsum-making JV to Boral
17 August 2011Asia: French cement group Lafarge has announced that it has completed the signing of a deal to sell to its Australian peer Boral its stake in their 50/50 gypsum-producing joint venture Lafarge Boral Gypsum Asia (LBGA) for USD619.4m.Thanks to the sale, Lafarge will exceed its target to divest assets worth USD1.08bn in 2011.
The transaction is part of Lafarge's plan to reduce debt and is due to be finalised by the end of 2011. The plan has already seen assets in South America and Europe transferred to Etex and Australian operations sold to Knauf.
LBGA has 2100 employees spread across 20 production sites and registered sales of USD260.8m in 2010. Its earnings before interest, tax, depreciation and amortisation (EBITDA) were USD44.7m in 2010. This latest deal means that Lafarge now only has gypsum assets in North America.
Boral moves on Queensland but where next?
21 July 2011World: With Boral's recent acquisition of Sunshine Coast Quarries, the company has spent USD250m in Queensland since April 2011. Boral's head of strategy and mergers and acquisitions, Matt Coren, said this move did not necessarily reveal a special focus on the state (or indeed on cement and concrete), saying, "You'll see us continue to invest in other markets."
Boral's recent acquisition spree, along with Coren's comments, has raised speculation that the group may be eyeing up bigger and more lucrative offshore investments. Following the decision by France's Lafarge to sell 80% of its European gypsum assets to Etex Group (announced on 14 July 2011 – read full story here), the spotlight has again swung to the possibility that Boral may be considering the French gypsum and plaster company's Asia-Pacific and North American assets. Boral and Lafarge have an existing joint venture plasterboard business in Asia and it is thought the Australian building group would like to increase its 50% stake or even buy out its partner entirely.
Credit Suisse has indeed recently labeled Boral as the 'natural owner' of Lafarge's remaining gypsum assets. Rohan Gallagher, an analyst with Credit Suisse said that Boral would need to raise equity to do the deal, but expressed doubt that facilities in the United States and Mexico (including six wallboard plants with over 300Mm2/yr wallboard capacity), would not be a wise choice for Boral in the present climate.
Nomura analyst Simon Thackray said that if Boral could increase its stake in the Asian joint venture by a further 10% and purchase a 60% interest in Lafarge's US business the group would need to spend about USD300m, which could be heavily dilutive.