Gypsum industry news

China: Financial analyst Jefferies has estimated that Chinese gypsum wallboard sales will retain their current strength despite a property sector crash following the collapse of developer China Evergrande. Dow Jones has reported that the analyst rated the gypsum wallboard industry as 20 - 30% exposed to effects in the property market. It contrasted this with other building materials such as float glass and coatings which are 50 - 70% exposed to the present fallout.

China: Sales revenue from China National Building Materials’ (CNBM) new materials business grew by 28% year-on-year to US$3.36bn in the first half of 2021 from US$2.63bn in the first half of 2020. Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) from the segment, which includes gypsum producers BNBM and Taishan Gypsum, rose by 66% to US$873m from US527m. The gypsum wallboard producers reported a combined sales volume increase of 41% to 1.12Bnm² from 0.79Bnm_². The group said that BNBM had also been working on the development of the first domestic automatic edge keel packaging machine for a ‘super large’ production line of gypsum wallboard with an output of 120Mm²/yr.

Overall across all business lines the group’s revenue grew by 14% to US$18.9bn from US$16.5bn in the same period in 2020. Adjusted EBITDA rose by 13% to US$3.98bn from US$3.51bn. Total revenue benefitted from particular gains from its New Materials and Engineering businesses.

China: Rui Silicone subsidiary Ruijiang has commissioned a new methyl hydrogen silicone oil RJ-202 plant in China following completion of a successful test run on 10 February 2021. The plant will supply the gypsum wallboard industry with methyl hydrogen silicone oil for use as a waterproofing additive. It will also produce hexamethyldisilazane RJ-HMDZ, hexamethyldisiloxane RJ-MM, heptamethyltrisiloxane RJ-HMTS and some other modified silicone oils.

China: France-based Saint-Gobain plans to establish ten gypsum wallboard plants under the Communist Party of China (CPC)’s 14^th five-year plan. China Daily News has reported that the move aims to ramp up production capacity in order to meet growing gypsum wallboard demand. In 2021 building materials company intends to open two more units to produce calcined gypsum in Yangzhou, Jiangsu Province and Huzhou, Zhejiang Province respectively.

Asia-Pacific regional senior vice-president and chief executive officer (CEO) Javier Gimeno said, “China has recovered from the Covid-19 pandemic in an exceptional manner. We have seen the quick recovery of the Chinese economy and the many industries that we serve. In our segment, the Asia-Pacific region has remained largely positive in the third quarter, driven by the continued strong demand in China." He added, “Our business growth in China is linked with the development of the Chinese society and the growth of China's middle-income earners, who are more demanding in terms of quality and performance of products.”

France: Saint-Gobain’s says its sales for June 2020 rose by 3.7% on a like-for-like basis as markets recovered from the effects of the coronavirus pandemic. Its sales fell by 12.3% year-on-year on a like-for-like basis to Euro17.8bn in the first half of 2020 from Euro21.7bn in the same period in 2019. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) decreased by 32.4% to Euro1.64bn from Euro2.42bn.

“In a macroeconomic and health environment which remains affected by uncertainties, our earnings growth in June and outlook for the third quarter suggest that our operating income for second-half 2020 will improve significantly on first-half 2020,” said Pierre-André de Chalendar, chairman and chief executive officer (CEO) of Saint-Gobain. He added that the group’s portfolio of products, including those in energy-efficiency and renovation markets, positioned it to benefit from national and European stimulus plans supporting energy saving initiatives.

The group noted a 19.2% year-on-year sales decrease in the second quarter of 2020 due to the coronavirus pandemic, with very different situations between countries and markets. Most of its business segments reported growth in June 2020 with the exception of Asia-Pacific, where the Indian market held the division back. Gypsum sales helped deliver ‘robust growth’ in the US and Canada in June 2020. Strong growth in gypsum was reported in Brazil for the first half of 2020. Chinese sales in gypsum benefitted in the second quarter of 2020 from a new plaster plant, which originally opened in 2019, reaching full production capacity. The group’s High Performance Solutions division reported positive trends from its external thermal insulation solutions (ETICS) products in the second quarter of 2020.

France: Saint-Gobain says that its overall group activity fell to 60% of 2019 levels in April 2020 due to the effects of the coronavirus pandemic. Since then its level of activity surpassed 80% ‘at comparable working days, with large variations by market and country,’ according to Regulatory News Service. The group expects a ‘challenging’ second quarter 2020 before a recovery in the second half of the year. It continues to preserve cash and reduce costs.

In Europe the group reported that, by the end of May 2020, Nordic countries had almost reached 2019 levels. Germany and Eastern Europe were still seeing activity levels below those of 2019. The UK has seen activity levels progress by around 10%/week since a low point in mid-April 2020 when activity were at a ‘virtual standstill’, reaching around 70% of 2019 levels in the last week of May 2020.

In the group’s Middle East & Africa region activity levels surpassed 50% of 2019 levels since a low in mid-April 2020. In France, activity in distribution came close to the 2019 level in the last week of May 2020, but with big differences by region and brand. Spain and Italy are picking up gradually, but remain below the average level of the region. The Netherlands remains close to a normal level of activity, while the Middle East and Africa remain impacted to varying degrees.

North America has reported a ‘contrasting situation state by state,’ but has shown improvement since the low point of mid-April 2020. Activity in May 2020 moved closer to 2019 levels due to ‘significant’ volumes in exterior solutions and a rebound in gypsum volumes. In Latin America, despite the health situation remaining difficult, activity is picking up week after week, from 40% in mid-April 2020 to around 80% in May 2020 with a ramp-up in Brazil.

In Asia-Pacific sales have now reached 2019 levels following the gradual restart of all its production sites in China in March 2020. India remains ‘severely’ disrupted with the restart dependent on the relaxing of confinement measures. The situation is varied across South-East Asia with a rebound in Vietnam where activity has surpassed 2019 levels, but disruptions still relatively significant in Thailand and neighbouring countries.

China: Beijing National Building Materials (BNBM) recorded a net profit of US$62.3m in 2019, down by 82% year-on-year from US$348m, ‘mainly caused by settlement fees.’ Its profit after deduction of non-recurring profit and loss was US$335m, down by 7.0% from US$359m in 2018. Its revenue rose by 6.0% to US1.88bn from US$1.77bn.

BNBM’s gypsum wallboard sales volumes were 1.97Bnm², up by 5.2% year-on-year from 1.87Bnm². This corresponds to a 2019 Chinese market share by volume of 59%.

China: Mainland China's leading cement producer Conch Cement has announced that it is seeking bidders for a gypsum supply contract. The contract will cover the supply of synthetic gypsum produced by flue gas desulphurisation (FGD) between 1 February 2020 and 31 July 2020.

Australia: USG-Boral’s earnings have fallen due to a poor construction market in South Korea. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 6% year-on-year to US$170m in the financial year to 30 June 2019 from US$181m in the previous year. Its revenue grew by 2% to US$1.08bn from US$1.06bn. The joint venture said that, excluding South Korea, earnings were ‘steady’ as lower earnings from Indonesia, China and the Philippines were offset by increased contributions from Thailand, Vietnam and India, as well as a continued strong contribution from Australia.

The company also announced that Boral has entered into an agreement with Germany’s Knauf to form an expanded 50:50 plasterboard joint venture in Asia and for Boral to return to 100% ownership of USG Boral Australia & New Zealand. Completion of the deal is subject to regulatory approval. It follows the acquisition of USG by Germany’s Knauf in early 2019.

US: China National Building Material Company (CNBM) has proposed paying US$248m in one of its on-going legal cases related to alleged defective gypsum wallboard sold by Taishan Gypsum. This latest settlement agreement covers plaintiffs not previously covered by the Amorin Case, those in the Brooke Case and all other property owners with Chinese gypsum board alleged to be attributed to Taishan and connected partners. The settlement is dependent on all parties signing the agreement.