Gypsum industry news

Georgia-Pacific officially opened its new gypsum wallboard plant at Sweetwater in Texas earlier this month. The US$325m project is situated next to the company’s existing plant at the site, Sweetwater West, on the other side of a road. Canada-based Gyptech said in 2021 that it was supplying the equipment for the new high-speed line at the site.

When Georgia-Pacific first announced the new project in 2020, it mentioned that it would be able to keep its logistics costs low, use raw gypsum reserves and the existing workforce. Despite this, the plant has still created over 100 new jobs. The company also said that it anticipated closing its 60Mm²/yr Quanah plant, also in Texas, depending upon market conditions. This came to pass in March 2023. Altogether, both plants at Sweetwater will have a production capacity of around 93Mm²/yr. This implies that the new plant has a production capacity of around 60Mm²/yr, given that the existing plant’s capacity is 30Mm²/yr. Funnily enough this is the same as the Quanah plant.

The new plant at Sweetwater may be a sign that the US wallboard market is picking up again. Georgia-Pacific has invested some serious money and it is targeting Texas, a leading area for construction nationally. However, it does come with a few caveats. Firstly, the new plant at Sweetwater is replacing existing capacity at Quanah. Secondly, it is using some of the advantages of the existing plant such as its trucks and its proximity to its customers. This suggests that the company may be wary of building a new plant in a greenfield location with all the potential risks that might involve.

US wallboard sales have regularly peaked and troughed over the decades, like many other commodity markets, as demand and production capacity race each other. Sales of wallboard peaked around the year 2000 and then again in the mid 2000s before tailing off following the 2007 recession. They have been recovering ever since and started to get close to the levels seen in the first half of the 2000s in 2022 when the United States Geological Survey (USGS) reported wallboard sales of 2.6Bnm².

Generally, the last tranche of new wallboard plants in the US were built or approved in the late 2000s before the financial downturn. These new sites included CertainTeed’s Roxboro plant in North Carolina and the Moundsville plant in West Virginia, Gold Bond Building Products’ Mount Holly plant in North Carolina and American Gypsum’s Georgetown plant in South Carolina. From this point though various plants were either closed or mothballed. Some of the latter have been restarted as the market slowly recovered. New plant projects in the 2010s tended to be upgrades or replacements. One example of this was USG’s plan to rebuild a production line at its Jacksonville plant in Florida, which was announced in late 2017 before Knauf took over the company in 2018. Another was National Gypsum’s scheme to reopen its Wilmington plant in North Carolina in 2019. At the same time in the 2010s there were a number of mergers and acquisitions including Lafarge’s sale of its gypsum business in North America in 2013, Knauf’s takeover of USG in 2019 and Saint-Gobain’s acquisition of Continental Building Products in 2020.

When Georgia-Pacific started building the new plant at Sweetwater in 2020 this marked the start of a new phase of US wallboard plant projects. American Gypsum announced plans for an upgrade to its Albuquerque gypsum wallboard plant in 2021, Gold Bond Building Products started building its long-delayed Eloy plant in Arizona in 2022 and it said it was spending US$90m on an upgrade to its Mount Holly gypsum wallboard plant in North Carolina in 2023, and CertainTeed revealed it wanted to build a second production line at its Palatka gypsum wallboard plant in Florida also in 2023.

Congratulations are due to Georgia-Pacific for the achievement at Sweetwater. Optimism for the US market in general may also be in order given the slow but steady stream of projects that have been announced and completed since 2020. The next step, when a company builds a new wallboard plant at a greenfield site in the US, looks set to happen when Gold Bond Building Products completes its Eloy plant.

US: Eagle Materials sold 139Mm² of gypsum wallboard during the first half of its 2024 financial year (1 April 2023 – 30 September 2023), a decrease of 5% year-on-year from 147Mm² in the same period in the 2023 financial year. This contributed sales worth US$428m, down by 2.9% and corresponding to 35% of total group sales. Overall, group revenue rose by 4.9% to US$1.22bn.

President and chief executive officer Michael Haack said "Market conditions for our construction materials remained resilient during the quarter, even as the Federal Reserve continued to raise interest rates and tighten money supply to contain inflation. Several factors helped offset the higher rates and supported demand for wallboard, including limited housing supply, strong homebuyer demand, increasing infrastructure awards and significant investment in domestic manufacturing facilities.” Haack added “the backlog of housing construction supported resilient wallboard shipments and orders, but we recognise the significant increase in interest rates may have an impact on residential construction activity in the future. Nonetheless, we expect that our portfolio of businesses will remain well-positioned for the second half of fiscal 2024."

US: Beneficial Reuse Management (BRM) has acquired Pennsylvania-based gypsum wallboard recycling firm USA Gypsum (USAG).

BRM board chair Dave Schuurman said “The acquisition of USAG gives BRM an opportunity to further diversify our sources of gypsum to include recycled scrap wallboard, as well as to grow our geographic footprint. USAG’s operations will complement our existing gypsum processing operations, which provide gypsum in pelletised form to agricultural and other markets. This acquisition aligns perfectly with our mission of providing sustainable solutions for the management of industrial byproducts to divert materials away from landfills.”

US: Georgia-Pacific has officially opened its new gypsum wallboard plant at Sweetwater in Texas. The project had a budget of US$325m and it is the first new wallboard plant that Georgia-Pacific has built since 2004.

David Neal, president of Georgia-Pacific Gypsum said “The two operations combined will supply customers and distribution partners with more than 92Mm² of gypsum products each year and create more than 100 new jobs. This investment strengthens Georgia-Pacific's capacity to meet growing customer needs in Texas' residential, commercial, and industrial construction markets.”

The new plant is adjacent to Georgia-Pacific’s first gypsum wallboard facility in Sweetwater, purchased by the company in 1996. The existing facility has been operating in Nolan County since the 1950s. Over the last year, Georgia-Pacific has invested approximately US$16m in technical and safety upgrades at the plant, including an Energy Optimization System (EOS), auto-guided vehicles (AGVs), an automated robotic riser system, auto-splicing equipment, and upgraded packaging equipment. It has also upgraded the employee facilities.

US: Saint-Gobain has acquired the remaining equity interest and assets of Seven Hills Paperboard, including a gypsum paper board liner manufacturing plant in Lynchburg, Virginia, from its joint venture partner WestRock. The purchase adds to the gypsum wallboard operations of Saint-Gobain’s CertainTeed Interior Products Group. The company said that the internal integration of gypsum paper board liner production represented a “significant” step in strengthening the supply chain for this material.

Mark Rayfield, President and Chief Executive Officer of Saint-Gobain North America and CertainTeed Canada said “The acquisition of these assets represents our continued commitment to our customers to provide quality gypsum wallboard products.” He added, “I would like to welcome our 80 new team members in Lynchburg and look forward to your contributions to our purpose, ‘To Make the World a Better Home.”

Canada/US: Saint-Gobain has signed a 15-year renewable electricity supply agreement (PPA) with TotalEnergies for the purchase of solar power for its 125 industrial sites in the US and Canada. This 100MW PPA, known as the Danish Fields Solar Project (Danish Fields), is expected to offset Saint-Gobain’s North American CO₂ emissions from electricity (scope 2 emissions) by 90,000t/yr. The project is expected to come online by the end of 2024.

Danish Fields is the third PPA signed in North America by Saint-Gobain. The first PPA, with the Blooming Grove Wind Farm in Illinois, was signed in 2020, and the second, with TotalEnergies’ Cottonwood Bayou Solar Project in Texas, was signed in 2022. All three projects have been supported by Edison Energy, a leading energy and sustainability advisory that consults with the largest commercial, industrial and institutional energy users.

Mark Rayfield, the chief executive officer of Saint-Gobain North America, said “With this agreement, Saint-Gobain North America will further reduce its CO₂ emissions, demonstrating how fast the manufacturing industry can transform when long term solutions are at hand. This renewable energy project is a new milestone on the way to meeting Saint-Gobain’s commitment to reduce scope 1 and 2 CO₂ emissions by 33% by 2030 - compared to 2017 - and to reach carbon neutrality by 2050.”

The three projects combined are expected to represent a reduction of more than 70% in Saint-Gobain North America’s scope 2 emissions, compared to 2017 levels.

North America: Saint-Gobain has signed a 100MW solar power purchase agreement (PPA), called Danish Fields, with TotalEnergies. The Danish Fields PPA will supply Saint-Gobain North America with solar energy for 15 years, commencing in 2024. Saint-Gobain says that it expects the PPA to eliminate 90,000t/yr of CO₂ emissions across its operations. This is the group’s third deal of its kind.

Saint-Gobain North America CEO Mark Rayfield said “With this agreement, Saint-Gobain North America will further reduce its CO₂ emissions, demonstrating how fast the manufacturing industry can transform when long term solutions are at hand. This renewable energy project is a new milestone on the way to meeting Saint-Gobain’s commitment to reduce Scope 1 and 2 CO₂ emissions by 33% by 2030 compared to 2017, and to reach carbon neutrality by 2050.”

US: Two members of GMS’ board of directors, Peter Browning and Teri McClure, have won national awards for corporate leadership. Browning won the National Association of Corporate Directors’ Lifetime Achievement Award, which recognises commitment to the improvement of corporate governance. Meanwhile, McClure won DirectWomen’s Board Excellence Award for women lawyers who have served with distinction.

GMS chair John Gavin said "On behalf of the entire board of directors of GMS, I congratulate Peter and Teri for these well-deserved honours. It is gratifying to see that organisations like these recognise the incredible talent that we on the board get to experience every day. The selections of Peter and Teri for these important distinctions speak not only to this level of talent but also underscore our commitment to the highest level of corporate governance standards and promoting diversity and corporate governance principles. We are fortunate to have directors of such high calibre serving on our Board and benefit from their extensive knowledge and experience."

US: Xeriant has hired the National Fire Protection Association (NFPA) and another accreditation agency to test its NEXBOARD waste plastic-based wallboard for the construction market. The producer says that tests will include the NFPA 286 and the ASTM E84 fire safety tests, as well as tests of tensile strength, hardness, water resistance, acoustic and thermal insulating performance, and volatile organic compound emissions.

One can tell that gypsum wallboard is a popular product because companies keep trying to devise alternatives to it. A recent one is Breathaboard. The company making it, Adaptavate, announced in August 2023 that it had generated around Euro2.3m in its latest investment round. It is building a pilot production line in Bristol in the UK and attempting to licence its Breathaboard product, amongst other plans. Its take on wallboard is being marketed as a sustainable substitute that is made from crop waste, that sequesters CO₂ and that then can be composted at the end of its life. It is also promoting the product’s breathability and moisture buffering capabilities, hence the name.

Another new contender hoping to steal some of the gypsum wallboard market is Xeriant’s Nexaboard product. This one uses plastic waste as its alternative to gypsum. Florida-based Xeriant said in July 2023 that it had started to buy equipment and raw materials, was running pilot production and was testing its first samples. It too is working on getting its product used in pilot construction projects.

Both of these examples, and others over the years, have taken a pop at wallboard’s sustainability credentials. Adaptavate is rather quieter about what happens to all of that sequestered CO₂ when its product is composted and Xeriant does not mention the environmental impact of making the plastic it uses in the first place. Yet, it is a valid question to ask how sustainable is gypsum wallboard? This column has covered issues with the supply of raw gypsum from either natural, synthetic or recycled sources previously, so we will stick to the general picture here.

The late-lamented consultant Bob Bruce pulled together data from various studies for the Global Gypsum Conference in 2019 to estimate the CO₂ emissions from wallboard production. He estimated that the global average of CO₂ production by wallboard was around 2.4kg/m², equating to 24Mt/yr of CO₂ for the global wallboard industry. For reference, it is estimated by the Center for International Climate and Environmental Research - Oslo (CICERO) that the process emissions from clinker production alone released around 1.6Gt/yr of CO₂ in 2022. When compared by mass (as opposed to area) to other building materials, wallboard has a lower carbon intensity than many products such as glass, cement (made from clinker), plastics, steel and plywood. Timber, concrete and brick are all better than wallboard though. However, as Bruce pointed out, a lot more concrete is manufactured than wallboard. Bruce came up with a handful of suggestions for how wallboard production could reduce its CO₂ emissions such as the reduction of slurry water, local delivery, co-generation, increasing drying efficiency and so on.

The two big sustainability trends from the sector over the last year have been the drive to support higher recycling rates of gypsum and a move towards ‘greener’ sources of energy. This can be seen in the growing use of electrical energy from renewable sources such as the production of net zero CO₂ gypsum wallboard at Saint-Gobain’s Fredrikstad plant in Norway from April 2023. The group’s Montreal plant looks set to follow in 2024 following an upgrade, potentially making it the first net zero wallboard plant in North America. Chiyoda-Ute in Japan has also started using renewably-sourced electricity at its plants in Japan, but it is uncertain what other energy sources these sites are using. China-based BNBM also claimed in its half-year results that it had built four “nearly zero emission” gypsum board production lines in the reporting period.

Wallboard's market position in North America, Europe and elsewhere seems secure. However, it is in dynamic tension as it is both a potential replacement for more carbon intensive building materials and it could also be susceptible to new emerging products that can improve on its own emissions. The manufacturers of Breathaboard and Nexaboard are clearly hoping for the latter. Yet, as is often pointed out, giving more market share to wallboard from other common building materials could reduce CO₂ emissions from construction massively. The diversification of traditional heavy building materials companies such as Holcim into light building materials in recent years suggests that some businesses are seriously preparing for this possibility. No doubt, if global wallboard usage does start to rise significantly, the pressure will grow to make wallboard more sustainable and to devise even more alternative board products.