Gypsum industry news

US: USG’s operating profit fell by 30% year-on-year to US$190m in the first nine months of 2018 from US$270m in the same period in 2017. The building materials company blamed this on rising costs in the third quarter, arising from transport costs and non-production costs linked to its Customer-First strategy. Despite this, net sales rose by 6% to US$2.52bn from US$2.37bn.

The company is currently being acquired by Germany’s Knauf. The takeover is expected to complete in early 2019. In its third quarter financial report USG said that Boral had started proceedings in late August 2018 to determine the value of the USG Boral joint venture. This process could lead to Boral exercising its right to purchase USG’s 50% interest in USG Boral.

US: USG shareholders have approved an agreement and plan to accept Knauf’s takeover of the company. Approximately 99% of all votes cast voted in favour of the adoption of the agreement, representing approximately 88% of all outstanding shares as of 21 August 2018. Adoption of the merger agreement by USG stockholders is a condition to the closing of the merger. The merger is subject to certain other customary closing conditions, including receipt of regulatory approvals. The company currently expects the deal to close in early 2019.

US: Saint-Gobain North America has appointed Robert Panaro as its chief financial officer (CFO) and Senior Vice President of Finance. He previously worked as Vice President and CFO of CertainTeed, Saint-Gobain’s largest subsidiary in North America, and brings more than 25 years of experience to his new role. In his current role, Panaro will be responsible for overseeing mergers and acquisitions, capital investments and financial services in North America. He assumed the position earlier this year, succeeding Philippe Nouailhac as Senior Vice President of Finance and CFO for Saint-Gobain North America.

Panaro graduated from Boston College and holds a Bachelor of Science in management with a concentration in accounting and finance. He has served on the board of directors for the Grid Company, a joint venture between CertainTeed and Bailey Metals, Merit Abrasives and EcoTarium, a Natural Science Museum in Worcester, Massachusetts.

US/China: The Office of the US Trade Representative has started implementing a 10% tariff on mineral and other products from China, including gypsum products, following a consultation period. Mineral products affected by the proposed tariffs of interest to the gypsum wallboard industry include gypsum, anhydrite and plaster products made from calcined gypsum or calcium sulphate. Lime, cements and additives for cements, mortars and concretes are also affected.

The latest tariff list follows an earlier decision by the US government to tax imports from China worth US$34bn that came into force in early July 2018.

US: Data from the US Geological Survey (USGS) shows that consumption of calcined gypsum rose by 2.95% year-on-year to 8.38Mt in the first half of 2018 from 8.14Mt in the same period in 2017. Production rose by 3.05% to 8.44Mt from 8.19Mt. However, consumption of all gypsum fell by 1.47% to 20.1Mt from 20.1Mt with a decrease in mined gypsum and an increase in imported gypsum. Calcined gypsum used for board products rose by 2.94% to 10.5Mt and the total supply of board products rose by 3.11% to 1.17Bnm².

US: Taishan Gypsum and its owner China National Building Material Company (CNBM) have reached a US$1.98m settlement in one of its on-going legal cases related to alleged defective gypsum wallboard. The Chinese manufacturer says that it has reached settlement with the plantiffs. The case is a third-party claim initiated by original claimants Venture Supply and Porter-Blaine. Following receipt of the payment the plantiffs have agreed to waive all liabilities with respect to Taishan Gypsum.

US: L&W Supply Corp., a distributor of gypsum wallboard, ceiling systems, steel framing and other building materials for contractors, has announced the acquisition of Rose & Walker Supply.

Rose & Walker is a five-branch distribution company based in Columbus, Ohio. The family-owned business started in 1986 and provides wallboard products, metal studs, ceiling systems and insulation. Rose & Walker has branches in Bloomington, Columbus, Lafayette, Indianapolis and Terre Haute.

L&W says that, as a leading distributor of interior building products, the acquisition supports its overall growth strategy. With this acquisition, L&W now operates 163 locations in 35 states.

China/US: China’s Ministry of Commerce has proposed placing retaliatory tariffs on products from the US, including gypsum and gypsum products. The list covers 5207 items and proposes adding import taxes of up to 25% on them. It includes gypsum and gypsum wallboard. The ministry said that the new tariffs will take effect at a date to be announced later on.

US: Continental Building Products’ net sales in the second quarter of 2018 have risen due to higher gypsum wallboard sales volumes driven by ‘strong’ demand. The company reported an 11.6% increase year-on-year on wallboard volumes to 67Mm² from 60Mm². Its net sales rose by 6% to US$256m in the first half of 2018 from US$241m in the same period of 2017. Its net income rose by 44% to US$35.5m from US$24.6m.

US: USG has blamed falling operating profits on costs relating to its ‘Customer-First’ strategy and rising general costs, including those from transportation. Its operating profit fell by 32% year-on-year to US$121m in the first half of 2018 from US$179m in the same period in 2017. Its net sales rose by 6% to US$1.67bn from US$1.58bn.

For its wallboard and surfaces business the company said that its wallboard price increased by 2% from the second quarter of 2017 due mostly to a price increase in January 2018. Wallboard sales volumes increased by 2% compared to the second quarter of 2017. However, wallboard costs were US$12m higher than the previous year primarily due to rising input and transportation costs.

The building materials producer confirmed that its merger with Germany’s Knauf is expected to complete in early 2019, subject to shareholder and regulatory approval.