Gypsum industry news

US: USG Corporation has been named by EHS Today as one of its 2015 America's Safest Companies. The award recognises 16 companies that have demonstrated innovative solutions to safety challenges, exhibited strong management support and employee engagement programmes and achieved injury and illness rates lower than average for their respective industries.

"We are proud to be recognised by EHS Today for our dedication to creating the safest environment possible for our 9000 employees around the world," said Brian Cook, Senior Vice President and Chief Administrative Officer at USG. "Safety is a core value of our organisation and every employee is committed to working safely; every minute, every task and every day."

USG's manufacturing facilities routinely operate at five to 20 times better than industry safety norms. Twelve of the company's 34 US manufacturing locations and three of its L&W Supply distribution facilities have applied and qualified for the Operational Safety and Health Administration's (OSHA) Voluntary Protection Programme (VPP) Star status. To attain the Star designation, USG employees and management work with OSHA to implement safety and health programmes and processes that go beyond regulations to further protect employees and promote safe operations.

"We developed and adhere to safety guidelines that exceed industry standards and regulations," said Paul Haney, Vice President, Global Safety and Health and Employee Relations and Chief Labour Counsel at USG. "At USG, we strive to create an injury-free workplace and model safe behaviours for our families, colleagues, customers and communities."

US: Kodiak Building Partners, in a switch from its past practice of buying established companies, has announced the creation of a new business: Freedom Materials, a distributor of wallboard and related materials in Newark, Delaware. Freedom will be led by Silvio Ferrari, who Kodiak CEO Steve Swinney said 'brings nearly 25 years of excellence in serving customers in the building materials industry.' Freedom will be Kodiak's first operation in the Mid-Atlantic. Its other gypsum companies are New England Building Supply, Colorado's Jones-Heartz Drywall and the Dallas-Fort Worth area's Architectural Opening Professionals.

US: Londonderry-based Wallboard Supply Co, part of US LBM, has acquired Vermont-based Poulin Lumber. Poulin, based in Derby, Vermont, has supplied building products and hardware to homeowners and contractors since 1936. It has four locations in northern and central Vermont and sells engineered wood and wall panels, gypsum wallboard, insulation, roofing, moulding, windows, doors, fasteners, tools, kitchen and bath cabinetry and fixtures, as well as numerous lines of hardwood and laminate floors.

US: The Port of Monroe and DTE Energy have officially announced a partnership for the port to manage synthetic gypsum, a by-product of the Monroe Power Plant in Michigan.

"This is more than an agreement, but a partnership for mutual prosperity," said Paul C LaMarre III, Port Director. The partnership will bring new jobs to the community and help grow the economy, officials said. About 30 full-time jobs will be created. The port will build a 24,000ft2 storage building on its property, allowing gypsum customers to have direct shipping access to the material year-round.

Brian Rice, Director of the Monroe Power Plant, said that the company has been seeking a partner for a while to manage gypsum. "We wanted to work with someone locally," said Rice.
The Monroe Power Plant is one of the five-largest coal plants in the country and is the only plant in Michigan operating the flue gas desulfurisation system. "The advantage to this agreement is that it allows us to recycle all of it," said Rice about the gypsum.

In 2014, DTE recycled more than 350,000t of gypsum. Monroe Mayor Robert E. Clark called the partnership 'a great opportunity' between partners who have already had a long established relationship. "Outbound cargo is being generated and our community is better for it," said LaMarre.

US: Continental Building Products' net sales fell to US$108m in the third quarter of 2015 from US$114m in the same period of 2014. Its adjusted earnings before interest, taxes, depreciation and amortisation was flat at US$33.7m. Wallboard sales fell by 3.9% year-on-year to 590Mm2, while the average sales price fell by 0.7%, mainly due to the weaker Canadian Dollar and regional sales mix. Gross profit grew by 7.2% year-on-year to US$30m, primarily as a result of strict cost controls and favourable energy costs. Operating income fell to US$11.1m from US$20.2m in the same quarter of 2014.

US: Eagle Materials has reported its financial results for the second quarter of its 2016 fiscal year, which ended on 30 September 2015. Its revenue grew by 16% year-on-year to US$329m and its net earnings fell by 41% to US$29.8m, reduced by US$26.2m post-tax due to non-routine items related to the oil and gas proppants segment. Eagle Materials' adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) grew by 14% to US$110m.

Eagle's construction products and building materials businesses continued to perform well during the second quarter of 2016, with the Cement and Paperboard businesses reporting record quarterly operating earnings and the wallboard, concrete and aggregates businesses reporting year-on-year improvements. Demand for building materials and construction products remains strong in each of its regional markets. Cash flow from operations improved by 12% and was used to fund the Skyway acquisition, make capital improvements, pay dividends, reduce debt and repurchase shares.

The decline in oil prices during the summer adversely impacted US oil and gas drilling activity, leading to further reductions in demand and pricing for proppants. As a result, it recorded impairments to several intangible assets originally booked in connection with its acquisition of CRS Proppants and revalued downward certain raw sand inventory values. The impairments and inventory revaluation charges totalled approximately US$37.8m pre-tax.

Gypsum Wallboard and Paperboard reported second quarter 2016 operating earnings of US$48.1m, up by 7% year-on-year. Improved Gypsum Wallboard and Paperboard sales volumes were the primary drivers of the quarterly earnings increase. Gypsum Wallboard and Paperboard revenues for the second quarter grew by 8% to US$143m. The revenue increase reflects higher Gypsum Wallboard and Paperboard sales volumes slightly offset by a 1% decline in the average Gypsum Wallboard net sales price. Gypsum Wallboard sales volume for the quarter grew by 9% to 619Mft².

US: USG Corporation has reported that, on a consolidated basis in the third quarter of 2015, its net sales were US$972m, consistent with the third quarter of 2014.

On an adjusted basis, USG's net sales increased by US$20m or 2%. Operating profit improved by US$80m to US$102m. USG's adjusted operating profit was US$115m in the third quarter of 2015, an US$8m increase from the third quarter of 2014. USG generated US$76m in net income in the third quarter of 2015, compared to a net loss of US$12m in the third quarter of 2014. On an adjusted basis, net income of US$76m increased by US$14m from the third quarter of 2014. Foreign currency unfavourably impacted consolidated net income by US$8m in the third quarter of 2015. Adjusted results exclude results from Gypsum Transportation Limited (GTL) a shipping operation which USG has exited, litigation settlement charges and impairment charges were all recorded in the third quarter of 2014.

USG's gypsum segment generated US$89m of operating profit in the third quarter of 2015. On an adjusted basis, operating profit of US$89m improved by US$4m over the third quarter of 2014, led by the US gypsum business. Wallboard provided US$7m of improved operating profit, while the surfaces and substrates businesses contributed US$6m in incremental profit. These improvements were offset by US$5m of increased selling, general and administrative spending due to the timing of projects and costs incurred, as well as a US$4m unfavourable foreign currency impact.

The USG Boral business generated US$12m of equity income in the third quarter of 2015, consistent with the amount earned in the third quarter of 2014. On a currency-neutral basis, the USG Boral business earned US$15m of equity income, a US$3m improvement over the 2014 quarter.

"We saw margin expansion in our gypsum, distribution and USG Boral businesses, notwithstanding softer than expected demand," said James S Metcalf, Chairman, President, and CEO. "In the third quarter we saw improvements in wallboard, strong contributions from our surfaces and substrates businesses, organic margin growth in distribution and continued expansion in USG Boral. With our focus on controlling costs, we are well positioned to take advantage of an improving demand environment going forward."

US/Canada: Wynnchurch Capital Ltd, a US-based private equity firm, has made a growth equity investment in Canada's Gypsum Technologies Inc.

US: Workers have been constructing a new facility to process by-products from FirstEnergy Corp's coal-fired power plant as the company makes a major change in how it disposes of industrial waste. Some of the plant's by-product is already sold and reused by National Gypsum, which takes about 500,000t/yr of synthetic gypsum for wallboard production.

The Ohio-based company plans to have the project ready for use at the end of 2016, when the company has agreed to halt the use of the residual waste impoundment known as Little Blue Run, which many neighbours have alleged has leaked hazardous waste and released noxious odours.

When the Bruce Mansfield plant removes sulphur dioxide from its emissions, it creates coal combustion by-products. FirstEnergy has been depositing much of the by-product in Little Blue Run, West Virginia. However, the state Department of Environmental Protection sued in 2012 over leaks and threats to groundwater. As part of a settlement, the company agreed to no longer use Little Blue Run by the end of 2016.

James Fitzgerald, Manager of major projects, said that new disposal sites for materials treated by the new dewatering facility will be different. "That landfill will have different regulations, different requirements. There are liners associated with it. So it's a whole different process," said Fitzgerald.

With the new facility, FirstEnergy will process 2.5 – 3.5Mt/yr of by-product, which consists of fly ash, sulphur and lime. It will be processed at the new facility, where water will be removed. The water from the process will then be reused at the plant, said Jim Graf, Director of the Bruce Mansfield plant. Once the new facility processes the by-product, it will be moved by barge to another site. The new project will cost more than US$200m.

US: Transnational Group has entered into a mining lease agreement with the Nevada Outdoor School (NOS) to secure full rights to mine gypsum on several claims located in southern Nevada that comprise the Mount Vista Gypsum property.

According to the agreement, Transnational has acquired full mining rights of any gypsum that is located on the Mount Vista property in exchange for a production royalty. There are 12 claims included in the lease agreement that comprise a total of 1.86km². The term of the company's mining lease for Mount Vista is 10 years with three five-year renewable options.

"Transnational is excited to announce the finalisation of our agreement with the Nevada Outdoor School that will allow us to mine gypsum and limestone contained in Mount Vista at an agreed upon royalty. This agreement enables the possibility of discovery and mining other valuable minerals and metals as well," said CEO of Transnational Group, Philip Dutoit. The agreement stipulates that the company will negotiate a separate royalty agreement with the NOS for each resource.