Gypsum industry news

US: United States Gypsum (USG) has applied for a permit to withdraw up to 2.11 million litres/day of water for a gypsum plant near Crystal River in Florida. However, company spokesman Robert Williams said that the plant is not planned in the immediate future.

USG's permit application is pending with the Southwest Florida Water Management District. The district has sent USG a letter seeking more information to make sure that the planned withdrawals won't cause salt-water intrusion or otherwise harm the groundwater.

In 2011 USG purchased 72 hectares near the Progress Energy Florida power complex north of Crystal River to warehouse synthetic gypsum that is created by scrubbers at the coal-burning plants. Progress, whose parent company is Duke Energy, has a contract to sell the gypsum to USG, which is planning to build a warehouse sometime in 2013 to store the product until it is shipped to a wallboard manufacturer.

"USG proposes to construct a state-of-the art facility that is projected to bring 130 new jobs to the area and will incorporate water conservation to the greatest extent feasible," the company's consultant, Progressive Water Resources, wrote in its application letter to the water district. The letter requests a 20-year permit and states it is still negotiating for easements to the well sites and a pipeline that would transport water from the well to the manufacturing centre.

US: The US-based building materials provider Eagle Materials has reported financial results for the third quarter of the 2013 fiscal year, which ended on 31 December 2012. These showed that its revenue was up by 33% compared to the same period of the prior fiscal year. Earnings per share were up by 429% year-on-year.

Eagle's third quarter sales volumes improved across all business lines, with sales prices improving in all but one of it business lines. Its gypsum wallboard segment experienced the most significant improvement, with an increase in average net sales prices of 27% as compared with the same quarter of the prior fiscal year.

Eagle's Gypsum Wallboard and Paperboard division's third quarter operating earnings of US$24.8m were up by 362% compared to the same quarter of the 2012 fiscal year. Higher wallboard average net sales prices, higher gypsum wallboard and gypsum paperboard sales volumes and lower recycled paper input costs were the primary driver of the quarterly earnings increase.

Gypsum wallboard and paperboard revenues for the third quarter were US$100.3m, a 37% increase from the same quarter a year ago. The revenue increase reflects primarily higher wallboard average net sales prices and sales volumes. The average gypsum wallboard net sales price for the third quarter was US$120.55/1000ft2, 27% greater than the same quarter a year ago. Wallboard sales volume for the quarter of 519Mft2 represents a 23% year-on-year.

US: USG Corporation (USG) has reported its results for the fourth quarter of 2012 and for the year as a whole. These results showed that sales had increased by 12% to US$815m in the final quarter of the year, but that USG also made an operating loss of US$8m. This, however, was lower than the US$43m that it lost in the final quarter of 2011. The group's adjusted operating profit was US$5m, versus a US$38m adjusted operating loss in the 2011 quarter, but it made a net loss of US$13m. This compares favourably to the 2011 quarter, when it made a loss of US$100m.

In terms of sales, its US gypsum wallboard shipments came to 1.22Bnft² against 1.09Bnft² in the 2011 quarter. The average price was US$132.26/1000ft² ­up from US$112.59/1000ft² in the same period of 2011. USG also announced that its SHEETROCK Brand UltraLight Panels accounted for 49% of all of its US wallboard shipments for the period.

The Corporation recorded full year 2012 net sales from continuing operations of US$3.2bn, an operating profit from continuing operations of US$73m and a net loss of US$126m. For the full year 2011, net sales from continuing operations were US$2.9bn, the operating loss from continuing operations was US$206m and its net loss was US$390m.

"Our wallboard results were the strongest we have seen in over three years, and we achieved our fourth consecutive quarter of positive adjusted operating profit," said James S Metcalf, Chairman, President and CEO. "The results show that commercial markets remain choppy, but we continue to see signs of a housing recovery."

US: Gypsum production in the US has increased by 11% to 9.9Mt in 2012 compared to 8.9Mt in 2011, according to a report from the United States Geological Survey (USGS). The USGS attributed this rise to increases in activity in the US housing and construction markets.

In its Mineral Commodity Summary for Gypsum in 2012, the USGS reported that the apparent consumption of gypsum increased by 4% to 24.6Mt in 2012 compared to 23.7Mt in 2011. Wallboard products sold rose slightly from 1.60BM2 in 2011 to 1.63BM2 in 2012. Overall, 47 companies produced gypsum in the US at 54 mines and plants in 34 States. Approximately 90% of domestic consumption, with a total of approximately 22Mt, was accounted for by manufacturers of wallboard and plaster products. At the beginning of 2012 the production capacity of operating wallboard plants in the US was about 3.07BM2/yr.

In its overview of the industry the report commented that the US ranked fourth in the world for gypsum production after China, Iran and Spain. An increased use of wallboard in Asia, coupled with new gypsum product plants, spurred increased production in that region. The report expected that the worldwide production of gypsum would rise driven by the increasing popularity of wallboard due to its economy and efficiency.

Lastly, it was noted that if the construction of wallboard plants designed to use synthetic gypsum from flue gas desulfurisation (FGD) units continues this will result in less mining of natural gypsum. The availability of inexpensive natural gas, however, may limit the increase of future FGD units and, therefore, the production of synthetic gypsum.

US: Legislation intended to better regulate the use of wallboard in homes and buildings is headed to the desk of US President Barack Obama, several years after the emergence of the 'toxic' Chinese wallboard saga.

The US House of Representatives approved the Drywall Safety Act of 2012 on 1 January 2013, amid the chaos regarding the 'fiscal cliff.' It approved the measure on an overwhelming 378-37 vote.

In December 2012 Senator David Vitter successfully pushed a Senate amendment to loosen some of the bill's language and to win the support of the National Association of Home Builders, which had previously opposed the bill. Once the bill was amended, it sailed to congressional approval.

"Many families were faced with the nightmare of building or repairing their homes with toxic wallboard after Hurricane Katrina and I want to make sure this doesn't happen again. This is good news for homeowners that we were able to pass this swiftly before the new Congress starts," said Vitter on 2 January 2013. "This legislation will make sure unsafe wallboard won't be sold in the future and that wallboard manufacturers are held accountable."

The Drywall Safety Act sets chemical standards for domestic and imported wallboard, and also establishes guidelines for its disposal. The bill allows the Consumer Product Safety Commission to set rules to ensure that existing 'toxic' wallboard is properly disposed of. The legislation also requires all wallboard used in the country to be labeled with the manufacturer's name.

US: On 13 December 2012 USG Corporation, its subsidiary United States Gypsum Company and seven other wallboard manufacturers were named as defendants in a purported class action complaint filed in the United States District Court for the Northern District of Illinois by Sierra Drywall Systems, on behalf of itself and others similarly situated.

The complaint alleges, among other things, that the defendants unlawfully conspired to fix the price for gypsum wallboard sold in the United States through price increases for the years 2012 and 2013 and the elimination of job quotes. USG believes that the suit is without merit and has denied that it participated in any alleged conspiracy or has engaged in unlawful conduct.

US: National Gypsum and Recycled Energy Development (RED) has announced the opening of a combined heat and power (CHP) project at National Gypsum's Burlington, New Jersey, facility. The project produces approximately 3.4MW of electricity and delivers more than 30MMBtu/hr of thermal energy, resulting in an overall efficiency of greater than 90%.

"CHP is benefitting our company's bottom line," said John Corsi, vice president of Manufacturing Operations and Engineering at National Gypsum. "This facility allows National Gypsum to further strengthen our competitiveness, increase our reliability, as well as improve our environmental stewardship."

RED's cogeneration system provides power and thermal energy to National Gypsum's wallboard production facility, reducing its costs, energy-intensity, and greenhouse-gas emissions. The system captures excess heat from the gas turbine's combustion and uses it within the board dryer to dry wallboard.

The project benefitted from a US$1.3m competitive grant administered by New Jersey's Economic Development Authority and Board of Public Utilities.

US: Eagle Materials has reported a rise in revenue of 22% to US$165m for the quarter that ended on 30 September 2012. Previously the company reported $135m for the same period in 2011. Eagle also reported a rise in net earnings of 66% to US$18m in the second quarter of 2012 from US$6.03m in 2011.

The North American building materials producer's Gypsum Wallboard business benefited in the quarter from higher wallboard average net sales prices and higher gypsum wallboard sales volumes. Revenue for the Gypsum Wallboard business increased by 34% to US$77.3m from US$51m. Operating earnings increased to US$16.5m from a loss of US$2.54m in the same quarter in 2011. Wallboard sales volumes increased by 24% to 500MMSF from 403MMSF.

In September 2012 Eagle entered into a definitive agreement with Lafarge North America to purchase Lafarge's Sugar Creek, Missouri and Tulsa, Oklahoma cement plants, as well as related assets, for its cement business. The purchase price was US$446m. The acquisition is expected to close by December 2012.

US: USG Corporation has reduced its net loss in the third quarter of 2012 by US$86m, to US$29m from US$115 in the same quarter in 2011.

In August 2012 USG announced it had entered into an agreement to sell its European operations to Knauf. Results from European operations have been reported as discontinued operations for the 2012 and 2011 periods.

The corporation reported a year-on-year rise in its net sales from continuous operations of 9% in the third quarter of 2012, to US$828m from US$763m. Its operating profit from continuing operations for the third quarter of 2012 was US$29m compared to a US$79m operating loss in 2011.

Discontinued or European operations reported net sales of US$27m in the third quarter of 2012 compared to US$29m in 2011. Discontinued operating profit was US$1m in 2012 compared to US$3m.

"The announced sale of our European operations is another great example of USG's Plan to Win. Completion of this sale will allow us to reallocate assets from a lower-growth market to joint ventures supporting higher-growth markets in India, which will allow us to diversify the company's earnings and offset some of the cyclicality in our core businesses," said, president and CEO, James S Metcalf, Chairman. Metcalf added that wallboard demand remains 'significantly' below previous levels.

USG wallboard shipments rose by 14% year-on-year in the third quarter of 2012, to 366Mm² from 320Mm² in 2011. Sheetrock brand UltraLight panels accounted for 47% of all USG wallboard shipments in the United States.

US: From the start of 2013 Progress Energy Florida has contracted to sell its entire output of synthetic gypsum produced at its Crystal River Energy Complex in Florida to United States Gypsum (USG).

Crystal River 4 and Crystal River 5, the two newest coat burners at the energy complex, produce 450,000t/yr of synthetic gypsum. Scrubbers were added to Crystal River plants 4 and 5 in 2009 and early 2010. Currently the byproduct is sold for use in making wallboard, cement and fertiliser.

A conveyor belt will be constructed to move the material from the Crystal River power complex to USG's adjacent property. USG purchased the 72ha site in 2011. It announced at the time it would be a storage facility to warehouse synthetic gypsum from the power plants.

Spokesman Scott Sutton from Duke Energy, owner of Progress Energy, emphasised that contract is for USG to take the synthetic gypsum to their property and store it until they ship it or use it. "One customer will remove it all; if we produce more they will have to take it and we have to produce a certain amount. It is a good deal for both of us."

"It is still pretty early in the process yet," said USG spokesman Bob Williams, referring to the plans for the Crystal River property. "It has gone beyond the design stage but construction has not started yet. It is not expected to be complete until sometime in 2013." He added that Crystal River will only be a transfer site and USG has no near-term plans to build a manufacturing plant at the site.