Gypsum industry news

US: USG says that the Science Based Targets initiative (SBTi) has approved its 2030 emission reduction targets. The subsidiary of Germany-based Knauf said that it was one of just a few companies in the US building-product sector that has signed onto SBTi. The company has agreed to reduce its carbon emissions from manufacturing (Scope 1 and 2) at the WB-2°C (well below 2°C) level, which equates to a 30% reduction in greenhouse gas emissions by 2030. USG has also committed to reducing carbon emissions associated with purchased raw materials and services, transportation and waste generation (Scope 3) by 15% within the same period.

US: USG has proposed to the Forest Service that it be allowed to conduct exploratory core drilling on National Forest System (NFS) lands south of its Shoals gypsum wallboard plant in Indiana. The drilling is intended to verify probable mineral resources within a 520ha area of NFS land ahead of future mining activities that would occur from the plant, according to the Washington Times-Herald newspaper. The USG drilling proposal is for a duration of two years beginning in the spring of 2023.

USG owns the subsurface mineral rights for mining gypsum deposits while the Forest Service owns the surface rights to a portion of land located within the Hoosier National Forest. The Forest Service previously gave permission for USG to conduct drilling on most of the land in 1995 but it is currently evaluating the impact it would entail, considering mitigation options and seeking public comment.

Canada: USG subsidiary CGC plans to build a US$160m gypsum wallboard plant in Wheatland County, near Calgary in Alberta. The Government of Alberta and Invest Alberta Corporation will support the project with around US$3m from the Investment and Growth Fund. It is also set to benefit from local tax benefits. The new unit is expected to create over 100 new jobs once it is operational. Plant construction is scheduled to begin in 2023.

“Our customers in Western Canada have said they want a more efficient way to access our CGC wallboard products they’ve been buying for over 100 years. Shipping our products from Eastern Canadian or American manufacturing plants no longer meets their growing demand,” said Chris Griffin, President and chief executive officer of USG Corporation.

The proposed plant’s kiln will be powered using gas. Renewable electricity will be provided by an onsite solar power farm. The unit will also be the company’s first plant in Canada built with the technology to manufacture USG Sheetrock Brand EcoSmart Panels.

US-based USG became a subsidiary of Germany-based Knauf in 2019.

Australia: Knauf is reportedly looking for buyers for its business in Australia. The Royal Bank of Canada and PricewaterhouseCoopers have been helping the gypsum wallboard producer manage a potential sale, according to the Australian newspaper. The German company operates three wallboard plants in the country. They are thought to be worth up to US$200m.

Any such sale is likely to be related to Knauf’s acquisition of USG in 2019. The US-based company owns a 50% share in USG-Boral, which also operates wallboard plants in Australia. Boral said in April 2020 that it thought it unlikely that the Australian Competition and Consumer Commission (ACCC) would approve its plans for USG-Boral so far. If Knauf were able to sell its other assets in Australia then its options with USG-Boral are more likely to be accepted. Speculation has mounted in the local press about partial or full asset divestments by Knauf in Australia since the USG acquisition.

US: The Gypsum Association has elected Gregory McCown as the chair of its board of directors for 2020 – 2021. McCown is the Regional Manufacturing Manager – Eastern US for CertainTeed Gypsum. Other appointments include National Gypsum’s Craig Robertson as vice-chair, Pabco Gypsum’s Emil Kopilovich, as treasurer and the Gypsum Association's Stephen H Meima continues as the secretary. USG’s Albert R Zucco is the past chair of the board. All terms are for one year and are effective from 1 May 2020.

Australia: Boral, already dealing with financial difficulty even before the coronavirus pandemic, has withdrawn its full-year profit guidance and warned that it will likely have to re-work its complex wallboard buyout transaction with USG / Knauf. The US$441m deal, announced in August 2019 with Knauf will likely need to be changed, after the Australasian component of it attracted the attention of the Australian Competition and Consumer Commission (ACCC).

Under the complicated deal between USG Boral and Knauf, Boral was to pay US$200m for the other 50% of USG Boral that it did not already own in Australia, and US$241m for a 50% stake of the plasterboard joint venture in Asia. Knauf then had a call option to return to 50% ownership of the Australasian business within five years.

However, the ACCC is now looming as a roadblock. "As Boral and Knauf work with regulators as part of an ongoing process to obtain the relevant approvals, Boral's view now is that the ACCC is unlikely to approve the call option in relation to the Australian and New Zealand business," said Boral in a statement. This means a range of other options will be considered for the transaction.

US: The Bureau of Land Management (BLM) released its Final Supplemental Environmental Impact Statement (FSEIS) for US Gypsum’s proposed upgrades to its Split Mountain quarry near Plaster City. Imperial Valley Press has reported that the FSEIS will provide the basis for the BLM’s decision as to how much if any of the proposed US$110m’s-worth upgrade to grant clearance to proceed with. US Gypsum’s plans consist of a new water line and associated buried electrical lines between the quarry and its Plaster City plant and a water line between the plant and the Imperial Irrigation District's Westside Main Canal.

US: The Bureau of Land Management is seeking public comment on a proposed expansion of a USG gypsum quarry and associated water lines in Imperial County, California. USG wants to replace an existing water supply line to its Plaster City gypsum wallboard plant. The project will cost US$110m. The comment period will last until early September 2019.

Australia: Boral says that it may be ready to announce its plans with its USG Boral joint venture in August 2019. It is currently conducting due diligence on the joint venture’s operations in Asia following Knauf’s acquisition of USG in early 2019, according to the Australian newspaper. Forward options include established a new Asian joint-venture with Knauf or buying USG Boral’s gypsum wallboard business in Australia, New Zealand, Papua New Guinea and islands in the South West Pacific. However, Boral’s chief executive officer (CEO) Mike Kane said that there might not be enough time to arrange a deal by the publication of Boral’s full year results in August 2019.

US: Germany’s Knauf has completed its acquisition of USG. The company said that the purchase would create, “a global building materials industry leader that will be even better positioned to meet customers' needs by leveraging two highly complementary businesses, product portfolios and global footprints.”

"We greatly admire USG's strong brands, leading market positions in North American wallboard and ceilings, and highly talented employee base,” said Alexander Knauf, General Partner of Knauf. He added that the transaction was the largest acquisition in Knauf’s history.

Knauf agreed to buy USG in mid-2018 for US$7bn. The Australian Competition and Consumer Commission has approved the deal in late March 2019 subject to asset divestments relating to its Boral-USG joint venture.