Gypsum industry news

US: USG’s Washingtonville gypsum wallboard plant in Pennsylvania plans to spend US$8m towards automation upgrades in 2017. Plant manager Nicholas Latkovic told the Daily Item newspaper that the company also expects to spend US$8m or higher in 2018. The upgrade will include 20 automated guided vehicles and automated board handling equipment to speed up the production process by 20%. The investment is also expected to add four or five people to the total workforce of 125.

US: USG Corporation has reported its financial results for the second quarter of 2017, showing a double digit increase in wallboard sales despite a competitive environment. "Our US wallboard shipments in the second quarter of 2017 were up double-digits and were at the highest levels we have seen since 2008," said Jennifer F Scanlon, President and CEO. "However, rising commodity costs and a competitive pricing environment weighed on our operating margins and second quarter performance. We are taking actions to address inflation and will continue our strategic investment in advanced manufacturing to deliver profitable growth."

On a consolidated basis in the second quarter of 2017, USG's net sales were US$811m, compared to US$769m in the second quarter of 2016. Operating profit decreased to US$96m from US$122m, while adjusted operating profit decreased to US$117m from US$127m in the second quarter of 2017 compared to the second quarter of 2016. USG generated US$36m compared to US$74m in the second quarter of 2016.

The corporation's gypsum segment generated US$90m of operating profit in the second quarter of 2017. On an adjusted basis, operating profit of US$95m in the gypsum segment decreased by US$6m compared to the second quarter of 2016. US wallboard volumes increased by 10% in the second quarter of 2017. US wallboard prices decreased by approximately 1% due primarily to competitive pricing pressures and the impact of transitioning certain wallboard volumes from wholly-owned distribution at L&W Supply, which was sold in 2016, to independent distribution. USG's US wallboard production costs increased by US$8m due almost exclusively to rising waste paper costs.

US: USG has won two manufacturing awards from Frost & Sullivan's Manufacturing Leadership Council. The building materials manufacturer earned an award in the 'Improving Operational Excellence' category for its Lean Six Sigma (LSS) programme achievements and its Mexican subsidiary, USG Mexico, earned an award in the category of 'Supply Chain Leadership' for the optimisation of its import logistics and distribution programs. The Manufacturing Leadership Awards recognise manufacturing organisations and individual leaders shaping the future of global manufacturing.

"USG is committed to manufacturing excellence and it is an honour to receive these prestigious Manufacturing Leadership Awards," said Dom Dannessa, USG's Executive Vice President and Chief Operations and Innovation Officer. "Investments in Lean Six Sigma and our Supply Chain have allowed us to better anticipate our customers' needs so that we can continue to provide them with superior solutions."

USG says that its LSS programmes have enabled it to optimise production and pricing, cut transportation costs and reduce excess inventory, leading to more than US$250m in operational savings and significantly improving team productivity. USG Mexico meanwhile invested in local distribution centres to increase its product range in the region.

US: USG's profit has been reduced due to rising commodity costs in both its gypsum and ceiling businesses. Its operating profit fell by 22% year-on-year to US$91m in the first quarter of 2017 from US$116m in the same period in 2016. Its net sales rose by 2.7% to US$767m from US$747m, roughly in line with its sales revenue growth in 2016 as a whole. The group reported that US gypsum wallboard volumes decreased by 4% in the quarter. Domestic wallboard manufacturing costs increased by US$16m due to rising waste paper and synthetic gypsum input costs.

"We had sound operational performance in the first quarter and we are seeing solid demand for our products," said Jennifer F Scanlon, president and chief executive officer. "I am encouraged about our prospects for the balance of the year, despite the uptick we are seeing in commodity costs."

US: USG has released Sheetrock Brand EcoSmart Panels, a lightweight gypsum wallboard panel with sustainable credentials. The panel is based on USG's UltraLight Panels and USG's Corporate Innovation Centre developed new gypsum core chemistries and a manufacturing process to reduce 20% of carbon dioxide emissions and decrease water usage by 25%. It is being released in the US in two core formulations for fire and non-fire-rated applications.

The product was developed in response to the Architecture 2030 Challenge for Products in July 2016. It may also contribute to achieving additional US Green Building Council (Leadership in Energy and Environmental Design) LEED v4.0 credits and meet the requirements of the Living Building Challenge.

"There has been a significant movement in the architecture community to reduce the carbon footprint of the building sector," said Edward Mazria, chief executive officer and founder of the Architecture 2030 Challenge. "Yet, to fully achieve our goal for the building sector to become carbon-neutral by 2050, manufacturers like USG must quickly rise to the occasion and develop sustainable, low-carbon and zero-carbon building materials."

Australia: Boral's revenue from its gypsum wallboard join venture, USG Boral, has risen by 2% year-on-year to US$566m in the first half of its financial year, which ended on 31 December 2016, from US$552m in the same period in 2015. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 18% to US$116m from US$98.5m. It attributed the sales growth to growth in its Sheetrock plasterboard product. The on-going rollout of Sheetrock is scheduled to continue until the end of 2017. Regionally, sales growth in South Korea, Australia and Thailand offset a declining market in China.

The building materials company added that its joint venture had started building a new warehouse at its USG Boral's Dangjin facility in South Korea in the reporting period. The upgrade at the site is intended to add incremental capacity and support the longer-term addition of at least 30Mm²/yr of plasterboard production capacity at the site, which has existing capacity to produce around 70Mm²/yr. The investment will be self-funded through the joint venture.

Overall, Boral's sales revenue fell by 5% to US$1.6bn from US$1.68bn. However, its profit after tax rose by 9% to US$114m from US$105m. It attributed this to a 'solid' performance in Australia combined with good earnings from Boral USA and USG Boral.

US: USG is celebrating the centennial anniversary of its Sheetrock brand, developed as the world's first wallboard panel in 1917. To observe the anniversary USG is hosting celebrations across North America with its employees, dealers and customers. Limited quantities of commemorative products celebrating the anniversary will also be shared with customers and dealers.

"From the first simple wallboard panel developed 100 years ago to the breadth of high-performing panels available today, USG has led the industry in innovation," said Jennifer Scanlon, president and chief executive officer (CEO) of USG Corporation. "We are thrilled to celebrate a century of excellence and product leadership. We are proud that USG's Sheetrock brand is one of the world's most recognised brands."

US: USG's net sales have risen by 3.5% year-on-year to US$3.02bn in 2016 from US$2.91bn in the same period in 2015. Its net income fell by nearly half to US$510m from US$991m. Net sales of gypsum rose by 4.6% to US$2.14bn from US$2.04bn.

"We are in a stronger financial position than we have been in for many years," said Jennifer F Scanlon, president and chief executive officer (CEO) of USG. "In 2016 we expanded adjusted operating margins in our Gypsum, Ceilings, and USG Boral businesses. We finished the year on a high note by paying off US$900m of debt."

US: Net sales from USG's gypsum business have risen by 4.5% year-on-year to US$1.9bn in the first nine months of 2016 from US$1.82bn in the same period in 2015. Its operating profit rose by 18% to US$310m from US$262m. the company said that surfaces and substrates products drove US$5m of this improved profit. US wallboard volumes increased by 1% while domestic wallboard price was down roughly 1% from the third quarter of 2015. Inflation in wallboard input costs was offset by reduced selling, general and administrative expenses spending in the US gypsum business.

"I'm pleased to report that we expanded margins in both of our US businesses as well as in our USG Boral joint venture," said James S Metcalf, president and CEO of USG. He added that the company intends to use the US$670m from its sale of L&W Supply to reduce debt.

Overall, the company reported that its net sales rose by 4% to US$2.28bn from US$2.2bn and its net income rose by 13% to US$203m from US$179m. Sales from its USG Boral business rose by 4.9% to US$778m from US$742m. Improved results from USB Boral in the third quarter of 2016 were attributed to improved gypsum wallboard price and volume, manufacturing efficiencies and increased sales of 'adjacent' products.

US: James S Metcalf will retire as chairman of the board, president and chief executive officer (CEO) of USG with effect from 31 October 2016. He will be succeeded by Jennifer F Scanlon, executive vice president, president, International and president of L&W Supply Corporation. Scanlon has been appointed as a director of USG immediately and she will serve as executive vice president and CEO-elect until 1 November 2016. As part of the leadership transition, Steven F Leer, lead director, will become non-executive chairman of the board, effective 1 November 2016.

"After more than 35 years with the company and more than a decade in senior leadership roles, including almost six years as president and chief executive officer, I believe that it is the right time for me to move on to the next phase of my professional life and for Jenny to guide USG into its next chapter," said Metcalf. He has served as president and chief executive officer since January 2011 and as chairman since December 2011.

Jennifer Scanlon is also a director on the USG Board of Directors and the chairman of the board of USG Boral Building Products. She leads USG's international joint ventures across Asia, Australasia and the Middle East. Her previous assignments at USG include vice president and chief information officer and head of corporate strategy. Scanlon joined USG in 2003 as the director of supply chain and customer relationship strategy. Prior to USG, Scanlon was a senior vice president for Bricker & Associates, a management consulting firm that specialised in assisting Fortune 500 organisations dramatically increasing profits through operational improvement. She began her career at IBM, serving in various operational and consulting roles.

Scanlon graduated from the University of Notre Dame in 1988 with a BA in government and computer applications. She earned an MBA in finance and marketing from the University of Chicago Booth School of Business in 1992. Scanlon serves on the boards of the Chicago Council of Global Affairs and of Shore Community Services. Scanlon is a member of the Economic Club of Chicago and the Executives' Club of Chicago.

Steven Leer has been a director of USG since June 2005, and lead director since January 2012. He serves as chair of the Governance Committee and a member of its Compensation and Organisation Committee. Leer retired as chairman of Arch Coal in 2014 after having served in that position since April 2006. He was also the chief executive officer of Arch Coal, Inc. until April 2012. Leer is a director of Norfolk Southern Corporation, Cenovus Energy Inc. and Parsons Corporation. He is a former director of the Greater St Louis Area Boy Scouts of America and the National Association of Manufacturers.