Gypsum industry news

Oman: Zawawi Gypsum has loaded its first export consignment of gypsum from the port of Salalah. The vessel loaded 66,000Mt of gypsum destined for India. A press release said that the company expects exports to increase to 2Mt/yr within the next three years.

''This shipment is the beginning of a long-term relationship between the port and our company. This relationship will grow stronger when our facility in the free zone commences exports through the port. Salalah, with its proximity to the main trade lanes and direct main line connectivity to our export destination was the ideal location for our facility in Oman,'' said Ramachandran, CEO of Zawawi Minerals.

Zawawi Minerals has created two joint ventures with USG Corporation, Zawawi Gypsum and Zawawi Drywall. Zawawi Drywall is building a 8MM2/yr gypsum wallboard plant. The US$37m plant is expected to be opened in early 2015. It will target growing markets in the Middle East, India and East Africa.

US/Australia: The Commission of New Zealand has granted clearance to USG Corporation and Boral Limited to enter into a joint venture.

The proposed joint venture relates to the two parties' operations in Asia, India, the Middle East and Australasia for the supply of plasterboard, ceiling tiles and ancillary building products such as metal studs and tracks, metal ceiling grids and metal ceiling battens.

The Commission found no significant overlap between USG and Boral in the plasterboard and ceiling tile markets and therefore focused its investigation on the supply of metal building products because the proposed joint venture would give USG Corporation an interest in Rondo Building Services Pty Ltd. At present, both USG and Rondo supply a range of metal building products in New Zealand.

The Commission was satisfied that the proposed joint venture will not have, or would not be likely to have, the effect of substantially lessening competition in separate markets for the supply of metal studs and tracks, metal ceiling battens and metal ceiling grid.

"In all three of these markets, the proposed joint venture would face competition from a number of different suppliers including both domestic manufacturers and importers," said Commerce Commission chairman Mark Berry.

US: USG Corporation has reported fourth quarter 2013 net sales of US$915m, up by 12% from fourth quarter 2012 net sales of US$815m. USG's fourth quarter 2013 operating profit was US$60m compared to an US$8m operating loss in the fourth quarter of 2012. USG's fourth quarter 2013 net loss was US$3m, compared to a US$13m net loss in the same period of 2012.

USG's adjusted net income was US$22m in the fourth quarter of 2013 compared to an adjusted net loss of US$52m in the fourth quarter of 2012. The adjusted net loss in the fourth quarter of 2013 excluded, among other items, a US$16m pension settlement charge related to a lump-sum payout to terminated employees that lowered the pension obligation by approximately US$80m. The adjusted net loss in the fourth quarter of 2012 excluded, among other items, a US$55m gain from the sale of the corporation's European operations.

"We're pleased to have delivered a fourth consecutive quarter of positive operating results with improved performances in all major businesses," said James S Metcalf, chairman, president and CEO. "Our plan to win is working and we expect to improve upon our results as we capitalise on the increasing opportunity in our end markets."

USG recorded full year 2013 net sales of US$3.6bn, an operating profit of US$258m and a net income of US$47m, with an adjusted net income of US$73m. For the full year of 2012, net sales were US$3.2bn, operating profit was US$73m and net loss was US$126m, with an adjusted net loss of US$124m.

"2013 was a foundational year for USG, however our work is not done," Metcalf said. "We remain committed to keeping our breakeven low and delivering our balance sheet, while seeking organic growth opportunities as we build the USG of the future."

Australia/US: USG Corporation has announced that it and Boral Limited continue to progress toward completion of their 50/50 strategic joint venture. While completion was originally anticipated to occur by 31 January 2014, it is now expected to occur on or before 28 February 2014, due to additional time being necessary to obtain regulatory approvals.

US/Australia: Boral and USG Corporation have entered into agreements to form a US$1.6bn joint venture producing wallboard in 12 countries across Asia, Australasia and the Middle East. Boral will contribute its Gypsum division to the joint venture, which includes its plasterboard operations in Australia and Asia. USG will contribute its Asian and Middle Eastern businesses, as well as exclusive access to its ceilings, cement board, fibre board, lightweight plasterboard and joint compound building products technologies in the joint venture's territory.

"The transaction is a major step forward for Boral and our vision is to create a world-leading interior linings business in Asia, Australasia and the Middle East," said Boral's CEO & Managing Director, Mike Kane.

The joint venture will be owned 50% by Boral and 50% by USG. In order to achieve an interest of 50% in the joint venture, USG will pay Boral up to US$575m in tranches. It will have a wallboard production capacity of 633Mm²/yr. The joint venture is expected to be completed by January 2014.

Management of the joint venture will be shared between Boral and USG with Frederic de Rougemont from Boral Gypsum who is appointed as CEO and Paul Monzella from USG Corporation who is appointed as CFO. USG will appoint the Chairman, Jennifer Scanlon, with the right to appoint chairman alternating between USG and Boral every two years.

US: USG Corporation has entered into a Solar Energy Power Purchase and Sale Agreement (PPA) with Green Light Plaster City Solar 1 (GLPCS1) to install a solar facility at its Plaster City, California manufacturing plant. The 1MW photovoltaic (PV) system is intended to provide USG with more predictable energy costs until the 2030s.

Through the PPA, GLPCS1 and local engineering firm ZGlobal, will install solar cells on three hectares of the Plaster City site. Installation began in September 2013 and should be completed by December 2013.

"We are always looking for opportunities for our plants to use solar energy, and it made a lot of sense to move forward with this renewable energy investment at our manufacturing plant in Plaster City," said Al Zucco, senior director, Energy and Sustainability, USG.

Currently the Imperial Irrigation District (IID) supports and provides all of the USG plant's energy. IID rates are expected to increase at an unknown rate, but with the PPA USG will have predictable pricing for energy produced by the solar PV system.

In addition to improving the environmental profile of USG's Plaster City plant, the project is expected to save the company more than US$1m over the 20-year life of the project through lowered electricity costs.

US: USG Corporation (USG) has elected Thomas A Burke to its board of directors. He will serve on the Audit and Governance committees of the USG board of directors. With the addition of Burke, USG's board includes nine independent directors.

Burke has been president and chief executive officer of Modine Manufacturing Company since 2008. Prior to his current role, he served as executive vice president and chief operating officer. Previously Burke served in several leadership positions with Visteon Corporation including vice president, North America and Asia operations, and Vice President, European and South American operations. Burke's experience spans a variety of roles over more than 30 years, including senior engineering and operations positions with other well-known companies such as Ford Motor Company and Deere and Company.

Burke serves on Modine Manufacturing's board of directors. In addition, he is a trustee of Manufacturers Alliance for Productivity and Innovation (MAPI), a board member of the United Way of Racine County, a member of the board of regents of the Milwaukee School of Engineering and a director of the National Association of Manufacturers.

Burke holds a bachelor's degree from Purdue University and has completed the Executive Business Program at Northwestern University's Kellogg Management Institute.

US: USG Corporation (USG) has announced two executive organisational changes effective from 1 October 2013. Christopher R Griffin, previously Executive Vice President, Operations is appointed Executive Vice President and Chief Operating Officer, USG Corporation. Jennifer F Scanlon, previously Vice President, USG Corporation and President, International, is appointed Senior Vice President, USG Corporation and President, International. Griffin and Scanlon will report to James S Metcalf, Chairman, President and CEO.

Since joining the company in 1997, Griffin has had responsibility for a variety of functions and departments, including sales, product management, marketing and international operations. He has more than 28 years of experience in the building materials industry.

Scanlon joined USG in 2003 as the Director of Supply Chain Management and Customer Relationship Management Strategy. In 2007, she assumed responsibility for the company's Information Technology strategy and operations until 2010, when she was appointed Vice President, International.

"These organisational changes will facilitate the continued implementation of USG's Plan to Win: Strengthening our core manufacturing and distribution businesses in North America and Diversifying the sources of our earnings, as we continue to Differentiate USG through innovation," said Metcalf.

US: USG Corporation (USG) has reported that its net sales rose by 15% year-on-year to US$916m in the second quarter of 2013 from US$798m in the same period in 2012. Net income rose to US$25m in the quarter compared to a loss of US$57m in 2012.

"We are pleased to generate net income for the second consecutive quarter," said James S Metcalf, Chairman, President and CEO. "Results in all major business units have improved from one year ago, including L&W Supply, which achieved an operating profit for the first time since 2008." Metcalf attributed the results to the success of the company's 'Plan to Win' business strategy.

Business unit highlights from the second quarter of 2013 included a 12% rise in wallboard shipments to 120MM2 from 107MM2.

Oman: USG-Zawawi Group and Bank Sohar have signed a US$45m deal to set up and run a gypsum quarry and gypsum wallboard plant in the Salalah Free Zone in Oman. The plant will have a production capacity of 8MM²/yr in its first phase, with a capacity of 16MM²/yr planned in accordance with future demand.

Zawawi Minerals LLC is an Oman-based company belonging to the Qais Zawawi Group. Zawawi Minerals is engaged in exploring and trading high-quality industrial minerals and metal ores, like limestone, gypsum, dolomite and chrome ore. USG's partnership with Zawawi has established two joint venture companies: Zawawi Gypsum LLC and USG-Zawawi Drywall LLC SFZ. The first joint venture develops infrastructure and operates a gypsum quarry, while the second joint venture will build and operate the new gypsum board plant in the Salalah Free Zone.