Gypsum industry news

US: Continental Building Products (CBP) has announced strong results for the fourth quarter of 2014 and the entirety of the year.

"Our results marked a solid year of progress for our company, allowing us to generate significant cash flows and dramatically improve our balance sheet," said Jay Bachmann, CBP's CEO. "The positive momentum in our business continued into the fourth quarter, with our net sales up by 5.6% and our adjusted EBITDA and operating income increasing by 15.6% and by 35.2%, respectively, reflecting favourable operating leverage driven by our low cost structure. During the full year 2014, we converted the majority of our adjusted EBITDA into free cash flow, which we used to reduce our long-term debt and strengthen our financial position. As we move into 2015, we believe that the construction markets will continue to recover and steadily improve. Amid that backdrop, we believe that our business is well-positioned to continue building on our progress by optimising our revenues and exercising strict cost controls to deliver improved returns and cash flows."

Net sales for the fourth quarter of 2014 were US$121m, up by 5.6% from US$114m in the fourth quarter of 2013. The increase in sales was primarily driven by 6.8% growth in the average mill net price. Wallboard volumes were 627Mft2 compared to 632Mft2 in the 2013 quarter, with flat US volumes offset by a single-digit percentage decline in Canada. Gross profit was US$31.7m, up by 28.6% compared to US$24.6m in the 2013 quarter. The gross margin of 26.2% increased from 21.5% in the prior year quarter, primarily as a result of higher average wallboard mill net prices and CBP's focus on leveraging its low cost structure.

Operating income was US$21.5m, up by 35.2% from US$15.9m in the 2013 quarter. Interest expenses were US$4.6m, down from US$8.2m in the 2013 quarter, reflecting a reduction in the long-term debt and a decrease in the interest rate on CBP's borrowings. Net income during the quarter was US$10.4m compared to US$6.7m in the 2013 quarter. Adjusted EBITDA increased by 15.6% to US$34.5m, compared to US$29.8m in the 2013 quarter.

Net sales for the enitrety of 2014 were US$425m, up by 5.5% from US$402m in 2013. Wallboard volumes increased by 0.9% to 2.18Bnft2 compared to 2.16Bnft2 in 2013. The average wallboard mill net price increased by 6.1% year-on-year. Gross profit was US$94.3m, up by 35.6% from US$69.5m in 2013. The gross margin of 22.2% was higher than the 17.3% margin of the prior year. Operating income was US$60.8m, up by 104% from US$29.8m in 2013. Interest expense was US$29.1m compared to US$23.4m in the prior year. Net income was US$15.9m compared to US$4.9m in 2013. Adjusted net income was US$23.8m compared to US$22.8m in 2013, excluding the impact of nonrecurring costs. Adjusted EBITDA increased by 12.2% to US$115m compared to US$103m in 2013. During the full year of 2014, CBP generated operating cash flow of US$78m, incurred US$5.7m of capital expenditures and used cash on hand for the repayment of US$65.6m of debt.

India: Gypsum wallboard and plaster maker FACT-RCF Building Products Ltd (FRBPL) is expecting to sign a supply contract with Tata Housing. FRBPL is a 50:50 joint venture between Kochi-based Fertilisers and Chemicals Travancore Ltd and Rashtriya Chemicals & Fertilisers Ltd (RCF).

"The negotiations are on with Tata Housing. We hope to conclude the negotiations soon and ink the deal," said C P Dinesh, managing director of FRBPL. Dinesh said that the plant in Kerala has a capacity of 1.4Mm2/yr and started production in 2012. According to Dinesh, Tata Housing is planning to construct ground plus four buildings and needs wallboard panels in large numbers.

Europe: The GtoG project (The perfect loop - the path to a circular economy: A European collaborative approach between the recycling industry, the demolition sector and the gypsum industry) has developed a film that presents in detail the project objectives and results.

Gypsum products like wallboard and blocks are among the very few construction materials where closed-loop recycling is possible. The recycling process separates gypsum from paper and both materials can be re-used to repeatedly produce the same products. The overall aim of GtoG is to transform the gypsum demolition waste market to achieve higher recycling rates of gypsum waste, thereby helping to achieve a resource-efficient economy.

The newly-launched film enables the audience to gain insight on the project developments and is part of the consortium's willingness to enhance the quality and availability of information to all industry professionals and to its stakeholders. The film includes contributions from professionals covering not only the entire gypsum supply chain (demolition, recycling and production), but also the full range of organisations represented in the project (universities, consulting agencies and demolition, recycling and manufacturing companies).

Canada: National Gypsum Canada Ltd is looking to make what it calls 'the largest gypsum quarry in the world' even bigger. The quarry in Milford, Nova Scotia currently covers about 3.01km². The plan is to expand operations by 1.44km², 1.35km² of which would be used for mining activities.

"We want to ensure that we have an adequate gypsum supply and the market is better than it has been," said Nancy Spurlock, company spokeswoman. An increase in US housing starts of about 1m units in 2014, up 8% from 2013, continues to drive demand for wallboard products.

National Gypsum has registered its proposed mine extension project for environmental assessment with the province as required under the Environment Act. "The anticipated average production rate for the expanded mine facility will be at the 20-year average of 3.1Mt/yr, depending on market demand," said an environmental report prepared by Stantec Consulting Ltd for National Gypsum.

The Milford-area mine has produced more than 134Mt of gypsum since it opened in 1954. National Gypsum employs 60 people at the mine and more workers will be needed if mining operations and the volume of product pulled from the ground increases, according to Spurlock. The quarry, one of eight the company owns and its only one outside the US, would grow over the next 35 - 40 years, depending on market demand. "It's a long-term forecast, and we need to nail down the source of our gypsum, that's why we're doing it," said Spurlock.

The proposed extension area includes forest, wetland, clear-cuts and some agricultural land. Six wetland areas would be protected by an ecological buffer zone. If the project is given the go-ahead, National Gypsum would open up areas as needed. The minister has until 9 April 2015 to grant a conditional approval of the environmental assessment.

India: Saint-Gobain, which is celebrating its 350th anniversary, has its sights set firmly on the future and, in particular, in India. It entered India in 1996 and now has 20 manufacturing plants and about 4900 employees there.

Saint-Gobain's two ambitions for its businesses in India are to shape the future of and to become the reference for sustainable habitat and to more than double its business in India and to exceed sales of US$1.61bn by 2019.

"India has been an important market and investment destination for Saint-Gobain and, going forward, will be even more so," said Anand Mahajan, Saint-Gobain's general delegate for India, Sri Lanka and Bangladesh.