Gypsum industry news

New Zealand: Building supply merchants are reluctant to stock products of Winstone Wallboards' rivals and are squeezing alternative goods, claimed the chief of a competing business who supplied documents to New Zealand's Commerce Commission (CC).

Kevin van Hest, managing director of Elephant Plasterboard, which has only 3% of the market share in New Zealand, said that suppliers were shy about stocking or selling alternatives to Winstone's Gib because they had strong financial reasons not to. Van Hest claimed that the reasons include personal rewards like invitations to sporting and other events, overseas trips and financial payments.

The Commission announced in September 2013 that it was looking into the allegation, which remains to be concluded. Rick Osborne of Winestone Wallboard's parent company Fletcher Building said at the time that his business was advised that the CC intended to inquire into its wallboard supply arrangements with building supplies merchants. "The company will fully cooperate with the Commerce Commission and is confident that its supply arrangements comply with the Commerce Act," Osborne said.

A spokesman for Fletcher Building said that the system in operation actively rewards those building supply merchants who sold Winstone board, but there was nothing wrong with the deal. "Rebate structures are prevalent in most industries and in reality amount to price competition, with supply terms being based on volume and the duration of contractual relationships," he said. "Fletcher Building is confident that its arrangements are not anti-competitive and do not breach the Commerce Act. In that regard we aim to prevent any potential anti-competitive conduct through our internal compliance programmes," said Fletcher Building's spokesman.

David Thomas, Winstone's general manager, said that the business has a 94% market share because it manufactured and delivered the best product to customers. "People do have other options and they have for the last 20 years,'' Thomas said, citing Elephant wallboard and other products including Chinese board. But van Hest said that a combination of incentives and commercial pressure on merchants meant he couldn't get any more than 3% of the wallboard market, despite being in business since the 1980s.

Lack of competition and arrangements with merchants was one of the big factors forcing New Zealanders to pay 70% more for wallboard than Australians, which increases house-building costs by 40% compared to Australia. Big chains will sell Elephant wallboard, but not necessarily from their shop floors, van Hest said. Instead, if they sold it at all, they took a builder's order and arranged delivery from van Hest's Glendene warehouse to the construction site. Very few big chains would stock Elephant board. "Stores are reluctant to trade too much in Elephant wallboard because of the financial and other incentives," said van Hest.

India: India's FACT-RCF Building Products Ltd hopes that sales of gypsum-based building products will help it to reach US$50.8m in revenue in the current fiscal year.

The company, which is a joint venture between Kerala-based Fertilisers and Chemicals Travancore and Mumbai's Rashtriya Chemicals and Fertilisers, has received an encouraging response from users of gypsum products. End users have already purchased around 23,226m² of products, according to Jaiveer Srivastava, chairman and managing director of FACT-RCF.

The company has set up a 1400000m²/yr capacity plant in Kochi, Kerala at an investment of US$25.4m. Srivastava described the gypsum-based building products as a solution to address the issues connected with natural resource constraints in the building sector at a time when the availability of water, sand and labour are becoming scarce.

Germany: Wacker, the German chemical company, has reorganised its distribution network for silicone and polymer products in central and eastern Europe.

As part of a regional optimisation process, the existing partners IMCD, Euro-Him-1, Hellermann, Radka, Revada and Variachem will be entrusted with the distribution of Wacker's product range for silicones and polymers. Effective from 1 July 2014, these partners will replace the previous distribution partner Brenntag CEE.

IMCD, Euro-Him-1, Hellermann, Radka, Revada and Variachem already distribute products from the group's silicones and polymers portfolio in different regions. As part of the reorganisation of the distribution network in central and eastern Europe, Wacker is further extending these partnerships.

China: China Vanadium Titano-Magnetite Mining said that it has agreed to acquire 51% of the paid-up registered capital of Sichuan Haoyuan New Materials Co Ltd at US$59.3m. Sichuan Haoyuan's wholly-owned subsidiary Hanyuan County Xinjin Mining Co Ltd currently holds the mining permit of the Shigou gypsum mine, which is located in Sichuan Province. The mine has a raw gypsum output capacity of 0.30Mt/yr.

US: Paul Johnson Drywall Inc., an Arizona-based wallboard contractor, has ended its relationship with a labour contractor that misclassified workers as independent contractors, according to the US Department of Labour (DOL). Paul Johnson Drywall agreed to pay US$556,000 in overtime, back wages and liquidated damages to at least 445 current and former employees. It will also take steps to ensure misclassification does not occur again and will pay US$44,000 in civil penalties.

Paul Johnson Drywall had entered into a contract with Arizona Tract to supply wallboard labour. However, Arizona Tract misclassified workers as 'member/owners' and violated overtime and record-keeping provisions of the Fair Labor Standards Act (FLSA), according to the DOL. Paul Johnson Drywall also, prior to being solicited by Arizona Tract, failed to pay proper overtime to employees who were paid on a piece-rate basis. Investigators also found that Paul Johnson Drywall failed to keep complete and accurate records.

The company agreed to take steps to ensure its workers are properly classified and paid as employees and to improve compliance in the construction industry. Paul Johnson Drywall will hire a third-party monitor to ensure compliance and require any wallboard subcontractors to conduct regular training of supervisors and employees regarding the requirements under the FLSA. Paul Johnson Drywall has announced a classification initiative that includes reactivating 1325 workers as W-2 employees and hiring 627 new employees as a first step in its FLSA compliance programme, which was developed in conjunction with the DOL.

"We pride ourselves on having the most professional crews in the state and welcomed the opportunity to evaluate employment practices with the DOL," said Cole Johnson, president of Paul Johnson Drywall. "Our crews allow us to deliver clients unparalleled on-time delivery in the safest manner and as a result of these high expectations, we consistently pay our crews the highest wages. We're excited to be taking our business, as well as our trade and related industry, to the next level."