Gypsum industry news

US: USG Corporation has reported a net loss of US$30.5m for January and February 2012, compared to US$82.3m for the same two-month period in 2011. The preliminary, unaudited results were announced in connection with USG's ongoing tender offer and consent solicitation relating to its 9.75% notes due 2014.

For the two-month period, USG reported net sales of US$517m and an operating profit of US$5.7m. For the comparable two-month period in 2011, USG reported net sales of US$447m and an operating loss of US$46.8m. The company has attributed the improved year-over-year results primarily to increases in its US average wallboard price and wallboard gross margin.

USG currently expects that operating results for March 2012 will reflect the continuing impact of the wallboard prices and gross margin increases. Complete results for the first quarter are expected to be announced on 17 April 2012.

Indonesia: Indonesia's largest producer of gypsum PT Petrojaya Boral Plasterboard (Jayaboard) is building a new gypsum board factory in Cilegon, Banten with a production capacity of 30MM²/yr. The project is estimated to cost US$25m and it will expand the capacity of the company to 65MM²/yr.

Construction of the project is already underway and it is to be completed in 2013 said Kil-Joo Lee, the president of the Boral subsidiary.

China: The Ministry of Industry and Information Technology (MIIT) has released China's 12th five-year (2011-2015) plan for major industrial solid waste. The plan will target US$80bn from recycling solid waste with a comprehensive utilised volume of 1.6Bnt by 2015.

Under the plan, which will cover industrial by product gypsum, gangue, coal ash smelting slag, red mud and carbide slag, China is expected to generate 2.5 million new jobs in the field of industrial solid waste management. In the case of gypsum, it is likely that the by-product will be used in the production of wallboard.

MIIT predicts that China will generate an incredible 15Bnt of industrial solid waste in total during 2011-2015.

France: Saint-Gobain has posted a net income of Euro1.3bn for 2011, a rise of 14% from Euro1.1bn in 2010. The group has attributed this to strong demand for its building materials in emerging markets combined with its ability to pass higher raw material costs to customers in the form of higher prices.

Recurring net income spiked to Euro1.7bn in 2011, a 30% rise from Euro1.3bn in 2010. Operating income rose to Euro3.4bn, a 10% rise compared to Euro3.1bn. Group sales increased to Euro42bn, a 5% rise from Euro40bn.

"We managed to limit the impact of the strong increase of raw material and energy thanks to the increase of the prices of our products," said chief executive Pierre-Andre de Chalendar.

De Chalendar added that he expects a moderated growth of revenues in 2012 as the company intends to continue transferring higher costs to its products' prices. He declined to give specific data, though he said the growth will be slower than the 5% in 2011.

In its Interior Solutions division (which includes gypsum) the group recorded sales of Euro5.5bn for 2011, a rise of 6.1% from Euro5.2bn in 2010. Operating income met Euro450m in 2011, a rise of 19% from Euro380m. Notably capital expenditure increased to Euro330m, a rise of 70% from Euro190m. Overall the group doubled investment spending for 2011, in energy efficiency and energy markets, to almost Euro900m.

Sales volumes for Interior Solutions were up in all geographic areas, particularly in the US, Asia and emerging countries. In Western Europe and especially France, trading continued to be buoyed by stricter energy performance regulations.

Saint-Gobain's CEO has announced an ambitious expansion plan to boost total revenues to Euro55bn and net profit to Euro3bn by 2015, through acquisitions and organic growth. The company said the plan to spin off its unit Verallia is still being considered, but market conditions are not favourable in the short term.

US: International Paper Company (IP) has announced that it has completed its acquisition of Temple-Inland Inc. through the merger of its wholly-owned subsidiary Metal Acquisition Inc with Temple-Inland. Temple-Inland, which has four US wallboard plants, is now a wholly-owned subsidiary of International Paper.

Under the terms of the transaction, each issued and outstanding share of Temple-Inland common stock has been converted into the right to receive US$32 in cash without interest thereon, less any applicable withholding taxes. Including the assumption of approximately US$700m in Temple-Inland net debt, the total transaction value is approximately US$4.5bn. As a result of the acquisition, Temple-Inland's common stock ceased trading on the New York Stock Exchange on 13 February 2012.

International Paper Chairman and CEO John Faraci said, "We are very pleased to have completed this compelling transaction. The combination of International Paper and Temple-Inland strengthens our North American packaging business and enhances our ability to generate cash flow while maintaining our strong balance sheet. We look forward to working with the employees of Temple-Inland as we successfully integrate our businesses and create an even stronger company with substantial benefits for our customers, employees and shareholders."