Gypsum industry news

US: Gypsum consumption in the US has declined steeply in the past five years according to data released from the US Geological Survey, falling by over 50% from 41.6Mt in 2006 to just 19.4Mt in 2010. However, following an announcement that housing starts will increase by 15% in 2012 from the National Association of Home Builders (NAHB), gypsum demand is expected to finally rise.

The increase in housing starts and associated increase in gypsum wallboard demand is forecast to cause an increase in gypsum wallboard prices, with National Gypsum Properties, a North Carolina-based provider of wallboard and related products, announcing plans to raise its prices by 35% from 1 January 2012. Other suppliers and manufacturers may follow suit.

Craig Weisbruch, National Gypsum's senior vice president of sales and marketing, said that manufacturers expect to sell about 17bn ft² of wallboard in 2011, down from 38bn ft² in 2006. "We're changing the nature of the game here," he said. "I don't know if it will work or not, but we're all losing money. The amount of product we're shipping is so little we just can't cover our costs."

US: National Gypsum has announced that an Alabama lawsuit against the company has been dismissed. The suit claimed that National Gypsum wallboard exhibited the same characteristics as allegedly defective Chinese wallboard.

Marshall County, Alabama Circuit Court Judge Tim Jolley entered an order dismissing the case, Clark vs. National Gypsum, et. al. 'with prejudice', meaning that the plaintiffs are barred from bringing the same claim against the company again.

"This result is yet another confirmation of the quality and safety of our products and another blow to those making baseless claims against our company," said Craig Weisbruch, senior vice president of sales and marketing. "All National Gypsum wallboard has passed the industry's most rigorous testing and certification processes for indoor air quality and has been used by the US Green Building Council in its buildings."

The dismissal of the Alabama lawsuit follows a similar case in April 2011. A federal judge in Arizona dismissed a putative national class action against National Gypsum that had alleged that the company manufactured defective wallboard which emitted high levels of sulphur, damaged property inside homes and caused health symptoms. These problems have typically been associated with allegedly defective Chinese wallboard, not domestic wallboard. The plaintiff did not produce any credible scientific evidence that could substantiate his allegations.

"All credible scientific evidence - including studies by the federal government's leading safety experts - has led to the same conclusion," said Weisbruch. "National Gypsum wallboard does not pose the issues associated with allegedly defective Chinese drywall."

France: Lafarge has received Euro850m from the sale of its European and South American gypsum assets to Belgium's Etex Group. Lafarge will retain a 20% interest in the new partnership. The new entity created by the acquisition will have an annual revenue of around Euro1bn, according to Etex.

Europe/South America: The Belgian building-material company Etex Group has received approval from the European Commission (EC) to buy the European and South American gypsum activities of French cement group Lafarge for over Euro1bn (USD1.4bn). The EC ruled that the transaction would not significantly impede effective competition.

The activities, which generated Euro895m in revenue for Lafarge in 2010, will be incorporated into a new entity, in which Lafarge will hold a 20% stake. The divestment is in line with Lafarge's strategy to reduce its debt by Euro2bn in 2011.

US: Eagle Materials Inc. has reported its fiscal results for the second quarter (ending 30 September 2011) of the 2012 financial year. These show total revenues of USD134.8m and net earnings of USD6m. Revenues increased by 2% from the same period of the prior fiscal year, reflecting improved sales volumes across most of its business lines. Operating earnings were down by 6% due primarily to higher raw material costs in its gypsum wallboard segment.

Eagle Materials' Gypsum Wallboard and Paperboard division's second quarter operating earnings of USD1.5m were down by 71% compared to the same quarter of the 2011 fiscal year. The Gypsum Wallboard and Paperboard sector's revenues for the second fiscal quarter totalled USD72.3m, a 2% increase from the same quarter a year ago. The revenue increase reflects higher wallboard sales volumes and higher paperboard sales prices, offset by lower gypsum wallboard average net sales prices. The average gypsum wallboard net sales price for the quarter was USD92.09/MSF, 4% less than the same quarter of the 2011 fiscal year. The gypsum wallboard sales volume for the quarter of 403MMSF represents a 2% increase.