A recent report published by Roskill, which profiles producers and end users of gypsum the world over, indicates India becoming the largest gypsum importer in the world. Big investors like Warren Buffet are picking up the cue.

In the December edition of ICR, we had published an article on gypsum shortage and its impact on India (Gypsum Demand and Supply Scenario in India by Ramachandran, CEO, Zawawi Minerals, December 2013, Pg 60). A recent report published by Roskill, which profiles producers and end users of gypsum the world over, too indicates India becoming the largest gypsum importer in the world. Market leaders have picked up the cue and have started making significant investment in gypsum.

Warren Buffett is one of the world’s most successful long-term investors. His company, Berkshire Hathaway, maintains large positions in several well-known North American companies such as Heinz and Coca-Cola, and wholly owns several large businesses, such as Burlington Northern Santa Fe Railroad.

In January 2014, regulatory filings revealed that Berkshire Hathaway had acquired more shares in USG Corporation by exchanging US$243.8M of convertible notes it held in the Chicago-based company. This exchange made Berkshire Hathaway the largest single shareholder in USG.

USG Corporation, formerly known as United States Gypsum Company, is the largest producer of gypsum plasterboard in North America, and the producer of several other homebuilding products. USG’s plaster board is sold under the trademarked brand name SHEETROCK® USG is also a leading producer of ceiling tile.

Berkshire Hathaway’s exchange followed the news in October 2013 that USG would be forming a new US$1.67 Bn joint venture with Boral of Australia. The two companies will hold an equal share in the venture, called USG Boral Building Products, which values Boral’ s assets at A$1.35 Bn and USG’s at US$250M.

USG will gain Boral’s Gypsum Asia and Australian assets in the agreement, while USG will contribute a ceiling factory in China and its Middle East assets, including a gypsum asset in Oman that will supply the lucrative Indian market. In February 2014 it was reported that USG and Boral continue to progress toward completion of their 50:50 strategic joint venture. While completion was originally anticipated to occur by the end of January 2014, it is now expected to occur on or before the end of February 2014, due to additional time required to obtain regulatory approvals.

Knauf has quietly increased its plasterboard production capacity by approximately 0.5 Bnm2py. It also acquired the businesses of USG in Europe and Lafarge in Australia and has announced plans to add substantial capacity in China during 2014. Etex has acquired all of Lafarge’s South American and European plasterboard operations. Lafarge, in selling almost 1Bnm2py of plasterboard production, has enabled these changes and is focusing on its core businesses.

The boom in global construction prior to the onset of the global financial crisis plus the adoption of construction methods that employ plasterboard had resulted in a 28 per cent increase in plasterboard production capacity worldwide between 2004 and 2009, from 7.8Bnm2py to 9.7Bnm2py. Capacity then increased by a further 33 per cent to 12.9Bnm2py but in early 2014 relatively few plants are under construction or planned before 2018.

Asia is expected to overtake North America and become the largest geographic market for gypsum plasterboard during 2014 with India, as the largest global gypsum importer. Roskill’s Gypsum report. The 11th edition of this Roskill report profiles over 300 producers and end users of gypsum, providing an overview of the entire supply chain.

For further information on this report, please contact Alison Saxby, asaxby@roskill.co.uk