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Warren Buffett invests in gypsum industry

Published

3 years ago

October 14, 2021

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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 SHEETROCKÂ® 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

Concrete

Jefferies’ Optimism Fuels Cement Stock Rally

The industry is aiming price hikes of Rs 10-15 per bag in December.

Published

3 weeks ago

December 4, 2024

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Cement stocks surged over 5% on Monday, driven by Jefferies’ positive outlook on demand recovery, supported by increased government capital expenditure and favourable price trends.

JK Cement led the rally with a 5.3% jump, while UltraTech Cement rose 3.82%, making it the top performer on the Nifty 50. Dalmia Bharat and Grasim Industries gained over 3% each, with Shree Cement and Ambuja Cement adding 2.77% and 1.32%, respectively.

“Cement stocks have been consolidating without significant upward movement for over a year,” noted Vikas Jain, head of research at Reliance Securities. “The Jefferies report with positive price feedback prompted a revaluation of these stocks today.”

According to Jefferies, cement prices were stable in November, with earlier declines bottoming out. The industry is now targeting price hikes of Rs 10-15 per bag in December.

The brokerage highlighted moderate demand growth in October and November, with recovery expected to strengthen in the fourth quarter, supported by a revival in government infrastructure spending.
Analysts are optimistic about a stronger recovery in the latter half of FY25, driven by anticipated increases in government investments in infrastructure projects.
(ET)

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Steel Ministry Proposes 25% Safeguard Duty on Steel Imports

The duty aims to counter the impact of rising low-cost steel imports.

Published

3 weeks ago

December 4, 2024

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The Ministry of Steel has proposed a 25% safeguard duty on certain steel imports to address concerns raised by domestic producers. The proposal emerged during a meeting between Union Steel Minister H.D. Kumaraswamy and Commerce and Industry Minister Piyush Goyal in New Delhi, attended by senior officials and executives from leading steel companies like SAIL, Tata Steel, JSW Steel, and AMNS India.

Following the meeting, Goyal highlighted on X the importance of steel and metallurgical coke industries in India’s development, emphasising discussions on boosting production, improving quality, and enhancing global competitiveness. Kumaraswamy echoed the sentiment, pledging collaboration between ministries to create a business-friendly environment for domestic steelmakers.

The safeguard duty proposal aims to counter the impact of rising low-cost steel imports, particularly from free trade agreement (FTA) nations. Steel Secretary Sandeep Poundrik noted that 62% of steel imports currently enter at zero duty under FTAs, with imports rising to 5.51 million tonnes (MT) during April-September 2024-25, compared to 3.66 MT in the same period last year. Imports from China surged significantly, reaching 1.85 MT, up from 1.02 MT a year ago.

Industry experts, including think tank GTRI, have raised concerns about FTAs, highlighting cases where foreign producers partner with Indian firms to re-import steel at concessional rates. GTRI founder Ajay Srivastava also pointed to challenges like port delays and regulatory hurdles, which strain over 10,000 steel user units in India.

The government’s proposal reflects its commitment to supporting the domestic steel industry while addressing trade imbalances and promoting a self-reliant manufacturing sector.

(ET)

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India Imposes Anti-Dumping Duty on Solar Panel Aluminium Frames

Move boosts domestic aluminium industry, curbs low-cost imports

Published

3 weeks ago

December 4, 2024

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The Indian government has introduced anti-dumping duties on anodized aluminium frames for solar panels and modules imported from China, a move hailed by the Aluminium Association of India (AAI) as a significant step toward fostering a self-reliant aluminium sector.

The duties, effective for five years, aim to counter the influx of low-cost imports that have hindered domestic manufacturing. According to the Ministry of Finance, Chinese dumping has limited India’s ability to develop local production capabilities.

Ahead of Budget 2025, the aluminium industry has urged the government to introduce stronger trade protections. Key demands include raising import duties on primary and downstream aluminium products from 7.5% to 10% and imposing a uniform 7.5% duty on aluminium scrap to curb the influx of low-quality imports.

India’s heavy reliance on aluminium imports, which now account for 54% of the country’s demand, has resulted in an annual foreign exchange outflow of Rupees 562.91 billion. Scrap imports, doubling over the last decade, have surged to 1,825 KT in FY25, primarily sourced from China, the Middle East, the US, and the UK.

The AAI noted that while advanced economies like the US and China impose strict tariffs and restrictions to protect their aluminium industries, India has become the largest importer of aluminium scrap globally. This trend undermines local producers, who are urging robust measures to enhance the domestic aluminium ecosystem.

With India’s aluminium demand projected to reach 10 million tonnes by 2030, industry leaders emphasize the need for stronger policies to support local production and drive investments in capacity expansion. The anti-dumping duties on solar panel components, they say, are a vital first step in building a sustainable and competitive aluminium sector.