American Gypsum Plans Early 2008 Plant Start-Up amid Slacking Market

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Researched by Industrial Info Resources (Sugar Land, Texas)--American Gypsum Company, a subsidiary of Eagle Materials Incorporated (Dallas, Texas), is nearing construction completion of a grassroot synthetic gypsum wallboard manufacturing plant in Georgetown, South Carolina. The $150 million plant is being engineered and constructed by Lockwood Greene, a wholly owned subsidiary of CH2M Hill (Englewood, Colorado). Construction is scheduled to be complete in mid-November 2007 and will be followed by a two-month commissioning period. The company plans to begin running wallboard by the beginning of 2008. The project marks the end of a cycle of gypsum wallboard manufacturing capacity increases that started in 2005. Since that time more than $2 billion has been spent by the industry to expand capacity. This includes numerous gypsum wallboard capacity expansion projects that have been recently completed or will be completed in 2008, including American Gypsum's Georgetown, South Carolina, plant; BPB America's Moundsville plant; U.S. Gypsum's new plant in Washingtonville, Pennsylvania; G-P Gypsum's expansion in Savannah; and National Gypsum's new plant in Mount Holly, South Carolina. These projects represent expenditures exceeding $700 million. For more information, see September 6, 2005, article - Eastern U.S. Hot Spot for $1 Billion Gypsum Wallboard Manufacturing Plant Project Activity and April 4, 2006 article - Next Round of New Gypsum Wallboard Manufacturing Plant Construction Begins in the Carolinas.

Most of the new capacity is for synthetic gypsum wallboard, which has cost benefits compared to naturally mined gypsum wallboard. The American Gypsum plant has been constructed next to Santee Cooper's Winyah power generating station taking advantage of by-product synthetic gypsum feedstock from the power plant's flue gas desulfurization system.

With a weakened housing market in 2007, activity for new projects in the gypsum manufacturing sector has come to a standstill. As these new plants come online, some producers, such as United States Gypsum have announced plant closures blaming the housing market slowdown. United States Gypsum most recently announced it will cease gypsum wallboard production at its plant in New Orleans, Louisiana, on December 15, 2007, and has closed three of its 27 plants recently.

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