Boral Plasterboard Sells out to USG

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BORAL’S $US1.6 billion plasterboard joint venture with US-based giant USG was embraced by investors in October, as chief executive Mike Kane flagged more changes to the business and described the deal as one that would offer the company a “leg-up” on its global rivals.

The two will hold an equal share in the venture, called USG Boral Building Products, which values Boral’s assets at $1.35bn and USG’s at $US250 million.

Operating across 12 countries in Australasia, Asia and the Middle East, 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 half-built Gypsum factory in Oman that will supply the lucrative Indian market.

However, the greatest gain for Boral will be access to USG’s technology for its highly successful UltraLight Panels, which it sells in North America, and will be used to capitalise on the rapidly expanding Asian gypsum market.

The light weight core panels are lighter, easier to install, stronger, more resilient and easier to make than its own existing plasterboard products, Mr Kane said.

Last financial year, Boral Gypsum contributed 18 per cent of Boral’s overall $5.3bn in revenue and made earnings before interest and tax of $83m.

The projected earnings for Boral from the venture would be $US35-$US45m for the 2014 calendar year.

For the full story see The Australian.

October 20th, 2013|