Responding to a severe wallboard shortage exacerbated by the continued U.S. construction surge, U.S. Gypsum Co. is building four new U.S. plants and substantially refurbishing a fifth, with a total capital investment of US$450 million. Together, the five plants will add 2 billion sq. ft. (180 million sq. m.) of new production capacity.

That building blitzkrieg by the subsidiary of Chicago-based USG Corp. (www.usg.com) should be a boon to the U.S. building industry in general, which has been severely hamstrung by the wallboard shortage.

Many construction projects, spanning both corporate and residential space, have bogged down with the wallboard dearth. Homebuilders, for example, are reporting that their projects are taking an extra 20 to 30 days to complete because of the materials shortage. "We're ordering many weeks in advance and bartering and begging wholesalers for drywall," says one construction company official in Alabama.

"The issues for builders right now are certainly not problems with buyer demand, which is really red hot," says David Seiders, chief economist with the National Home Builders Assn. "The problems are on the input side. Labor has been a problem for some time, and now materials are rising to the top of the list. Wallboard in particular is in short supply."

Wallboard plants cranking hard to meet demand, reportedly running at peak capacity of roughly 27 billion sq. ft. (243 million sq. m.) a year. For example, USG, considered the industry leader in wallboard, last year shipped almost 9 billion sq. ft. (810 million sq. m.) of its Sheetrock brand, a 10 percent increase.

Says Bill Foote, USG Corp. chairman and CEO, "We are running our plants at full capacity, 24 hours a day, seven days a week. In the last five years, we've added a billion sq. ft. (90 million sq. m.) of capacity."

The growing pangs created by the wallboard shortage should be partially alleviated by USG's five new and refurbished plants.

"This year alone we will add another billion feet of capacity . . . [opening] two new plants [in 1999] and three more in the next couple of years," Foote says.

USG's five new and expanded facilities include a brownfield site plant in Aliquippa, Pa., which is scheduled to open this year, plus plants in East Chicago, Ill.; Plaster City, Calif.; and Rainer Ore., which are scheduled to open in 2000.

The Plaster City plant is the existing location that USG has targeted for a major facelift, adding a new, $105 million production line to replace the existing 41-year-old line. When fully operational in late 2000, the renovated Plaster City plant will have annual wallboard capacity totaling more than 1 billion sq. ft. (90 million sq. m.).

Alabama Plant Already Online

In July, USG's operation in Bridgeport, Ala., became the first plant in USG's new facility tsunami to become fully operational.

The timing of the Alabama plant's going online amid the wallboard drought owes to USG's decision back in November of 1996 to build the Bridgeport gypsum wallboard plant. The $110 million, state-of-the-art facility in the northeast corner of Alabama has the capacity to produce 700 million sq. ft. (6.3 million sq. m.) of Sheetrock a year. That's double the capacity at USG's defunct wallboard plant and gypsum mine that was located in Plasterco, Va., which the Bridgeport plant replaced.

Other location considerations for "this low-cost, state-of-the-art facility," noted Foote when the Alabama location decision was announced, included "serving as a cornerstone of USG's strategy to effectively serve markets in the Southeast, which consumes almost one quarter of all the wallboard produced in the United States. Some of USG's largest and fastest-growing customers are located there," Foote said.

The Bridgeport site, Foote explained, was chosen "as the best among many alternatives mainly because its proximity to the market will ensure low transportation costs."

The plant's location on the Tennessee River, for example, allows barge delivery of the operation's main raw material, synthetic gypsum, a byproduct of flue gas desulfurization, a process that reduces acid rain by removing sulfur dioxide from fossil-fuel-burning power plant emissions. Access to rail via a rail car loading area adjacent to the plant also boosts the Bridgeport site's ability to provide low-cost transportation, USG officials say.

Cutting Facility Cycle Time by 20 Percent

The Alabama plant is also the prototype for the five new and refurbished plants that USG is bringing online. Replicating the design for each of the five operations will save between $10 million and $15 million per plant, with much of those savings coming in equipment expenditures, say USG officials.

Duplicating the design of the Alabama facility will also slice time in getting the other four plants fully operational. Company officials say that not having to come up with a new design for each project will cut the 30-month time frame for the Alabama plant to 24 months for the four other projects.

USG is using the same contractor, Birmingham, Ala.-based BE&K (www.bek.com) for four of the five plants. Fluor Corp. (www.fluor.com) is handling construction of USG's other new project.

The design replication and the heavy use of BE&K owe partly to the fact that the four new operations mark USG's first greenfield plants in 30-plus years, company officials explain.