Resource Erectors Industry Watch Q4-December 2021
The industry watchers here at Resource Erectors were happy to see the 11 November press release from construction materials and energy industry giant Saint-Gobain, announcing a substantial 400 million USD investment earmarked for expanding the US gypsum industry and more in the domestic construction materials sector.
According to the report at Global Gypsum, expansions to global operations include four sites in the US located in the Southeastern US and California. And of course the company is spotlighting the sustainability factor so essential to marketing construction materials of any type in today’s hyper-green focused business environment. In this case, Saint-Gobain claims that advanced technologies for enhanced industrial performance can reduce the dreaded carbon footprint by reducing waste by 50% and CO2 emissions by 20%.
Keywords For 2022: Light Sustainable Construction Materials
“Light and sustainable” are the keywords for anticipated demand in the construction sector, and Saint-Gobain is positioning itself as a green global leader to meet that global demand. We reported on the company’s “strategic sustainability” deals as recovery from the pandemic shutdowns continued in 2021 in our April article, “Can the Gypsum Materials Industry Launch a Sustainability Rebound After 2020 Covid Declines?”
Now the French corporation behind such popular US construction material brands as Certainteed and Carbotherm is building a robust construction materials supply chain by backing up overseas suppliers with domestic US expansion.
Their Grow & Impact plan was publicized last October with these new financial goals for 2021-2025.
- Organic sales growth of 3 – 5%
- Operating margin of 9 – 11%
- Free cash flow conversion ratio above 50%
- Return on capital 12 – 15%
- Annual dividend payout ratio representing 30-50% of recurring net income.
- A Euro2bn share buyback programme for 2021 – 2025. Saint-Gobain is now executing that plan “to increase profitable growth” with strategic acquisitions including:
- a gypsum wallboard plant in Nairobi, Kenya
- a majority stake in Chryso additives. “CHRYSO® provides the next level of customer service, innovation, and performance to the concrete and cement industry” according to the enthusiastic partnership announcement at the company’s home page.
- ABE Mauritius, is a diversified construction chemicals producer of waterproofing, mortar, and sealants. Founded in 1932, A.B.E. has manufacturing plants in Johannesburg (Boksburg) and Durban (Isipingo).
- IMPAC, construction chemicals producer based in Monterrey, Mexico.
Saint-Gobain’s Growth and Impact Strategy in North America
Growth in North America is high on the priority list of recently appointed CEO Benoit Bazin, the Chief Executive Officer of the French Saint-Gobain group since July 2021. With the American market accounting for 16% of the industrial giant’s turnover, that $400 million expansion investment will be spread across four US operations at locations ranging from coast to coast, with the common goal of increasing production at operations that include:
- Insulation production in Athens, Georgia and the Chowchilla facility in California
- Roofing material manufacturing, also in Georgia,
- Plasterboard production in Arkansas at a convenient site located near an open pit gypsum quarry.
For 2022 the company expects to recruit 6,000 new hires overall, with 2,700 of those jobs created in the construction sector. In the wake of disrupted supply chain problems Saint-Gobain is prioritizing the ability to produce as closely as possible to its end user customers. That’s a solid tactic for securing the supply chain at both ends.
According to the November 22, 2021 World Today News report Benoit Bazin: Growing in North America is Saint-Gobain’s priority and it can go quickly soaring energy prices, transport costs and the risks associated with difficulties in the supply and delivery of materials are the drivers for US growth in 2022 and beyond.
Saint-Gobain’s Wind Farms and the US Green Energy Grid
Sustainable green construction materials such as roofing, plaster, insulation, and siding are only part of the Saint-Gobain Grow & Impact strategy intended to capitalize on the global green economy. Last March, the 250-megawatt Blooming Grove Wind Energy Center announced that it had commenced commercial operations in December 2020. And Saint-Gobain was a major player.
“Invenergy entered into two separate Virtual Power Purchase Agreements (VPPA) with Verizon and Saint-Gobain North America for the output of the Blooming Grove project, contracts that were announced in 2020.”- Saint-Gobain launches new strategic plan and forecasts increased costs in 2021
The McLean County, Illinois, Blooming Grove Wind Energy Center generates 250MW, enough electricity to power up to 69,000 American homes each year. The project created 500 jobs during the 12-month construction period and nearly $120 million was invested in the local community via property taxes, landowner payments, and wages and benefits compensation.
“Achieving commercial operations at Blooming Grove Wind Energy Center is a significant milestone for Saint-Gobain North America” according to the company’s North America division CEO Mark Rayfield, who went on to characterize the investment as “ the largest renewable energy deal in our company’s history”.
“Our goal remains to reach net-zero carbon emissions by 2050. This project is not only a key driver in accomplishing this, but also a testament to our company’s purpose of making the world a better home.”- Mark Rayfield-CEO Saint-Gobain North America
At a cost of $389 million USD, the Blooming Grove project includes 94 each, 88.6 meter high-tower units. The wind farm facility has been in operation for a year now since its commissioning in December, 2020.
The lingering engineering questions to be addressed now are whether or not 94 wind turbines can generate the revenue required for “growth and impact” on calm windless days? And how long will it take to produce enough “zero-emission” electricity to erase the massive Big Foot -sized carbon footprints of resource-gobbling wind turbine production, massive concrete foundations, steel towers, end-of-lifecycle or bird-strike blade replacements, and hazardous, way up sky-high ongoing maintenance?
Resource Erectors took a deep dive in our September 2020 post, Just How Green is Your Local Wind Farm? There we explored the perils of “the green rush” or a premature reliance on a resource that literally depends on “whichever way the wind blows”. Or doesn’t. Let’s just hope that the winds of Illinois are steadier than they are in California, where by 2020 we were reporting about Scorn For Vital Energy Resources Leaves the California Power Grid at Risk of Collapse.
“Even before the blades start spinning, the average wind farm clocks up thousands of tons of CO2 emissions: “embedded” in thousands of tons of steel and concrete. So, every wind farm starts with its CO2 abatement ledger in the negative.” – How Much CO2 Gets Emitted to Build a Wind Turbine?
About Resource Erectors
Growth and impact aren’t just for the global giants of heavy industry. At Resource Erectors “going for the green” has more than one association. 85% of Resource Erectors placed professionals are still contributing to their industry-leading companies 5-years later and they’re compensated with some of the most lucrative competitive salaries in the heavy industry sector. If you’re an experienced heavy industry professional at the top of your game you can take the next step up with companies who are seeking your talents now.
Our corporate clients rely on us when it’s time to build the dream teams that build growth and have an impact in sectors that include engineering, civil construction, aggregates, concrete, mining, and more. Whether you’ve got essential vacancies in the C-suite or vital management, engineering, and production positions to fill our decades of specialized human resource experience is your hiring and recruiting solution.
We can help your organization dodge the disruptions of a bad hire and reduce the COV, that high cost of vacancies that pile up daily when experience and talent are lacking in key positions.
When you’re ready for growth and impact in 2022 and beyond, don’t hesitate to contact Resource Erectors today.
