At least five major drywall producers--USG, National Gypsum, Lafarge, CertainTeed, and Temple--have announced plans to raise prices on their products by 25% effective Dec. 5 or 6. USG appears to have triggered the price hike with its memo on Nov. 3.
"Over the past three years, USG's wallboard business has sustained large financial losses as wallboard market opportunity has declined by more than 50%," USG wrote in its announcement to customers. "In response to this unprecedented decline, we have taken aggressive actions to right-size our organization and production capacity. Despite these efforts, our wallboard business has been unprofitable since 2007. Returning our wallboard business to profitability will require continued cost reduction as well as wallboard price improvement."
USG announced last month that its United States Gypsum Co.'s operating loss deepened to $46 million in the third quarter on an 8.2% drop in net sales to $325 million. It also said the operating loss at USG's building products distribution segment, L&W Supply Corp., improved to $24 million despite a 15% drop in net sales to $281 million, largely because 2009's numbers included $49 million in charges.
National Gypsum's price hike memo gave no reason for the increase, while the Lafarge memo merely suggested that customers contact their sales rep if they had questions.