USG Corp. (USG) Enters Strategic Partnership with Zawawi Group; Sees Investment of $60M
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USG Corporation (NYSE: USG) today announced that it has entered into a strategic partnership with the Zawawi Group of Oman to meet the growing demand for its building products in the Middle East and India. The investment by USG opens up new opportunities for the company in the rapidly growing Indian wallboard market, and will provide commercial construction projects in the region better access to USG’s industry leading wallboard products. USG expects the investment of approximately $60 million to be incurred over two years, with the majority in 2012.
USG’s partnership with the Zawawi Group will be multifaceted. The first phase will be establishment of a mining joint venture through which USG will acquire 55% of Zawawi Gypsum, which holds the mining rights to a gypsum quarry in Salalah, Oman. The joint venture will develop infrastructure and operate the quarry. Salalah has shipping access to many ports on the Indian coast and will be an ideal location for providing gypsum to future USG wallboard plants, as well as to cement manufacturers in the region. Quarry mining operations are targeted for startup in the third quarter of 2013.
The second phase of the partnership will be a 50/50 manufacturing joint venture with Zawawi Minerals to build and operate a new low cost wallboard plant in the Salalah Free Zone, Oman. The Free Zone in Oman is an enterprise zone that has been operational for three years and has attracted in excess of $4 billion in investments from international companies. The plant site is in close proximity to the gypsum quarry and port facilities, facilitating efficient access into markets in India and the Middle East. The target for commencement of wallboard production operations is the fourth quarter of 2013.
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USG’s partnership with the Zawawi Group will be multifaceted. The first phase will be establishment of a mining joint venture through which USG will acquire 55% of Zawawi Gypsum, which holds the mining rights to a gypsum quarry in Salalah, Oman. The joint venture will develop infrastructure and operate the quarry. Salalah has shipping access to many ports on the Indian coast and will be an ideal location for providing gypsum to future USG wallboard plants, as well as to cement manufacturers in the region. Quarry mining operations are targeted for startup in the third quarter of 2013.
The second phase of the partnership will be a 50/50 manufacturing joint venture with Zawawi Minerals to build and operate a new low cost wallboard plant in the Salalah Free Zone, Oman. The Free Zone in Oman is an enterprise zone that has been operational for three years and has attracted in excess of $4 billion in investments from international companies. The plant site is in close proximity to the gypsum quarry and port facilities, facilitating efficient access into markets in India and the Middle East. The target for commencement of wallboard production operations is the fourth quarter of 2013.
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