USG Corp., a manufacturer of building systems, announced Monday that L&W Supply, its specialty distribution subsidiary, will acquire California Wholesale Material Supply, Inc. (CALPLY), a building materials distribution company, for $280 million.
USG also announced Monday that its United States Gypsum Co. subsidiary will construct a new $220 million Sheetrock brand gypsum panel manufacturing plant in Stockton, Calif. The facility is scheduled to begin operations in 2010.
CALPLY has annual sales of approximately $600 million, and employs nearly 900 people at 30 facilities in seven Western states and Mexico. L&W Supply, operates more than 220 specialty distribution centers in the U.S., and contributed $2.5 billion to USG’s annual sales in 2006.
The acquisition and the new plant will help USG to expand its presence in the Western U.S., according to the company.
William C. Foote, chairman and CEO of USG Corp. said the new low-cost manufacturing capacity plant will replace two high-cost manufacturing lines in California that were previously closed.
The Stockton plant, which USG said will be the world's largest wallboard manufacturing facility, will have about 150 employees and is expected to produce about one billion square feet of Sheetrock brand wallboard per year.
It will also showcase USG's corporate environmental responsibility. The plant plans to use 100 percent recycled paper for the surfaces of the finished wallboard products and recycle 100 percent of its production waste. A closed-loop liquid effluent system will prevent discharge from getting into nearby waterways.
