• Seeking out and responding to acquisition opportunities in geographic markets where BPB is under-represented – such as last year’s investment in Thai Gypsum Products and today’s agreement to acquire part of Celotex Corporation in the US – and in other building material markets – such as the acquisition of Heidelberger Dammsysteme’s expanded polystyrene business in mainland Europe – which strengthen BPB’s existing national and regional market offerings.
  
  
• Continuing the development of plasterboard as a global growth product and building leadership positions in key geographic markets, recognising that the drivers of volume growth vary worldwide with the different stages of evolution of individual markets.
  
  
• Promoting the continuing penetration of plasterboard systems and gypsum plasters against other traditional building materials and methods of internal lining construction.
  
  
• Developing innovations in systems selling and customer services, expanding the product range with complementary products such as fire protection and other special purpose boards, ceiling tiles, insulation materials and flooring systems.
  
  
• Exploring the potential of the internet. In the UK, BPB has recently joined with other leading companies to launch Mercadium, a web-based market place for building materials open to all industry participants.
  

• 1999/00 saw the achievement of substantial cost reductions, equivalent to more than 2% of group turnover. Significant contributors to this achievement were the successful establishment of the group’s regional service centres and the initial results of the group-wide manufacturing productivity improvement programme. In addition our businesses benefited from the efficiencies arising from the re-organisation of BPB’s paperboard operations and its focus on being the world’s leading manufacturer of low-cost high-quality plasterboard liner.
  
  
• While last year’s rate of reduction was exceptionally strong, we intend to drive forward with further cost savings and greater operational efficiencies, maximising utilisation of our asset base.
  

• BPB’s people believe in working safely to deliver total product quality and superior customer service. Operating managements are resourced and required to ensure the continued achievement of these goals and to lead their teams through the tensions necessarily surrounding local, regional and global issues affecting our growing international group.
  
  
• We are increasing our efforts to retain, recruit, train and develop our people and to support succession planning activities to ensure that BPB increases its pool of talented and experienced managers to take the group forward.
  
  
• In order to align management resources with these strategies, the following promotions within the senior management team were made last month:
  
  
  • Paul Withers (43) was appointed to the newly created role of business development director with specific responsibility for identifying acquisitions, overseeing their integration within the group’s regional structure and providing global business co-ordination in emerging product sectors. He is also responsible for BPB’s Asian businesses and the group’s e-commerce developments.
    
    
  • Mark Higson (44) has also joined the Board as operations director with a remit to drive forward the group’s operating efficiencies and reinforce BPB’s embedded philosophies of safe operation and cost reduction. He continues as regional director for Northern Europe and BPB Formula, our industrial plasters division.
    
    
  • Jean-Pierre Clavel (52), regional director for Southern Europe, is the third new executive director. He continues to be responsible for the group’s largest single trading region (including France, Spain and Italy) and brings a wealth of international business experience to the Board.
    
    
  • John Colley (46), previously finance director of both British Gypsum and BPB Paperboard, is now regional director for Western Europe responsible for the group’s building materials activities in the UK and Ireland, and is now a member of BPB’s executive committee.
    

• Good volume growth of plasterboard and building plaster products across almost all key European markets.
  
  
• Improved overall selling prices of plasterboard products, on average rising 4%.
  
  
• Delivery of cost reductions in excess of those planned, providing savings equivalent to more than 2% of group turnover.
  
  
• Exceptionally strong North American demand albeit, as anticipated, with second half volumes below the first half record levels.

• The successful commissioning of a total of nearly 100 million square metres of new annual plasterboard capacity, 40 million in the Czech Republic and the Polish plasterboard markets, 12 million at our new Brazilian plasterboard plant, 5 million at our second plant in India, 20 million in China, and 18 million via a major capacity up-grade at our existing French plant at Chambery.
  
  
• Integration of the acquired Scandinavian companies into a cohesive regional plasterboard business.
  
  
• The commitment to build a combined 25 million square metre per annum plasterboard and 250,000 tonne per annum plaster plant at Termoli, east of Rome, to serve the fast growing domestic market and supply expanding Mediterranean export markets.
  
  
• The acquisition of Heidelberger Dammsysteme, one of Europe’s largest manufacturers of expanded polystyrene insulation products, with eight plants serving leading positions in the German, Czech and Austrian markets, extending the group’s product range and building upon BPB’s leadership position in expanded polystyrene insulation materials in France.
  
  
• The acquisition of 70.75% of Thai Gypsum Products, one of the leading plasterboard manufacturers in south east Asia and which controls a significant proportion of the region’s limited and strategically important high-quality gypsum reserves.
  
  
• The further development of our paperboard operations as an integrated activity, primarily focused on the manufacture of plasterboard liner for group and third party customers.
  
  
• The agreement reached today to secure our entry into the American internal linings market through the acquisition of the wallboard and ceiling tiles businesses of Celotex Corporation, which, when added to Westroc’s existing wallboard sales, will give BPB an 8 to 9% share of the 3 billion square metres of annual sales in North America, which itself represents more than 50% of world demand.

Richard Cousins
1 June 2000