USG Corp. plans to invest $1.2 billion in a new manufacturing facility in Orange, Texas, a project expected to create nearly 200 jobs and expand the building products manufacturer's footprint in the state.

The Chicago-based company announced the investment this spring. The project marks a major expansion for USG, which has been pursuing a presence in Orange for more than a year, reported by Nathan Owens of Manufacturing Dive.

Local officials began laying the groundwork for the project in 2024, when the city rezoned property formerly occupied by a shuttered International Paper mill. Incentive agreements followed in early 2025 as USG evaluated the site for development. The paper mill's closure resulted in the loss of nearly 500 jobs in the region.

Earlier plans called for construction to begin in late 2025, with the facility entering operation by early 2028. The timeline was later adjusted, though details about the changes were not immediately available. Representatives from both USG and the City of Orange did not immediately provide additional information.

"This new plant builds upon our hundred-year-old roots in Texas," USG President and CEO Chris Macey said in a statement. "It reflects our continued commitment to our customers' success and the state's prosperity."

The project qualified for incentives under Texas' Jobs, Energy, Technology and Innovation Act, which provides property tax limitations for eligible capital investments and job-creation projects. USG partnered with the Little Cypress-Mauriceville Consolidated Independent School District through the program.

District Superintendent Stacey Brister said the investment presents new opportunities for workforce development and career training in the region.

"We are committed to preparing our students with the skills, experiences and mindset necessary to succeed in high-demand careers, and we look forward to working alongside USG to build a strong, future-ready workforce for our region," Brister said.

Orange City Council members voted unanimously in April to amend the construction schedule tied to a Chapter 312 tax abatement agreement supporting the project.

Founded in 1902 through the merger of 30 gypsum and plaster companies, USG has grown into one of North America's largest building materials manufacturers. The company became part of Germany-based Knauf Group in 2019, strengthening Knauf's position in the North American construction products market.

USG Manufacturing in North America

USG maintains one of the largest building materials manufacturing networks in North America, with more than 70 locations and over 40 production facilities across the United States. The company manufactures a broad portfolio of gypsum-based products, including Sheetrock brand drywall, ceiling systems, flooring underlayments and tile backer boards used in residential, commercial and institutional construction.

In addition to its extensive U.S. footprint, USG serves customers throughout Canada, Mexico and the Caribbean, providing regional production capacity and distribution capabilities that help support major construction markets. Since joining the Knauf Group in 2019, USG has continued investing in manufacturing modernization, capacity expansion and workforce development to strengthen its position as a leading supplier of building materials across North America.

The company's planned $1.2 billion investment in Orange, Texas, represents one of its largest recent manufacturing projects and underscores its long-term commitment to expanding domestic production while supporting economic growth and job creation in key regional markets.

Read Walls & Ceilings' exclusive interview with new President and CEO Chris Macey here.