Gypsum plaster powder is produced at a kiln or magma kiln from gypsum, alabaster, selenite, or satinspar (but not anhydrite) and an empty bag. The production of gypsum plaster powder requires the Furnace operating skill. It is used in the production of plaster casts, an item used by doctors to immobilize the broken bones of injured dwarves. If you don't get the option to produce it at the kiln even though you have all requirements, use the command "make plaster powder" in the manager menu.
Gypsum plaster is listed under "stones" but you don't need to have this selected (as it normally only appears in-game inside of bags).
[INORGANIC:PLASTER] [USE_MATERIAL_TEMPLATE:STONE_TEMPLATE] [STATE_NAME_ADJ:ALL:gypsum plaster] [DISPLAY_COLOR:7:7:1][TILE:'#'] [SOLID_DENSITY:2787] [IS_STONE] [HARDENS_WITH_WATER:INORGANIC:GYPSUM] [MATERIAL_VALUE:3] [NO_STONE_STOCKPILE]