Gypsum industry news

New Zealand: Winstone Wallboards’ parent company Fletcher Building says that it will ‘vigorously defend’ against charges by the New Zealand Commerce Commission of alleged anti-competitive customer rebates between 2017 and 2022. RNZ News has reported that rebates of the type allegedly deployed by Winstone Wallboards are ‘common’ competitive manoeuvres in the sector. The Commerce Commission says that it will file an action before the end of October 2024.

New Zealand: Fletcher Building has appointed Tony Dragicevich as a non-executive director and member of its board of directors, effective from 1 August 2024. Dragicevich previously served as managing director and CEO of aluminium producer Capral, and has held leadership positions at Wattyl Group, GWA Bathrooms and Kitchens, Red Paper Group and Carter Holt Harvey Insulation. He holds a commerce degree from the University of Auckland.

Acting chair Barbara Chapman said "Tony is a highly accomplished CEO and director who brings significant experience in leading distribution and manufacturing businesses across Australia and New Zealand. His successful career in the building products sector, combined with his strong track record of delivering value for shareholders, make him an excellent addition to Fletcher Building's Board."

New Zealand: Fletcher Building announced the retirement of its chief executive officer Ross Taylor on 14 February 2024. As part of a board renewal review, chair Bruce Hassall will also leave. Fletcher Building’s People and Remuneration Committee chair, non-executive director Barbara Chapman, will lead the search process for replacements. Handovers are scheduled to take place in October 2024.

The producer said “The board thanks Bruce and Ross for their leadership and contribution since 2017. During this period, they have led the turnaround of Fletcher Building, which has seen the core businesses becoming more focussed and profitable, with improved earnings, margins and returns.”

New Zealand: Winstone Wallboards has started despatching wallboard produced at its new Tauranga plant around New Zealand’s North Island. General manager David Thomas said that GIB wallboard products made in the new plant had achieved performance levels consistent with those of wallboard made in the company’s Auckland and Christchurch plants. Earlier in August 2023, Ross Taylor, the chief executive officer of Fletcher Building, Winstone Wallboards’ parent company, said that the Tauranga plant had commenced production. The site is scheduled to become fully operational by the end of October 2023.

New Zealand: Fletcher Building has managed to grow its earnings for its Building Products division in its 2023 financial year despite a weakened residential market in the second half of the year, poor weather and rising input costs. It noted that “substantial cost increases were absorbed on gypsum, paper, resin and freight, partially offset by lower utility costs from the drop in electricity prices.” It combated this through cost management and ‘pricing discipline.’ Revenue from the group’s Building Products division fell slightly to US$863m in the financial year to 30 June 2023 from US$873m in the same period in 2022. However, earnings before interest and taxation (EBIT) rose by 4% year-on-year to US$120m from US$115m.

Ross Taylor, the chief executive officer of Fletcher Building, said “Our US$240m investment in Winstone Wallboards GIB plasterboard manufacturing and distribution facility in Tauranga has now commenced production and will be fully operational by the end of October 2023. The new plant’s state-of-the-art technology delivers more production capacity allowing for product innovation and future growth.”

Overall the group’s revenue dropped slightly to US$5.07bn from US$5.08bn and EBIT dropped by 29% to US$298m from US$420m. The large drop in earnings was mainly attributed to additional costs allocated to the New Zealand International Convention Centre and Hobson Street Hotel project. Adjusted for significant items the group’s EBIT rose by 6% to US$477m from US$452m.

New Zealand: Winstone Wallboards says that it successfully started a test run on the new production line at its new Tauriko gypsum wallboard plant in mid-May 2023. In a statement general manager David Thomas said “The team successfully put ‘slurry on paper’ and ran board down the line and, beyond our initial plan, through the dryer.” He added the company was confident that it would be producing wallboard in the second half of 2023.

New Zealand: Winstone Wallboards says it is moving away from its gypsum wallboard allocation model as a market shortage has eased. The company’s general manger David Thomas said that its GIB Weatherline and GIB Barrierline products were no longer on allocation. It now intends to take all of its wallboard products out of allocation over the next few months. The subsidiary of Fletcher Building introduced an allocation model of wallboard supply in the summer of 2022 to cope with a national shortage.

New Zealand: Fletcher Building says it will stop using retroactive quantity-based rebates after it learned that the Commerce Commission had started an investigation into the practice in November 2022. The owner of Winstone Wallboards defended the use of such rebates and said they were common in the sector. However, it added that it was showing ‘leadership’ and had considered the commission’s preference that it not use quantity rewarding rebates. It will instead switch to a flat pricing model based on volume.

The Commerce Commission published its final report look at general residential building supplies following the release of a draft in August 2022. It set up nine recommendations to improve competition and supply of such products generally. Two main factors it identified as making it difficult for competing products to be introduced and expand in the market were the building regulatory system and quantity-forcing rebates paid by established suppliers to merchants. It noted that, under certain conditions, these types of rebate could reinforce the way the existing regulatory system was making it harder for new or competing products to access the market.

New Zealand: Members of the building sector report that a local shortage in gypsum wallboard has started to ease. Christchurch-based Co-operative Building Supplies chair Carl Taylor told Radio New Zealand News, that since Winstone Wallboards announced a number of corrective measures in June 2022, supply had improved a "fair bit" but it was not back to levels seen before the Covid-19 pandemic started. Rick Herd, the chief executive officer of building company Naylor Love, added that Winstone Wallboards had increased its production but that a reduction in market demand had also helped.

In late September 2022, Winstone Wallboards’ general manager David Thomas thanked his customers for their patience. He added that the company was getting closer to levelling up supply with demand for wallboard across the country. Parent company Fletcher Building Materials previously said that it expected the market to stabilise by October 2022. Winstone Wallboards’ GIB product range is the main brand of wallboard used in New Zealand. The company is reported to hold around a 95% share of the local market.

New Zealand: Winstone Wallboards says that the allocation model it introduced in July 2022 and other measures it has taken are starting to ease a shortage in gypsum wallboard. The company’s general manger David Thomas said that by operating both of its wallboard plants continuously and an upgrade to its Auckland plant in July 2022 had increased its production capacity. It has also been able to resume importing wallboard from Australia. The company is currently despatching around 3.25Mm²/month of gypsum wallboard.

The company said that is going to reduce merchant lead time between order placement and delivery from October 2022 in order to improve the effectiveness of its allocation system. It hopes that doing this will provide more flexibility along the supply chain for end-users to secure product when it is needed for installation. It also asked tradespeople to continue communicating with merchants about requirements and timings in order for the wallboard producer to understand real demand levels.

Thomas said, “The team and I recognise the responsibility Winstone Wallboards has in supplying plasterboard to the New Zealand market and want to assure you we are committed to living up to that responsibility. That we have retained such a role is not just an outcome of what we do but, a result of the high level of support the market has provided us over decades.”