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: Gypsum wallboard producer and construction firm Fletcher Building has reported a 20% year-on-year drop in domestic housing demand during the first quarter of 2023. The Australian newspaper has reported that the company attributed the decline to ‘soaring’ interest rates in the country. It now expects to sell 800 residential units in 2023, 20% below its previous expectation of 1000 units. Fletcher Building said that building materials costs rose by 5 – 10% between 2020 and 2022, due to ‘higher input and commodity costs’ in production.

CEO Ross Taylor said that Fletcher Building faces labour shortages in its civil construction business, but maintained a strong order pipeline. Taylor said “It won’t drive an uptick in volumes but it will underpin the volumes in the next three to four years.”

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: The government has renamed its Plasterboard Taskforce as the Critical Materials Taskforce and extended its remit to other building materials alongside gypsum wallboard. The expanded taskforce's aim will be to prevent product shortages, with a focus on maximising productivity and cushioning the effects of supply-side dangers. The government foresees further materials shortages amid anticipated 'global trade headwinds.'

Minister for Building and Construction Megan Woods said “While we can be optimistic about the opportunities for our economy, we also need to remain cautious. We know we are facing a period of global turmoil." Woods continued “The Critical Materials Taskforce will build on the successes of the Plasterboard Taskforce, and use the valuable lessons learnt to be proactive and forward-looking, so we can identify emerging risks and respond as quickly as possible. Bringing together construction, building consent and supply chain experts into a taskforce earlier this year showed how government and the sector successfully worked together to troubleshoot plasterboard shortages quickly and pragmatically.”

New Zealand's gypsum wallboard imports grew by a factor of five year-on-year to 4.6Mm² during the first 10 months of 2022. Domestic producer GIB said that it will continue to operate at full production capacity through the 2022 Christmas - New Year period in order to rebuild resilience stock levels. The company continues to make deliveries based on an allocation system. It asked customers to contact their retail suppliers if they have any spare pallets for collection, to help with deliveries.