Fletcher signals plasterboard relief ahead
Production on rise and should meet demand by October
Fletcher Building says it has ramped up plasterboard production and expects to meet market demand by October, because of a winter slowdown. Winstone Wallboards, which supplies roughly 95 per cent of all plasterboard in NZ, under its Gib brand, said it’s continuing at full production and despatching 3.25 million sq m of plasterboard a month.
It helps that builders are pushing back their deliveries by up to two months, and weather and financial pressure are seeing an increasing number of projects shelved.
By government estimates, at the current rate of consents — about 50,000 a year — about 1.3 million sq m of plasterboard goes into new builds every month, equal to about 2662 new residential dwellings.
By Fletcher’s estimates, a typical three-bedroom house uses about 700 sheets — a small apartment coming in at about half of that.
In response to a surge in building, Fletcher ramped up production at its two operational factories between March and May and also reinstated imports from Australia, lifting supply by an estimated 10 per cent.
Still, it’s been criticised for understocking during a record building surge, a demand largely ignited by Covid-inspired low interest rates.
In early June, several major commercial builders, led by Simplicity Living and Naylor Love Construction, said they would “fire” Winstone as a product supplier and instead import products directly from Thailand.
Simplicity Living managing director Shane Brealey said the firm had locked in “substantial cost savings”, with a landed cost delivered on-site at $19.50 a sheet, about a fifth cheaper than the local brand, Gib.
He told Businessdesk the equivalent of Gib Aqualine was being imported at a 40 per cent lower price.
Taskforce action
In response, a plasterboard taskforce set up on June 21 by Building and
Construction Minister Megan Woods and industry representatives arranged to import about 100 containers of the product — 220,000sq m, or enough for about 440 houses.
Woods said social housing provider Ka¯ inga Ora would use imported plasterboard for its retrofit work.
A Fletcher’s spokesman said the firm was now seeing some positive trends which reflect “true levels” of demand for plasterboard.
He said the firm’s direct-to-site delivery service had also experienced up to 25 per cent order rescheduling, as builders advised their sites weren’t ready for delivery, numbers that were slowly improving as demand pressure eased and delivery times were pushed back — much of that on seasonal weather delays.
Placemakers’ “emergency” supply pool process, meanwhile, has also been progressing well, catering for about 16 applications a week. The Fletcher-owned merchant had delivered about 5000sq m of board to those builders who qualified.
The spokesman said the company still expected “equilibrium” to be restored within the next two months, with plants running “continuously” until the new plant came onstream — scheduled for next May.
Alternatives
The opening of the new $400 million Tauriko plant near Tauranga, delayed by about a year because of post-covid lockdowns and border closures, is expected to increase overall capacity by about 30 per cent, Fletcher said.
According to the Commerce Commission’s draft market study into building supplies, at least 91 per cent of new residential builds use Gib as their primary wall lining material, with the annual value of plasterboard sales worth more than $250m.
Other providers include Thailandbased Elephant Plasterboard, Bunnings-supplied Proroc, Mitre10’s own distributed Handyboard and USG Boral/knauf — now supplied into the market in limited quantities by the Youngman Supply Group after the company quit NZ last August.
The commission says no other supplier holds more than about a 0.5 per cent market share on its own and architects, designers and even councils will often specify Gib.
Another significant issue with replacing Gib is trademark protection by Winstone for board colours.
Colour coded
Those “colour-coded” issues mandate the use of green for wet area board and red or pink for the fire-resistant board. And because Winstone has a trademark for the blue colour for use in wet areas, despite not making or selling blue wet area board, international suppliers must do separate factory runs of different colours to supply the NZ market, further locking in Fletcher’s “near monopoly” status.
Simplicity’s Brealey said a more important issue would be the “many hundreds” of builders and developers who have gone bust already this year, largely because of plasterboard and other product delays and price hikes to other critical supplies.
The sector employs about 280,000 workers, 85 per cent of them in firms of five people or fewer. Brealey estimates more than 100 firms have already gone to the wall.
“By the time Fletcher’s gets there, they’ll be a glut, anyway.”