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Simplicity Living managing director Shane Brealey. Photo: Supplied / Simplicity Living.
A social housing developer has fired Fletcher Building as its supplier of GIB plasterboard due to lengthy product delays.
Simplicity Living, which is owned by the not-for-profit KiwiSaver provider Simplicity, says the ongoing issue has forced it to resort to importing an alternative product from Thailand to complete its build-to-rent developments.
Fletcher Building has a near monopoly on the plasterboard market and the chronic shortages, which have been blamed on unprecedented demand, have been well-publicised.
Some in the building sector have warned that the ongoing shortages could result in builders going broke because they could not finish residential projects.
Simplicity chief executive Sam Stubbs told RNZ there was a cost of building crisis in New Zealand, but Fletcher Building's hubris has made the situation worse.
He says Fletchers has known for at least 12 to 18 months that there was going to be a supply squeeze, based on residential building consents.
"They've really done very little to actually manage what was clearly going to be a slow train-wreck.
"They had the ability, we think, to actually either make more product or bring in more product to satisfy demand.
"Instead, what they have done, is they have actually left a whole lot of smaller developers and builders hanging out to dry with total uncertainty about delivery times."
"In other countries the size of New Zealand you have three or four very large plasterboard suppliers and they openly compete in the market.
"Plasterboard is not in short supply anywhere else in the world that we can see, why is it in short supply here?"
Fletcher Building's chief executive of its products division, Hamish McBeath, says it is a free market.
"We ... fully support any initiatives undertaken by other businesses to supply plasterboard to the industry to assist in meeting the high levels of demand New Zealand is currently experiencing."
He says since other competitors have left the market, it has been left to pick up the shortfall at a time of high demand.
McBeath says its manufacturing plants are running around the clock, despatching enough plasterboard to supply 1000 new, average sized homes a week and it was also working Australian supplier to supplement demand.
The company is also planning to open a new factory near Tauranga in June 2023.
Sam Stubbs says Simplicity Living is responding to the crisis by importing an alternative to GIB's plasterboard and aqualine products that are 20 per cent and 40 per cent cheaper.
The alternative product would comply with New Zealand's building code and was already used in the United States and the Pacific, he says.
"We get GIB equivalent product in New Zealand in eight weeks from South Asia, but it takes 8 months from South Auckland.
"In an ideal world we would buy 100 percent sourced New Zealand product."
The first container has just landed from Thailand and the company has made forward orders for four containers a month for the next three years.
Simplicity Living intends to make its contacts available to anyone who wants to import the plasterboard directly.
The Commerce Commission is currently investigating the building supplies industry.
Posted on 13-06-2022 22:13 | By groutby
....yes I agree on your point in regard to product cost, but that doesn’t address any of the other issues does it.........also even including shipping which has escalated beyond reason, it’s still cheaper....I think the Fletcher response is ’offhand’ at the least.........
Posted on 13-06-2022 07:56 | By Thats Nice
Don’t forget it costs ALOT more to produce here because of higher wages and the cost to actually run a plant - power, water, ACC costs etc etc.
Posted on 12-06-2022 10:21 | By groutby
...of a monopoly industry flourishing and worse, being allowed to. It is not the first time I have read comments from Fletcher management which really seem to clearly say ’we don’t give a rat’s a**e!’....and with 94% of market share why would they?...even though (as I read it) the imported Thailand product is every bit as good and CHEAPER!, even after import costs. Is that a sign of ’ethical’ business now in NZ? I do hope councils around the country can accommodate any permit requirements promptly (if needed) to allow building progress. With the new plant in Tauriko producing in the near future I am sure the situation will be eased, but what does it really say about the Fletcher company ethics?
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