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Current as of 27/11/14 07:40PM NZST

Anne Gibson

Property editor of the NZ Herald

Fletcher defends market dominance

Boss of wallboards division defends 94 per cent market share as outcome of inquiry looms.

Winstone general manager David Thomas says the firm makes and delivers the best product. Photo / Chris Gorman
Winstone general manager David Thomas says the firm makes and delivers the best product. Photo / Chris Gorman

The head of Fletcher Buildings' Winstone Wallboards is defending its dominant New Zealand plasterboard position, as the company awaits a Commerce Commission ruling.

General manager David Thomas said Winstone Wallboards had a 94 per cent market share but only because it manufactured and delivered the best product to customers.

"People do have other options and they have had for the last 20 years," Thomas said, citing Elephant Plasterboard and other products including Chinese board.

He also defended the firm's prices.

"The price is higher than in Australia because we get two products from Australia, gypsum and paper for the plasterboard liner, and Sydney has got [more than] New Zealand's population and there are scale issues there."

The outcome of a Commerce Commission probe into Fletcher Building's role in New Zealand's plasterboard market is pending.

In late September, Fletcher said it was advised the commission intended to inquire into its plasterboard supply arrangements with building supplies merchants.

"The company will fully co-operate with the Commerce Commission, and is confident that its supply arrangements comply with the Commerce Act," said corporate affairs general manager Rick Osborne.

Thomas rejected criticism that New Zealand houses were expensive because of traditional building material monopolies. "I don't think our market share and building material costs are related," he said.

A company spokeswoman cited a Ministry of Business, Innovation and Employment paper released last year that found land made up 47 per cent of the total cost of a new house and building materials generally 27 per cent. "We've worked out the cost of plasterboard/wallboard makes up about 1 per cent of the cost of a new house build, from a calculation based on the cost of building at $650,000," she said.

A Commerce Commission spokesman said no further information would be issued on the plasterboard inquiry at this point because it was ongoing.

Thomas said Onehunga-headquartered Winstone produced 21.5 million square metres of plasterboard in the year to June 30 last year, enough to line about 15,000 residences, fill all commercial orders and export product.

In January last year, Economic Development Minister Steven Joyce said the Government had awarded German company Knauf Plasterboard a chunk of a $40 million plasterboard supply deal for the Christchurch rebuild and he lauded the competitor.

"The introduction of Knauf into the New Zealand market will not only save the Government up to 6 per cent in plasterboard system costs for the residential rebuild, it also [has] the potential to provide benefits to New Zealanders over the longer-term," Joyce said at the time.

In a tour of Winstone's Onehunga plant, Thomas showed the Herald a 10m-high pile of gypsum and a 228m-long production line which makes 10mm-thick GIB standard plasterboard at the rate of 58m/minute - almost 1m of plasterboard made every second.

It takes 43 minutes for a sheet to leave the forming end of the manufacturing line and reach the dry board bundler - the equipment which puts the end tape on the sheets.

Most plasterboard leaves Winstone's dispatch centre to go directly to building sites and only a portion goes to trade merchant stores.

Thomas said that was partly due to the weight and size of sheets; handling safety measures had been considerably stepped up lately in an attempt to minimise accidents.

Thomas said an average-sized New Zealand house had about 700sq m of plasterboard.

Winstone Wallboards

* Produces 94% of NZ's plasterboard under GIB brand.
* Employs 210 people.
* NZ's sole manufacturer of gypsum plasterboard.
* 75% of sales for housing, 25% for commercial building.
* Manufactures in Auckland and Christchurch.

Source: Winstone Wallboards.

- NZ Herald

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