Shane Brealey is angry about Gib being unable to supply New Zealand. Photo / Supplied
The head of one of New Zealand's biggest commercial builders says it has been forced to import plasterboard from an Australian manufacturing giant because of this country's Gib shortage.
Rick Herd, chief executive of Naylor Love, which has annual revenue of $850 million to $1 billion, said his company had no other choice than to import board from ASX-listed giant Boral because it couldn't get enough Gib.
Naylor Love was paying 15 per cent more for Boral than Gib, he said, but it was not about the price, rather security of supply.
Winstone Wallboards' Gib, which has 94 per cent of the New Zealand plasterboard market, could not meet that obligation to supply clients in this country, Herd said.
"Necessity is the mother of invention. Gib will lose a hell of a lot of loyalty. Smaller companies who aren't as resourceful as Naylor Love will go under because of it. Absolutely they will. They won't be able to get Gib. Jobs will run late," he said.
Naylor Love has imported about 5000sq m of plasterboard already and has a further 15,000sq m on its way.
News of Herd's move follows Shane Brealey yesterday announcing Simplicity Living was importing four containers of Thai plasterboard each month, would do so for a decade and was frustrated at Gib's inability to supply here.
The business, well into restoring the Christ Church Cathedral, will use the Australian plasterboard on many big commercial jobs but Herd said not the famous Christchurch cathedral one.
Herd named Auckland's Civic Administration Building where Boral might be used. Naylor Love is working there for John Love, converting the iconic ex-Auckland Council headquarters into apartments.
Work on Wellington Town Hall, Dunedin Railway Station, doubling the capacity of the Skyline Gondola and Restaurant in Queenstown were other jobs where Boral board could be used in ceilings and walls, he said.
Naylor Love is the preferred tenderer for the new Ikea at Sylvia Park, he said, and that too could get Boral, depending on circumstances at the time and what was best for the client, he said.
The builder is also the construction head on Kiwi Property Group's build-to-rent project at Sylvia Park. It is also building a new AUT block at the Akoranga Campus, Northcote.
Naylor Love had just finished work at Lower Hutt mall Queensgate and two new Queenstown hotels, Herd said.
In Invercargill, Naylor Love is working on new $183m offices for HW Richardson Group, due to be completed by next year.
The builder was a commercial-orientated construction firm and was using more Braceline and Fyreline Gib products rather than the standard Gib plasterboard which apartment and townhouse builders like Shane Brealey were more likely to use, he said.
"We will continue to support the New Zealand supply chain like Carters. What we're doing is more in the short term. We're just making sure we're not going to run out," Herd said of the Boral importing move.
Naylor Love was buying the Boral brand via a local distributor because Boral couldn't supply directly to clients like the building business, Herd said.
"We're getting around 20 to 30 per cent of the supplies we need over a year from Boral. We started importing the Boral product about three to four months ago. It's premium, we're paying more than we would [for] Gib.
"We chose Boral because it's readily recognised by consultants here," he said.
"There are two or three well-respected brands. We're interested in talking to Shane Brealey and his supplier in Thailand.
"What will happen is that Winston has trod a hole in their feet. If I was managing that organisation, I would have recognised we couldn't supply the market. Knowing we had 94 per cent share, I would have been importing and stockpiling to meet market demands to ensure our customers had enough," Herd said.
"What they did by saying 'what we've got is what we've got' means people will go to the import market. When their mill in Tauranga opens, they will find they lost a big share of the market," he forecast of the $400m job to build a new Gib factory to replace Penrose.
Members of the Construction Accord had been working on measures to resolve the supply crisis. Registered Master Builders chief executive David Kelly and staff from the Ministry of Building, Innovation, and Employment were also working on the issue, Herd said.
Naylor Love had not been short of plasterboard and had suffered no problems.
"But we knew we were going to be short and that's why we placed orders," Herd said of its Australian move.
Asked about builders like Brealey importing plasterboard, a Fletcher spokesperson indicated a degree of comfort with that.
"We 100 per cent believe in a free-market and support any initiatives to supply plasterboard to the industry that will help meet the high levels of demand New Zealand is currently experiencing," the spokesperson said.
However, Winstone Wallboards also has a three-pronged strategy to resolve the supply deadlock: increasing production, controlling supply and building a vast new factory is the three-step plan on which the national business is pinning its hopes.
After extraordinary stories lately about prices and people's actions to try to get their hands on Gib, Fletcher outlined steps being taken to cope with unprecedented demand.
"We recognise it's tough for people who haven't secured their plasterboard order ahead of needing it on a build and are doing as much as we can to increase volume to the market," it said.
It is operating its Penrose and Christchurch wallboard manufacturing plants at rates never seen before - full capacity. Gib board is being rationed to try to manage extraordinary demand.
But the third step is set to top all these: the new $400m plasterboard manufacturing plant being built at Tauranga's Tauriko, a gigantic 63,000sq m factory the size of about seven rugby fields.
Fletcher says more than 50,000 homes are being consented annually right now, an all-time record.
Construction business erected one of NZ's most complex buildings at the university campus.