Gib crisis: Fletcher Building CEO Ross Taylor cites stockpiling as partial cause

Ross Taylor tells of the response to the Gib crisis. Photo / Jason Oxenham

Fletcher Building's chief executive says Gib stockpiling is partly to blame for the supply shortage because fewer pallets are being returned - clear evidence of hoarding.

Ross Taylor said he didn't want to over-emphasise this but it was certainly a contributor to Winstone Wallboard's Gib shortage.

"Since the start of 2022, stockpiling has amounted to around 10 to 20 per cent of our present production volumes. It's part of the problem, not the whole problem."

Taylor was responding to the anger expressed against subsidiary Winstone Wallboards' inability to supply the amount of Gib needed.

Customers are turning to imports and shortages are blamed for financial failures.

Simplicity Living is importing Thai plasterboard and says it has banned Gib and Naylor Love is buying Australian board.

Taylor said the business he runs was doing all it could, including building the new $400 million mill.

"We're producing enough wallboard to cover 50,000 houses a year," Taylor told the Herald via Zoom from Fletcher's head office at Penrose.

"Since early this year, people are storing wallboard. Plasterboard gets used, and pallets come back. We're not getting enough pallets back so that suggests there is wallboard out there," Taylor said.

New Zealand is only building 35,000 to 40,000 new homes a year, despite consents running at more than 50,000, he said.

Gib was not the only thing short in the building sector either, he emphasised, referring to
shipping problems and a shortage of trades and labour.

"There are a lot of challenges for our customers out there," Taylor said, empathising with those struggling to cope.

Gib was being manufactured in record volumes to respond to demand: "It's really making sure we're doing as much as we can to maximise our own production. All our manufacturing facilities operate 24/7. We're maximising what we're doing. We've been working on sourcing alternate supply to supply," he said referring to Fletcher itself importing materials.

"Most of our efforts are going into maximising production and finding alternative sources.

"We get what's happening. We have a lot of empathy for what customers are feeling and the challenges. It's not just us. We get it and we're going to really try hard."

The company decided to build the new Tauriko mill in 2019, well before new house volumes ramped up so much, he stressed.

The new $400m Winstone Wallboards' factory at Tauriko. Photo / supplied

"When we made a decision to invest in Tauriko and $400m, we made that back in 2019. Consents were running at 30,000 per year. So we made that well ahead of getting anywhere near our capacity constraints.

"But in 2020 Covid occurred. We lost six to 12 months due to Covid responses. That slowed us down," he said referring to the new factory being built.

Then housing consents spiralled.

"I don't think anyone saw what then happened with housing and consents and alterations and additions. We saw consents go dramatically up from 30,000 a year to 50,000 a year."

Winstone Wallboards was only a year away from completing the new factory, he said.

He denied any Gib had been exported, saying it was only made for the New Zealand market.

"We're only 12 months away from completing Tauriko. The importance of having manufacturing in New Zealand - you do get a level of resilience. We're really focused on customer service and sourcing what we can offshore as well.

"It's just the challenges right now. It's not just wallboards but challenges around a number of building products - enough labour and skills, a lot of frustration getting houses approved," he said.