Shane Brealey: refusing to use Gib in the 132-unit Kupenga at Point England. Photo / supplied
Government officials held emergency talks with building industry leaders yesterday in an attempt to hammer out solutions to New Zealand's Gib shortage.
Ministry of Building, Innovation and Employment representatives, Registered Master Builders chief executive David Kelly and Building Industry Federation chief executive Julien Leys attended the talks.
Winstone Wallboards' product supply problems are so severe that Simplicity Living managing director Shane Brealey said when he inquired in January, he was told to ask again in June.
And on this month's inquiries, he was told to ask by Christmas, he said. No business could carry on based on those terms, Brealey said.
Fletcher's Winstone Wallboards, headed by David Thomas, has a 94 per cent stranglehold on plasterboard supply.
Yesterday's summit was held in advance of Simplicity Living's Sam Stubbs and the Shareholders Association's Oliver Mander meeting on Friday with Fletcher Building chief executive Ross Taylor and chairman Bruce Hassall.
Stubbs said Simplicity has a $35m holding of 0.8 per cent of Fletcher shares and is raising concerns as a shareholder and customer.
Sector leaders, including Rick Herd, chief executive of one of the country's largest commercial builders Naylor Love, have expressed fears of widespread sector failures.
Without the crucial board, used for ceiling and wall linings, Simplicity has turned to Thailand, Naylor Love to Australia and even Fletcher Building's Winstone Wallboards imported it from an Australian business for six months.
After yesterday's meeting, John Sneyd, MBIE's building system performance general manager, said the discussion looked at opportunities for collaboration to mitigate supply chain constraints.
"MBIE has committed to working with Construction Sector Accord representatives, Master Builders and the Building Industry Federation, to play an active role to support the sector to continue to meet demand for residential construction," he said.
This was being done by:
• Engaging with the wider building industry to promote greater consideration of alternative methods in building design and encourage appropriate substitution of plasterboard products;
• Exploring further options government and industry may be able to take in managing the plasterboard shortage;
• Assessing the supply of other building products critical to the performance of the sector.
Kelly said the meeting's focus was squarely on removing regulatory barriers to allow builders to reject the Winstone Wallboards' product and more easily use plasterboard other than Gib.
The idea is to be able to get away from the product's stranglehold on the market - a problem Stubbs has termed "a masterclass in lobbying", referring to how embedded Gib is in New Zealand's multi-billion dollar construction sector.
"There's been concern that consenting authorities, being councils, will not accept applications for consents to use plasterboard which wasn't Gib," Kelly said, referring to wording in official documents.
Gib is named specifically in official building consent application documents that go to councils, Kelly said.
That leads to a natural bias and a default position, Kelly said.
Sector leaders and the state officials want to change that, Kelly said.
"Gib is just so well-known. It's such a popular product that it's a much easier path to specify it in consent documents. What we're working on is how to remove barriers so other suitable products can be used instead of Gib," Kelly said.
MBIE is developing advice, which is yet to be seen, he said. Quite when it will emerge remains unknown.
Kelly said builders and designers will be looking at how to educate their members more widely on how to use alternative products.
"I came out of the meeting pleased that there's been urgency. We can't afford to wait. Builders are going under because they can't get access to stock," Kelly said.
Julien Leys said several senior officials from the Government's Construction Sector Accord attended the meeting.
"We met to discuss how the Government and building industry could provide ways to reduce regulatory barriers to the importing and use of substitute plasterboard products," he said.
Discussions were also on how to educate and inform the sector about using alternatives to Gib.
Architects, specifiers, building consent authorities and builders needed to know more about how Gib alternatives could meet the Building Code, Leys said.
"The federation would like to see an end to architects and procurers using brand names so if a generic building material term plasterboard is used on plans and designs, then there should be no issues with what brands are used in the final build," he said.
The alternatives must comply with the Building Code performance requirements including providing the bracing support as part of the timber or steel frame wall system, he said.
Councils also needed to know they could approve substitute plasterboard products as a minor variation to a building design as opposed to requiring a whole new consent, which is a major barrier.
"Building consent authorities are inherently risk-averse and conservative and because Gib has become the default standard for plasterboard in most building projects, they have been reluctant to look at other plasterboard products," Leys said.
A streamlined approval process should mean plasterboard alternatives approved by foreign certification organisations like in Europe could be treated on par with BRANZ certification, he said.
A joint Government/industry-led approach that cuts regulatory barriers could start to make a big difference to the supply crisis, Leys said.
On Monday, 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 the 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 and customers turning to imports and shortages are blamed for financial failures.
Taylor said the business he runs was doing all it could, including building the new $400 million mill at Tauriko.
"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.
Fletcher Building also imported product for six months to try to ease the crisis and it hopes to start that up again soon.
But even that hasn't been enough to resolve the Gib supply shortage.
A Fletcher spokesperson said subsidiary Winstone Wallboards had imported Australian plasterboard for six months and also talked to giant manufacturer CSR about selling its product.
But that never resulted in any deal.
"Winstone Wallboards has been exploring a number of options to boost New Zealand's plasterboard supply, including importing plasterboard from Australia.
"We recently worked with ETEX Australia to provide standard plasterboard, which we imported for around six months," the spokesperson said.
The agreement included Winstone Wallboards supplying raw materials and expertise to ETEX to ensure the plasterboard met performance requirements.
"Unfortunately, Australia also has a plasterboard shortage, so ETEX ended their arrangement with us at the end of 2021 so they could focus on their domestic market," she said.
Fletcher shares have been trading down in the past few days, which some have attributed to the Gib crisis.
They closed last night at $4.90, having previously trading around $5.54 at the start of June and $7.93 a year ago.