A $400 million Tauranga expansion, NZ International Convention Centre repairs and reassurances on a motorway project north of Auckland were topics covered by Fletcher Building's chief executive in a post-result conference call today.
Ross Taylor talked to analysts and the media after releasing the result for the half-year to December 31, 2019.
Fletcher today announced plans to spend about $400m developing a new Winstone Wallboard plasterboard or gib board plant at Tauriko industrial park in Tauranga: half of that is the cost of land and the rest is the cost of plant and equipment.
• Fletcher Building net profit drops by $7m to $82m 'in line with expectations'
• Fletcher Building: better year ahead after slight gain in 2019?
• Fletcher Building turnaround: last year's $190m loss becomes $164m profit
• Leading questions: Fletcher's Ross Taylor on restructuring, safety, fire, golf and summer holidays
"This is a firm commitment to local manufacturing, which will enable us to meet customer
demand over the long term," Fletcher announced today.
Taylor indicated the business planned to sell the land and release half the cost once the plant was built.
The project is due to be opened in 2023, create 100 new jobs and will see around 300 people working on the site at peak construction phase, Fletcher announced.
Tauranga mayor Tenby Powell has welcomed such a big investment, saying it would be great for the city and further confirmation of its reputation as a business and lifestyle destination.
On the NZICC, Taylor reiterated statements last week from Fletcher Construction chief executive Peter Reidy about repairs. Work could be back into full action by around the middle of this year, Taylor said.
"By May-ish, June-ish, we should be back into full swing," Taylor said of the $703m centre.
Reidy said last week work would continue for the next few months before major construction work could begin mid-year.
Taylor said: "To get it safe took a while. It's a very difficult site to get in when you have to deal with the debris and safety issues. We are now into the 'getting organised and understanding where to go' phase."
Asked how much the project could cost, he said Fletcher would not follow SkyCity Entertainment Group and release any hard numbers.
"SkyCity made some comments on their own balance sheet but it's premature to do that. We are not going to talk publicly about estimates of costs because a, it will cause issues with our insurers and b, we are not allowed to," Taylor said.
Asked if he could give confidence around provisioning and insurance costs, Taylor said he could.
SkyCity announced last week a $240m boost to its accounts from the fire, with insurers paying out. The half-year accounts included $225.8m from contract works insurance recovery, $10.3m from liquidated damages for Nelson St tunnel access and a further $4.5m in other insurance recoveries.
Taylor is New Zealand's highest paid chief executive, according to the Herald's pay survey which found he got $5.3m for the 2019 year, made up of a base salary of more than $2 million, a long-term incentive worth the same, a short-term incentive of just under $1.1m and other benefits worth $106,500.
On a third project, an analyst asked him about a motorway project north of Auckland, saying he had been "bombarded" with questions about concerns including cost increases and liquefaction problems.
Taylor said the Puhoi to Warkworth project had enjoyed the extremely dry conditions "and while that's not good for farmers, it's certainly helping us so we feel good about the project".
The $710m project will extend the four-lane Northern Motorway or State Highway 1 by 18.5km from the Johnstone's Hill tunnels to just north of Warkworth.
The Northern Express Group which won the contract is Fletcher Building, Accident Compensation Corporation, Public Infrastructure Partners managed by Morrison & Co and