A crisis meeting has been called between KiwiSaver provider Simplicity and Fletcher Building over impact GIB supply problems are having on its $35 million-worth of shares.
Last week, Simplicity's social housing arm sacked Fletcher Building as its plasterboard supplier for 550 homes due to slow delivery times, saying the company's hubris and lack of foresight had pushed some builders to the wall.
Simplicity owns $35 million of Fletcher Building shares on behalf of its members. The NZ Shareholders Association is joining the meeting as it has had ongoing concerns over the governance of Fletcher Building.
Simplicity's social housing arm, Simplicity Living, is now importing an approved plasterboard from Thailand. It has had 60 construction companies get in touch for advice on how to import plasterboard directly.
Fletcher Building says it will be another year before its new Tauranga factory comes online. It says it is working around the clock producing GIB, but nobody could see the scale of supply problems coming.
Watch the extended interview with Fletcher Building chief executive Ross Taylor
Fletcher Building chief executive Ross Taylor told Checkpoint that in 2019 they committed to building the GIB factory at Tauriko in Tauranga.
"At that stage back in 2019 consensus for about 30,000 houses per annum," he said.
"We had a capacity … to deliver for 50,000 houses. So we made a decision to invest $400 million in manufacturing in New Zealand quite some time ago."
But Covid and subsequent border closures caused delays of six to 12 months, Taylor said.
"What then also happened through the Covid period is what no one saw coming… once people couldn't travel they started investing in houses, alterations, additions, new houses, and the consents and demand for housing went from 30,000 to 50,000 quite quickly."
Taylor told Checkpoint he does accept his company's near-monopoly of the plasterboard market brings with it the responsibility to meet demand. He said GIB stockpiling is only a small part of the problem.
Elephant Plasterboard's managing director Kevin Van Hest told Checkpoint there's something inherently wrong with the system that has helped create Fletcher Building's monopoly on the market with GIB.
He said one big problem is when the word GIB is written on building plans because people think it's a generic term, not a brand name.
On top of that council has made it difficult to use any other type of plasterboard. His experience has also found a prejudice against a product that has not made in New Zealand.
"We've all put our eggs in one basket... the authorities, council compliance, the building code, they've made it really hard for there to be competition."
In response, Taylor said Fletcher Building's customer service, quality and range is very strong, and the company is "happy to compete on that basis".
He pointed out what makes GIB different in the local market is its BRANZ accreditation for a whole bracing system.
MBIE's General Manager Building System Performance John Sneyd told Checkpoint councils are willing to be part of the solution to the plasterboard shortage.
"There's no silver bullet to this but there is stuff that we are doing," he said.
"We know there are credible alternatives out there... That's one of the things we've asked [consenters] - thinking about the products that are available out there that they can use, using generic products where they don't need to have specialist performance, thinking about designing differently for fire protection and bracing."
