Shareholders' 'concerns' remain after Fletcher GIB crisis meeting

Source: 1News

Concerns remain about the supply of GIB in New Zealand, with investors saying Fletcher Building showed a lack of "humility" at a meeting in Auckland today.

New home, construction site.

The GIB shortage has caused major delays in the construction industry, with builders speaking of their inability to source product and major delays on projects.

Fletcher's Winstone Wallboards holds a 94% stranglehold on plasterboard supply in New Zealand.

The issues prompted Simplicity Living's Sam Stubbs and the Shareholders Association's Oliver Mander to call a please-explain meeting with Fletcher senior management including chief executive Ross Taylor.

Simplicty holds $35 million worth of Fletcher Building shares and recently cancelled all contracts to buy GIB for 550 affordable homes in Auckland.

After Friday's meeting, Mander told 1News there was a frank and open discussion over the issue.

While Fletcher offered some steps about the management of customer impact, there was no apology.

“We do retain some concerns about corporate governance aspects at Fletchers, in particular elements relating to risk and how the company assessed this particular risk and it’s impact on shareholders and customers," he said.

"And we didn’t see the humility we might have expected from a company that was in this situation."

While there had been a "perfect storm" with Covid disruptions and increased demand, he remained concerned the risk had not been identified by the company.

Stubbs said it was "clear" Fletcher wasn't the company to get NZ out of the crisis.

“It is time for the Government to step in and ensure we have a normal competitive market just like everywhere else in the world.

“They should be making a level competitive playing field which clearly we don’t have at the moment. You can’t have a company that has 95% market share in a really basic material like plasterboard."

Fletcher has said it will be opening a new factory near Tauranga in a year, and is working around the clock to produce more product.

Taylor previously said the company could not have seen the supply and demand issues in advance.

On Thursday, Winstone Wallboards said it would be able to supply merchant customers with one million square metres of extra plasterboard from July through to September.

"We understand the issues impacting the industry and, given our unique role as one of New Zealand’s remaining large-scale manufacturers, we have been, and will continue to do, everything possible across all our operations to alleviate the situation," Taylor said.

On Friday Taylor would not speak to 1News about the meeting, but talked about how it was increasing production and working with other offshore providers.

It has also asked merchants to have an allocation available for smaller businesses.

He would not say whether the company had let customers or investors down, but said on reflection, they should have thought harder about establishing an emergency pool of product.

"In retrospect we have had that in January."

"It's disappointing to leave customers short but we're really working hard."