Building projects grind to a halt as dominant Fletcher freezes Gib orders

In a recent post, Jonathan Milne of Newsroom (Feb 11 2022), highlighted the shortage of building materials.

Some Hamilton builders have been hit hard by the shortages and don’t expect things to become easier any time soon. At present Fletchers are not taking any new orders until July or August 2022.

And its not just the plasterboard. Hamilton plasterers NLP experienced supply issue with plaster as well as GIB earlier this year. While this has been resolved now, at the time they were limited to purchasing only enough plaster for one home at a time.

Milne commented on the way that Fletcher-owned Winstone Wallboards are rationing supply and limiting orders.

Despite a Commerce Commission probe into whether competitors are blocked from the plasterboard market, the giant construction supplier is to take the extraordinary step of rationing the critical building product.

Deon Swiggs is building five executive townhouses in Kaiapoi, and says the project was already stalled by four-month delays to Gib supplies.

He needs 30 tonnes. Now he doesn’t know when the $150,000 order of plasterboard will arrive onsite, with the announcement this week that Fletcher-owned Winstone Wallboards is putting a freeze on advance orders until July.

The former Christchurch councillor can’t even complete his elderly mother’s home: “I won’t be able to get my mum into her house I am building for her on my farm before winter, now,” he says. “That is very annoying and disappointing.

“I would have been looking to buy Gib early next month for that build, but that throws a spanner in the works as I doubt anyone will be selling off the shelf now.”

Commerce Minister David Clark has already questioned Fletcher’s control of at least 94 per cent of the plasterboard market – now builders, developers and Gib’s last remaining competitor say yesterday’s customer announcement highlights the severity of the crisis.

Big suppliers like Carters and Placemakers have warned major construction companies that the delays are getting worse, not better, and will be especially tough to manage in smaller projects.

Customers had been told last month that the company wouldn’t deliver on any new orders before the end of May; now Winstone has announced it won’t take advance orders at all.

RNZ have also highlighted this issue, noting that the rising cost of construction materials shows no signs of slowing, as widespread shortages of key products continue to plague the industry.

Tradespeople and building suppliers have told RNZ they are struggling to get their hands on basic materials such as exterior and interior cladding, which is causing long delays that are doubling some build times.

Combined Building Supplies Co-Coperative chairperson Carl Taylor said the delays were the result of increased demand as residential building consents hit record highs, a scarcity of labour needed to make the materials and a shortage of the materials needed to make specific building products.

Taylor singled out GIB plaster board, saying its lead time was now hitting May or June.

“If we can’t get the materials we can’t work, plain and simple,” he said.

Fletcher Building’s products division confirmed GIB plaster board was in hot demand and it was keeping customers informed about any timeframe changes to assist them getting the products they need.

This crisis has highlighted New Zealand’s vulnerability with supply chain issues. Another well-known example at present is the global supply issues of Ad Blue, a diesel additive that reduces emissions. New Zealand manufacturers Ad Blue locally and is usually impervious to such supply issues. However, even leading truck service and parts providers have announced that they have limited supply of the additive.

Further exacerbating the issue is a nationwide shortage of trade staff. Auckland electricians have reports severe difficulty attracting staff, even after offering significant incentives to join their team.

Building and Construction Minister Poto Williams acknowledges that Covid-19 and increased global demand have affected international supply chains.

“MBIE is updating its existing guidance on building product substitution to help educate the sector where there are supply chain issues.”

There is no quick fix, she told Newsroom, but government initiatives include an inter-agency forum to plan better to meet the industry’s needs, and coordination through the Infrastructure Commission project pipeline.