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Gross Revenue $764m 2017 $745m ▲ 3% EBIT $132m 2017 $152m ▼ 13%
Building Products 1,400+ 7
EBIT % 17% 2017 20% ▼ 3ppts
and modest volume growth and market share increases for Iplex New Zealand. Demand was consistent across all sectors of the market, however, regional performance was mixed as the rate of growth in Auckland slowed and demand in Christchurch continued to rebase following higher activity levels during the earthquake rebuild period. While revenues increased, operating earnings before significant items decreased 13% to $132 million due to the highly competitive market, increasing input costs, one-off costs due to natural events, provisions for obsolete stock and historical claims and the need for businesses to invest in their supply chains ahead of planned timelines to meet higher than expected demand. Energy and raw material cost increases were experienced most acutely in Iplex New Zealand and Winstone Wallboards, while supply chain investments included a new Winstone Wallboards freight initiative to relieve capacity constraints. During the year a number of businesses also experienced one-off costs including $2 million of repairs and raw material delay at the Winstone Wallboards manufacturing facility and $3 million following a fire at the Humes Penrose site. The division spent $19 million of capital expenditure during the year, continuing to invest in its key operations to improve performance and realise cost-efficiencies. This included new extruder and pipe coilers, along with digital enhancements, at Iplex New Zealand; deployment of a new Enterprise Resource Planning (ERP) system at Humes; new plant robotics at Winstone Wallboards; a new packaging plant for Tasman Insulation; and the relocation of a treater at Laminex New Zealand’s Hamilton factory. The division also continued its focus on customer satisfaction and innovation. Customer satisfaction improved in the
majority of Building Products business during the year. Several new products were launched, including Winstone Wallboards’ new GIB® Barrierline® intertenancy wallboard solution, which is cost effective, lightweight, robust and fast to install with high noise control and fire performance, and Laminex New Zealand’s roll out of new and refreshed product ranges, such as Melteca Acrylic soft touch panels and additional colours in the melamine portfolio. The New Zealand Government’s revisions of the Residential Tenancy Act 1986 on retrofit insulation also continued to stimulate demand for Tasman Insulation’s products and its network of insulation installers. FUTURE FOCUS The division remains focussed on delivering customer-leading products and solutions, increasing customer engagement and improving cost efficiency, operational excellence and resilience in the supply chain to support increasing market demand. A significant capital investment project is planned for Winstone Wallboards, with a new state-of-the-art manufacturing facility to be built to meet future capacity requirements and improve efficiencies by bringing manufacturing and four distribution sites together into one Auckland location. Operating efficiencies will also be pursued in Humes, including relocating manufacturing to meet demand in high-growth regions and improving supply chain efficiencies.
The Building Products division brings together Fletcher Building’s manufacturing businesses, which supply into the building and construction
sector in New Zealand. • Winstone Wallboards is New Zealand’s largest
DIVISIONAL PERFORMANCE OVERVIEW The Building Products division reported gross revenue of $764 million, an increase of 3% from FY17, as the majority of businesses achieved price increases and benefited from elevated demand. This was led by Winstone Wallboards, which experienced a volume increase of 2% in its value added plasterboard, manufacturer and distributor of plasterboard and drywall systems under the well-known GIB® brand. • Laminex New Zealand is a manufacturer and distributor of particle board and laminate surfaces. • Tasman Insulation manufactures and distributes the renowned Pink® Batts® brand. • Humes manufactures and distributes concrete pipes and other drainage products and solutions. • Iplex New Zealand is the largest manufacturer of plastic pipes in the country, offering a broad range of products and solutions. • CSP Pacific supplies metal lamp posts and barrier solutions. • Altus is a joint venture that develops and manufactures premium aluminium extrusions for an extensive range of industries.
During FY18 Winstone Wallboards was the recipient of ‘The Global Gypsum Company of the Year 2017’ award from the 17th Global Gypsum conference.
22 Fletcher Building Limited Annual Report 2018
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