Shareholders 'disappointed' with Fletcher Building after Gib crisis meeting

Friday, 17 June 2022

Fletcher Building has apologised after a Canterbury builder captured video evidence of Gib stockpiling at a Fletcher Living construction site in Lincoln.

Shareholders of Fletcher Building were left “disappointed” after a meeting on Friday in which the company was asked to explain how a national Gib shortage had occurred.

Simplicity Living managing director Shane Brealey said there was a lack of accountability shown by of Fletcher Building executives during the meeting.

“They gave reasons for the Gib shortage such as Covid-19 and blaming merchants. But Covid-19 affected everyone, and we don’t see a shortage of concrete and steel production,” Brealey said.

Brealey said he was “disappointed in the meeting” and the lack of clear explanation from Fletcher Building for how the Gib shortage occurred. Simplicity Living is in build to rent partnership with KiwiSaver provider Simplicity, which owns 0.8% of Fletcher Building worth $35 million.

NZ Shareholders Association chief executive Oliver Mander said the results of the meeting were “mixed”.

“It was a frank and open discussion, which was positive. But there was still a lot to discuss,” Mander said.

The association, whose members own 0.4% of the company, raised concerns the Gib shortage was creating long term reputational damage to Fletcher Building, he said.

But reputational risk was quickly turning into political risk, and shareholders were concerned, he said.

Mander said ownership of Fletcher Building shares among the association’s members had been declining in recent years, but concerns remained around the direction of the company.

Shareholders of Fletcher Building were left “disappointed” after a meeting on Friday in which the company was asked to explain how it had allowed the national Gib shortage to occur.

The association and Simplicity would take the weekend to consider their next steps in their approach to Fletcher Building and would provide an update early next week, he said

Earlier this week, Simplicity Living cancelled all contracts for Gib with Winstone Wallboards and instead imported a similar plasterboard from Thailand.

Brealey said the company wanted to buy New Zealand made products when it could, but the behaviour of Fletcher Building had made that impossible.

“You can’t fly like an eagle when you are surrounded by turkeys,” Brealey said.

Last month, Fletcher Building asked builders throughout Aotearoa not to order Gib plasterboard until their site was ready for it to be installed, to ensure orders could be fulfilled where needed amid the national building materials shortage.

“It’s just crazy that we have to import a product as basic as plasterboard to build desperately needed homes on time,” Brealey said.

“How is it that we have concrete, framing, doors, windows, roofing, hardware and everything else required. But we have a problem with the simplest of products, Gib board?”

On Thursday, Winstone Wallboards announced it would ramp up the production of Gib plasterboard by 7% to 8% between July and September.

But Brealey said the increase was a “drop in the bucket” compared to what the building industry needed.