Fletcher Building sets aside $16m for leaky pipes problem in Australia

Monday, 17 April 2023

Fletcher Building chief executive Ross Taylor acknowledged the frustration and inconvenience impacted homeowners and their families are facing. (File photo)

Fletcher Building is setting aside A$15 million (NZ$16m) to cover damage from leaky pipes in Australian homes.

In a statement to the NZX, the company said about 1200 of 15,000 houses constructed in Western Australia using its pro-fit pipes had experienced leaks between mid-2017 and mid-2022, when its Iplex Australia unit stopped selling the product.

“Iplex Australia had received a number of product quality complaints relating to a hot and cold water polybutylene pipe product it previously manufactured under the name ‘pro-fit’,” the company said.

“The complaints relate to leaks in homes, primarily built by group home builders in Western Australia, which have required repair or replacement of the pipes and, in some cases, damage to the affected homes.”

* Bad building, not James Hardie's Harditex caused leak, High Court finds

* Leaky house owners sue James Hardie because no other 'deep pockets': defence

The pro-fit product was also sold in other Australian states, where the leak rate was reported to be not materially unusual for a product of this type, the company said.

Experts say we're still behind Europe on sustainable building materials, but one Canterbury builder is walking the talk. Video first published October 19 2022.

The Western Australia building regulator, the Department of Mines, Industry Regulation and Safety was investigating and had advised Iplex Australia that, while its tests were not yet complete, it expected to find the leaks were due to a manufacturing defect, the company said.

Fletcher Building said Iplex Australia was undertaking its own investigation into the root cause.

“At this time, the work that has been completed does not identify a manufacturing defect,” the company said.

Still, Fletcher Building warned it may have to replace pipes in the affected homes.

“We acknowledge the frustration and inconvenience impacted homeowners and their families are facing,” said Fletcher Building chief executive Ross Taylor. “We are working hard with builders to arrive at an acceptable outcome for affected homeowners.”

Fletcher Building said the pro-fit product was only sold in Australia and the resin was not used by Iplex New Zealand or any other Fletcher Building company for any other product.

A Western Australia group home builder was also conducting its own tests into the issue, it said.

Iplex Australia has proposed interim arrangements with two large group homebuilders in Perth who together constructed about 90% of the affected homes.

It involved the builders replacing ceiling product in homes that had leaked and repair damage as well as provide data to allow Iplex Australia and other stakeholders to develop a plan for a longer term solution.

Iplex Australia is also setting aside A$2m to reimburse costs for other Western Australian plumbers and builders who constructed affected homes.

The moves meant Iplex Australia would increase its provision for the issue to A$15m from A$2m.

Shares in Fletcher Building slipped 0.7% to $4.60 in midday trading on the NZX on Monday.