Fletcher Building claims leaky pipes in Aussie due to 'shoddy' installation, not manufacturing fault

Saturday, 14 October 2023

Fletcher Building chief executive Ross Taylor says he's 'very confident' about the quality of the company's Iplex plumbing pipes, blaming leaks in Western Australia on poor installation.

Fletcher Building chief executive Ross Taylor has come out fighting against Australian building firm BGC that blames it for leaky pipes in West Australian homes, saying the fault was due to “shoddy” installation work not manufacturing faults.

Fletcher Building estimates about 1500 of 15,000 houses constructed in Western Australia using its pro-fit polybutylene plumbing pipes had experienced leaks between mid-2017 and mid-2022, when its Iplex Australia unit stopped selling the product because it was unprofitable.

Australian homebuilder BGC was one of the largest users of pro-fit pipes in Western Australia and claimed this week that its investigations found manufacturing issues were responsible for the leaking pipes.

Taylor accused BGC of trying to shift blame for the fault and he spent an hour and a half on Friday afternoon rebutting BGC’s claims with the aid of a detailed 38-page presentation.

Fletcher Building’s shares have been halted from trading since midday Wednesday as it prepared a response to BGC’s claims that an Iplex manufacturing fault was to blame for the issue, which it estimated could cost A$1.8 billion (NZ$1.9b) to fix.

Taylor called BGC’s cost estimate “sensationalist”, rejected the need for a product recall as “madness”, and said the cost for the industry to repair affected houses in Perth would be more like A$50 million to A$100m.

He warned against assuming that cost would be borne by Fletcher Building if the product was sound and had been installed incorrectly.

Taylor provided details of testing that had been undertaken by multiple Australian laboratories and by international scientific experts which found no evidence of a manufacturing fault with its product, and found flaws with BGC’s claims.

From design right through to handover, this Fletcher Living house will be worked on by an all-female crew of tradies, consultants and managers.

He noted that there were no abnormal leak issues on its plumbing pipe installed elsewhere in Australia, only in Perth in Western Australia, which pointed to installation practices as the cause of the plumbing leaks.

In April, Fletcher Building set aside A$15m in a fund to help establish the cause of the leaks and appropriate fixes, and help Perth builders and plumbers complete repairs.

Taylor said BGC had refused to work with the group and “won’t talk to us”.

Over the past five months, Iplex had funded the repair of 383 homes, with its expert plumbing team inspecting 170 of the homes – it found 96% of the homes had at least one installation failure and 86% had multiple installation failures. The 4% of homes with other issues either had unrelated failures, such as rodent chew and fittings, or inaccessible pipes.

Taylor said the Iplex pipes had a 25-year warranty but poor installation shortened their life, and he said they were consistently seeing four types of poor installation practices in Perth that could generate leaks including over-bending, not allowing adequate pipe movement, poor lagging and damage caused during building.

The company had clear guidelines for how the pipes should be installed but it did not supervise their installation, he said.

Fletcher Building has met with the Western Australia building regulator, the Department of Mines, Industry Regulation and Safety (DMIRS), and they agreed to visit affected homes together and share data, Taylor said.

The process should evolve over the next couple of months, he said.