Social housing developer resorts to importing GIB alternative from Thailand due to supply shortages

A social housing developer has fired Fletcher Building as its supplier of GIB plasterboard due to lengthy product delays.

Simplicity Living, which is owned by the not-for-profit KiwiSaver provider Simplicity, said the ongoing issue had it forced to resort to importing an alternative product from Thailand to complete its build-to-rent developments.

Fletcher Building has a near monopoly on the plasterboard market and the chronic shortages, which have been blamed on unprecedented demand, have been well-publicised.

Some in the building sector have warned that the ongoing shortages could result in builders going broke because they could not finish residential projects.

Simplicity chief executive Sam Stubbs told RNZ there was cost of building crisis in New Zealand, but Fletcher Building's hubris has made the situation worse.

He said Fletchers have known for at least 12 to 18 months that there was going to be a supply squeeze, based on residential building consents.

"They've really done very little to actually manage what was clearly going to be a slow train-wreck.

"They had the ability, we think, to actually either make more product or bring in more product to satisfy demand.

"Instead, what they have done, is they have actually left a whole lot of smaller developers and builders hanging out to dry with total uncertainty about delivery times."

Simplicity Living managing director Shane Brealey.
Simplicity Living managing director Shane Brealey. Photo credit: RNZ/Simplicity Living

Fletcher Building's chief executive of its products division, Hamish McBeath, said it is a free market.

"We ... fully support any initiatives undertaken by other businesses to supply plasterboard to the industry to assist in meeting the high levels of demand New Zealand is currently experiencing."

He said since other competitors have left the market it has been left to pick up the shortfall at a time of high demand.

McBeath said its manufacturing plants are running around the clock, despatching enough plasterboard to supply 1000 new, average sized homes a week and it is also working Australian supplier to supplement demand.

The company is also planning to open a new factory near Tauranga in June 2023.

Social housing developer resorts to importing GIB alternative from Thailand due to supply shortages
Photo credit: RNZ/Simplicity Living

New products expected to be cheaper, quicker to arrive

Sam Stubbs said Simplicity Living is responding to the crisis by importing an alternative to GIB's plasterboard and aqualine products that were 20 percent and 40 percent cheaper.

The alternative product will comply with New Zealand's building code and it is already used in the United States and the Pacific, he said.

"We get GIB equivalent product in New Zealand in eight weeks from South Asia, but it takes 8 months from South Auckland.

"In an ideal world we would buy 100 percent sourced New Zealand product."

The first container has just landed from Thailand and the company has made forward orders for four containers a month for the next three years.

Simplicity Living intends to make its contacts available to anyone who wants to import the plasterboard directly.

The Commerce Commission is currently investigating the building supplies industry.