Sharechat Logo

Govt splits Christchurch rebuild wallboard needs between local and German supplier

Wednesday 23rd January 2013

Text too small?

A $40 million government procurement deal to supply wallboard for the Christchurch rebuild is being used as a way to inject competition into New Zealand's high-cost home building market.

With home affordability a hot political issue, and lack of competition for building supplies identified as a key issue by a Productivity Commission report, the government has announced it will split the wallboard contract between New Zealand's only wallboard manufacturer, Winstone Wallboards, and multi-national German manufacturer Knauf.

Winstone is owned by Fletcher Building, whose shares had risen 0.65 percent to $9.35 at 4.30pm.

The announcement from Economic Development Minister Steven Joyce emphasised the deal would save the government around 6 percent on wallboard costs and should spark wider competition.

"Having Knauf set up shop in New Zealand will see increased industry competition that will provide consumers with more choice and could potentially drive down prices," said Joyce. "If Knauf is successful in penetrating the market, the savings could even be higher."

Knauf, the world's second largest wallboard manufacturer and one of only seven firms that dominate four-fifths of total global production, already has a New Zealand operation, selling wool-based insulation material.

The contracts will cover plasterboard and associated fasteners, adhesives, and jointing compounds being used in the Earthquake Commission and Southern Response Earthquake Services Limited reconstruction programmes.

The contracts were let after a competitive tender that attracted nine bids.

 

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Rio Tinto decision following strategic review of Tiwai
Contact says smelter closure is ‘disappointing’
South Port (SPN) Statement on NZAS Tiwai Point Aluminium Smelter Closure
Rio Tinto announcement on Tiwai Aluminium Smelter
Me Today announces equity raising to accelerate growth
Scott Technology Trading Update; Rising to the COVID Challenge
New non-binding indicative offer received from apvg, shareholder meeting deferred
U.S. Added 4.8 Million Jobs in June as Reopened Businesses Rehired
Auditors have a duty to be alert to fraud
Strong sales recovery but uncertainty remains over economic outlook and potential second wave of COVID-19

IRG See IRG research reports