Fletcher Building shareholders were “disappointed” after a meeting on Friday in which the company was asked to explain how a nationwide Gib shortage had come about.
Simplicity Living chief executive Shane Brealey said there was a lack of accountability from Fletcher Building executives at the meeting.
“They gave reasons for the Gib shortage like Covid-19 and blamed traders. But Covid-19 has affected everyone, and we don’t see a shortage of concrete and steel production,” Brealey said.
Brealey said he was “disappointed with the meeting” and the lack of a clear explanation from Fletcher Building as to how Gib’s shortage occurred. Simplicity Living is in a build-to-let partnership with KiwiSaver provider Simplicity, which owns 0.8% of the $35 million Fletcher Building.
NZ Shareholders Association chief executive Oliver Mander said the outcome of the meeting was “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 business, raised concerns that the Gib shortage was damaging Fletcher Building’s long-term reputation, he said.
But reputational risk was quickly turning into political risk and shareholders were worried, he said.
Mander said ownership of Fletcher Building shares among association members had declined in recent years, but concerns remained about the direction of the company.
The association and Simplicity would take the weekend to review their next steps in their approach to Fletcher Building and provide an update early next week, he said.
Earlier this week, Simplicity Living canceled all of Gib’s contracts with Winstone Wallboards and instead imported similar plasterboard from Thailand.
Brealey said the company wanted to buy New Zealand-made products when it could, but Fletcher Building’s behavior made that impossible.
“You can’t fly like an eagle when you’re surrounded by turkeys,” Brealey said.
Last month, Fletcher Building asked builders in Aotearoa not to order Gib plasterboard until their site was ready for installation, to ensure orders could be fulfilled when needed. amid the national shortage of building materials.
“It’s just crazy that we have to import such a basic product as plasterboard to build homes that we desperately need in time,” Brealey said.
“How come we have concrete, framing, doors, windows, roofing, hardware and everything else needed. But we have a problem with the simplest product, Gib board?
On Thursday, Winstone Wallboards said it would increase Gib plasterboard production by 7-8% between July and September.
But Brealey said the increase was a “drop in the bucket” compared to what the construction industry needed.