“A perfect storm.”
That’s how NZ Herald property editor Anne Gibson describes the ongoing shortage of GIB plasterboard in New Zealand.
Since 2020, the GIB shortage has been a thorn in the side of the construction industry.
Orders have been delayed by months, houses have sat unfinished, construction companies have gone under.
Backlash has been swift: Simplicity Living – which is planning to build 10,000 homes over the next 10 years – has condemned the plasterboard production system in New Zealand, saying the overwhelming market share enjoyed by GIB’s producer, Winstone Wallboards (a subsidiary of Fletcher Building) is dysfunctional, and shouldn’t exist.
Last week the Government established a taskforce to look at the issue, complementing an ongoing Commerce Commission market study into the availability of residential building supplies.
Plasterboard is basically used to line ceilings and walls, but it has many functions – some types are fire-resistant, some are soundproof, some are moisture- and mould-resistant.
But Gibson says plasterboard is a crucial component in just about any modern construction project she can think of.
In New Zealand, 95 percent of all plasterboard used in construction is produced by one company: Winstone Wallboards.
Asked how the company’s attained this level of market dominance, Gibson says there are differing views.
“If you’re Winstone Wallboards … you might say GIB dominates the New Zealand market because it’s so good. It’s innovated, it’s changed, it’s got great service, great design, it’s got the properties we want, it performs the functions we need, it’s a great price, we can get it to you through Mitre 10 or Placemakers or Bunnings.
“If you’re a critic, like Sam Stubbs of Simplicity Living, he would say this is a masterclass in corporate lobbying.
“His criticism is that GIB is actually specified in a lot of territorial authorities’ building consent application documents.
“If you’re going to use a product that’s been imported from Thailand, you’ve got to cross out the word ‘GIB’ and put the Thai plasterboard name.
“What that triggers is a minor variation to the application. In these big building jobs, which are very complex … when there are variations to the contract, it potentially costs more money and takes more time.”
Gibson says the storm clouds for GIB started gathering at the end of 2019.
Winstone Wallboards had shut down its two factories for maintenance over Christmas, meaning they weren’t producing any GIB.
When the pandemic and Level 4 lockdown hit, they weren’t considered essential, so stockpiles began to dwindle.
At the same time, there was a construction boom, and more people wanted to renovate their homes.
The end result was much less supply, much more demand, and a market unaccustomed to substitute products.
Gibson says the reliance on GIB is, to a point, understandable: it’s a known quantity and produced locally by a company that employs many people. Retaining control in New Zealand also reduces the chance of a repeat of the leaky homes situation.
But a series of unfortunate events – including a stockpiling scandal with Fletcher Living at the centre of it – has strengthened calls for a diversification of the plasterboard market.
Gibson says the taskforce looking into the GIB crisis hasn’t yet established its terms of reference, but given its members include Tex Edwards, the founder of 2Degrees and MonopolyWatch, there could be discussions about the possibility of Fletcher Building being broken up.
“What we’ve got is what they call in business a ‘vertically-integrated model’.
“A subsidiary of Fletcher Building makes GIB board, and they sell it through their PlaceMakers national outlets.
“Having that control of the market is what concerns people like Tex Edwards.”
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