Knauf's Australian, NZ plasterboard unit chiefs resign, NZ business under review

The Australian and New Zealand chiefs of Knauf's plasterboard operations have resigned and the New Zealand business is under review, having posted a loss in its first nine months of operations.

The head of the local plasterboard unit John Russ confirmed to BusinessDesk that he has resigned and will leave the company in two weeks. Meanwhile Mark Norris, managing director of Knauf Plasterboard in Australia, resigned with immediate effect yesterday, Russ said. Norris ceased to be a director of the New Zealand unit effective yesterday, according to a note to the Companies Office filed today.

Knauf is the world's second-largest plasterboard maker. Its Christchurch-based plasterboard unit posted a $2.4 million loss for the period from March 18 to Dec. 31, 2013, on sales of $938,000, according to financial statements filed to the Companies Office in October. Last month, it changed its balance date to December, meaning its current financial year will end next month.

The company's accounts show it accrued administrative expenses of $1.4 million for its truncated 2013 financial year, weighing on the annual loss. Knauf has struggled to gain traction in the New Zealand building market which is dominated by Fletcher Building, the country's largest listed company. It took Knauf longer than expected to gain approval for its products from BRANZ, before it could start to sell to consumers. Even then, the company said it faced resistance getting its products into stores which had established relationships with Fletcher and looked at establishing its own independent outlets.

"The NZ business is currently under consultation so I am unable to discuss anything until the conclusion of the process," Russ, Knauf's New Zealand sales manager, said in an email.

A lack of competition for building materials is among reasons cited in a 2012 Productivity Commission report that found it cost as much as 30 percent more to build a house in New Zealand than Australia. The Commerce Commission is currently probing Fletcher's plasterboard supply arrangements with building supplies merchants.

The government has been keen to clamp down on an estimated $3.3 billion annual spend on building materials over the next five to eight years in the state sector, as it deals with the fallout of the Canterbury rebuild and the ongoing leaky homes saga. Germany's Knauf, which has operations in more than 60 countries, won a share, along with Fletcher, of government contracts in the rebuilding of earthquake damaged Christchurch, worth some $40 million.

A local freight forwarder for Knauf, Auckland-based OceanAir, which imports Knauf's products, said it has an outstanding bill of about $150,000 owed by Knauf which is several months overdue. OceanAir director Russell Pope said he had made a formal statutory demand to Knauf for the outstanding money, the first time he has ever taken such action.

Knauf's Australian communications manager Crystal Dias didn't immediately respond to email and phone requests for comment.

(BusinessDesk)