FLETCHER BUILDING ANNOUNCES NEW STRUCTURE

By NZHJ June 21, 2018 Building Materials

Updated: Fletcher Building this morning revealed its new structure, including not only a simplified Distribution, new Australian, Concrete and Steel Divisions (see below) but also a new panel plant and wallboard factory.

This morning Fletcher Building CEO, Ross Taylor, confirmed the firm's new strategy and operating model and announced the new Executive Team, both of which can be seen in the new model shown above.

Key changes involve focusing on and growing share in the New Zealand and Australian markets and introducing a "simpler and leaner" operating model.

And, along with closing down the remaining elements of the Building + Interiors (B+I) business, the Formica and Roof Tile Group businesses are being divested.

The new operating model will be introduced on 1 July 2018 and, while there will be associated costs of $85-$95 million this FY, it is designed to reduce group-wide overheads by $30 million a year, along with further efficiencies in procurement and operations.

In Australia, as previously indicated, with a view to seeing a "significant improvement", all the businesses are being brought under a single banner, led by former Distribution boss, Dean Fradgley, while current PlaceMakers GM, Bruce McEwen, takes on the simplified Distribution division (the PlaceMakers and Mico businesses) as CEO.

By way of comparison with the new, simpler structure, see the current Distribution structure here and see the current Building Products structure here.

The new Concrete Division, which includes Golden Bay Cement, Winstone Aggregates and Firth, is to be led by CEO Ian Jones, GBC Winstone's current GM. 

And the newly created Steel Division, which includes all the Company’s New Zealand steel businesses, will have Fletcher Steel GM, Hamish Mcbeath, as CEO.

As you can just see above, under Steve Evans' Residential & Development Division is a new element, "Panelisation", which will involve a large-scale $15-20 million prefab panel factory whose products it will both consume itself and sell to others starting next year. 

The rest is pretty much status quo with David Thomas continuing as Interim CE of the Building Products portfolio which in FY19-21 will benefit from a new $130 million Winstone Wallboards greenfield plant to not only increase capacity, but also allow new products to be manufactured.

The complete strategy presentation is available here as a PDF. and a more readable version of the new structure can be found here.

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