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Fletcher Building snaps up roofing firm, may enter joint venture

The Invercargill Velodrome was one of CS Roofings' showcase projects.

Fletcher Building has bought a New Zealand roofing material manufacturer and may also be eyeing a joint venture in Australia.

Roll-forming company Calder Stewart Roofing, which includes roofers network Roofingsmiths, is to be rolled into Fletcher's Dimond business.

Dimond makes long-run roofing, flooring, cladding and rainwater systems, while CS Roofing's product line includes roofing, architectural cladding and solar products.

Fletcher Building Steel Distribution general manager Hamish McBeath said the purchase would fill some gaps in its national network. 

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"We recognise the great work that has been done by the team at CS Roofing in bringing new products and systems in to the market and this gives us the opportunity to maximise the benefits of these products through a larger network."  

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Meanwhile, Australian media have suggested that a joint venture between Fletcher's Iplex plastics pipes business and rival Vinidex may be on the cards: 

The report came from The Australian and in a research note, brokerage Forsyth Barr noted that Iplex was the principal motivation behind Fletcher's purchase of Australian plumbing supplies and pipes maker Crane for $1.3 billion in 2011.

"In our view, the Australian plastic pipes industry is inherently challenged as a commodity market with considerable overcapacity, low barriers to entry and a committed, well-capitalised and ambitious recent entrant." 

Following two years of losses, Forsyth Barr expected Iplex Australia to broadly break even in pre-tax earnings in 2017.

Fletcher has not confirmed or denied a JV, telling Fairfax only that it was an active portfolio manager and that "invariably leads to speculation about potential joint ventures, acquisitions and divestments".

"The company is aware of its continuous disclosure obligations, and will promptly communicate to the market if or when there are substantive matters required to be disclosed."

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