Wood products is an attractive sector in which Fletcher Building is currently underrepresented. As previously announced at its Investor Day in June 2022, Fletcher Building will proceed with building a new wood panels plant at its current Laminex site in Taupo with a capital cost of approximately NZ$275 million.
The investment involves building a new wood panel production and processing line. The new process will supersede the current particleboard production line by producing cost competitive and superior products that have diverse applications in furniture, joinery, and the broader construction sector. All appropriate consents for this project have been granted and initial civil works will commence in early 2023. The project is expected to take around 2.5 years to complete, with FY26 expected to be the first year of operations.
In addition, Fletcher Building has agreed to acquire Waipapa Pine Limited and Renewable Wood Fuels Limited for a consideration of approximately NZ$97 million. Waipapa produces a range of sawn timber products, including industrial and structural grades, and includes a renewable fuels business.
It is geographically advantaged by being in Kerikeri (sawmill) and Whangarei (timber treatment plant), close to the supply of high-quality logs and servicing its highly valued customers from the Far North to Hamilton. It is anticipated that the acquisition, which is conditional on Overseas Investment Office approval, will be completed in the final quarter of FY23.
Fletcher Building’s Chief Executive Ross Taylor said: “Together, these investments represent our first major expansion steps in the wood products sector and nicely complement our already strong positions in Steel and Concrete.