Fletcher Building's national retailer PlaceMakers has warned customers of a 10 per cent price rise for all James Hardie products imported across the Tasman.
In the latest round of price rises to hit the sector, merchants wrote to customers late last month saying the latest price increases would be imposed by Australian-headquartered James Hardie Industries.
PlaceMakers cited the cost of getting the goods here.
"Like many suppliers, they are currently experiencing significantly higher freight prices and it is not sustainable for them to continue to bring in product from Australia without recovering these costs.
"They are therefore adding an additional 10 per cent onto all James Hardie product by way of a freight surcharge for orders placed from December 1," PlaceMakers' letter said.
James Hardie products sold by PlaceMakers include Stria cladding, weatherboards, fibre cement facade panels, galvanised nails and blades, fastenings and hardware.
PlaceMakers employs more than 2100 people at 62 stores where it sells 74,000 products and serves more than 300,000 customers a year.
But PlaceMakers said it would absorb the sudden price rise in the short term in a sign of goodwill towards its customers.
"We understand the impact this late notification of a price increase will have on our customers and as such PlaceMakers will hold our current prices until February 1, at which stage the additional 10 per cent freight surcharge will be added to our pricing," the chain wrote.
Timber is just one component to rise in price. Photo / Hawkes Bay Today
The Australian manufacturer is extremely stretched by high building rates on both sides of the Tasman.
"From a supply point of view, James Hardie is at capacity and many products are on allocation to us, meaning we are already purchasing all we can of these products," PlaceMakers wrote.
"Therefore it is unlikely that despite our best efforts we will be able to purchase any additional product prior to the December 1 increase. As you are probably aware James Hardie lead times are extending and it is challenging to get accurate estimated time of arrival information, so supply is constrained despite James Hardie distributing more than ever before," PlaceMakers said.
Four months ago, the biggest leaky homes lawsuit in New Zealand was settled out of court and James Hardie expressed satisfaction. Aggrieved homeowners at one point reportedly sought $220 million but the Australian target instead received a payout.
James Hardie was sued over its Harditex monolithic cladding. It said as part of the settlement, it would get $1.25m from Harbour Litigation Funding.
Residential and commercial construction - hit by rising prices. Photo / Hawkes Bay Today
In August, PlaceMakers warned of price rises of up to 15 per cent. A PlaceMakers manager said then price increases looked set to continue due to suppliers charging more and trouble actually even getting the stock continued.
By October, fastenings including collated nails and brads would rise in price 8 to 10 per cent, plywood prices would go up 15 per cent, timber decking 10 per cent, polythene 8 per cent, strandfloor 10 per cent and Gorilla adhesives, sealants and foams 8 per cent, PlaceMakers said.
PlaceMakers employs more than 2100 people at 62 stores, where it sells 74,000 products and serves more than 300,000 customers a year, but the manager said the year had already seen price increases from many suppliers "and sadly they're going to continue. The freight and raw material costs are still the main reason, driven by increased demand, both in New Zealand and overseas, and this demand is also continuing to create supply challenges."
James Hardie Industries is today trading on the ASX at A$55.43, up from A$21 in 2017. It has a market capitalisation of A$24.6b and its New Zealand website says it's the world's number one producer and marketer of high-performance fibre cement and fibre gypsum building materials.
It employs 4800 in North America, Europe and Australasia and the Philippines and generated more than $2.6b net sales last year. The New Zealand office was established in Penrose in 1937.
Price rises from this business are just the latest.
Yesterday, the Herald reported on the EBOSS survey of 219 New Zealand suppliers. That forecast 28 per cent price rises: 16 per cent in the last three months and a further 12 per cent in the next six months.
On Tuesday, it was reported that major building product supplier Carters has written to customers advising that within the next three months, they'll have to pay more for many items.
One manufacturers' silicone sealant product price will rise 27.5 per cent from February 1, Carters said.
The letter from Carters national support office on Harris Rd, East Tamaki, named many products and the exact price increases planned.
Timber, fastening systems, polycarbonate roofing, building wraps, underlay, laminated goods and door hardware products are all listed by the national supplier as products that will soon cost more.
"As a supply partner in your business, we wish to give you prior notification of upcoming market-wide price movements affecting various suppliers," Carters wrote.