Fletcher Building has announced the sale of its Australian plumbing supplies business, Tradelink, for A$170 million, as part of a strategic refocus. Concurrently, the plumbing and bathroom product market in New Zealand is seeing expansion, with Reece opening its first Northland showroom in Whangārei and Chesters Plumbing & Bathroom Centre re-entering the South Island market in Dunedin.
Fletcher Building Divests Australian Plumbing Arm
Fletcher Building has finalised the sale of its Australian plumbing supplies and distribution business, Tradelink, to Metal Manufactures for A$170 million (NZ$186.3m). This divestment follows a strategic review that determined Tradelink did not align with Fletcher Building’s long-term objectives. The sale is expected to allow Fletcher Building to concentrate on its core businesses and reduce debt.
Key details of the sale include:
- Sale Price: A$170 million (NZ$186.3m).
- Buyer: Metal Manufactures, an Australian trade distribution business.
- Payment Structure: A$160 million cash on settlement (September 30), with a deferred A$10 million contingent on meeting separation milestones over two years.
- Financial Impact: Fletcher Building anticipates a non-cash impairment of approximately A$32.5 million and a NZ$54 million non-cash loss in translated foreign currency reserves in its FY24 financial report.
New Showroom Opens in Whangārei
Reece NZ, a prominent plumbing and bathroom product supplier, has opened its inaugural Northland showroom and plumbing branch in Whangārei. This expansion aims to better serve the rapidly growing region, which is experiencing increased investment in infrastructure and building activity.
- Location: Gumdigger Place, Whangārei.
- Strategic Importance: Whangārei is identified as a key hub for Northland, making it an ideal location for Reece’s expansion, reducing the need for local plumbers to travel to the previously closest branch in Warkworth (100km away).
- Local Leadership: The Whangārei branch is managed by Ben Rawlings, a Dargaville native returning to Northland after 11 years with Reece.
- Services: The new outlet offers a trade counter and a dedicated bathroom showroom with expert design advice and access to Reece’s product range.
Chesters Plumbing Expands to Dunedin
Chesters Plumbing & Bathroom Centre, a large Auckland-based wholesaler, is re-establishing its presence in the South Island with a new branch in Dunedin. This marks the company’s second venture into the South Island market, following a previous joint venture.
- Location: Orari Street, Dunedin.
- Opening: Expected by the end of October.
- Staffing: The Dunedin branch will initially employ five staff, with plans for growth.
- Market Opportunity: The decision to open in Dunedin is driven by the city’s significant commercial development, including the new hospital project.
- Accessibility: The branch will serve plumbers, gas-fitters, drain layers, and homeowners.
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