Case studies

Fletcher Building's Roof Tile Group has established its brands in sub-Saharan Africa over the last ten years, as emerging middle classes and fast growing commercial sectors have fuelled building activity.

The quality of Decra^® and Gerard^® roofing products has been promoted, and the brands have been positioned for the long term with the development of strong distribution channels and community relationships.

That decade of investment gave the Roof Tile Group a strong foundation from which to respond when economic growth slowed as African economies were hit by the global financial crisis.

The Roof Tile Group responded to shaky markets with competitively packaged offers enabling property developers to progress approved projects and win new business. It encouraged developers and home owners alike to see investment in quality branded roofing products as a way of adding value to their buildings, increasing the overall saleability of properties at a time of increased business risk.

The strategy paid off. Sales of Roof Tile Group's brands in its African markets increased by more than 40 percent over the year.

While economic growth in sub-Saharan economies slowed during the global financial crisis from around five percent per annum to just two percent, growth of six to seven percent is predicted for the next two years. The Roof Tile Group is ready for growth, established as a respected company that delivers for its customers whatever the economic weather.

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DIY is an important complementary market to PlaceMaker's core building trade business.

In recognition of this, PlaceMakers launched its Know How loyalty card in 2005, which offered DIY customers bonus vouchers to encourage repeat store visits. The card, and 'Know How, Can Do' advertising, has helped position PlaceMakers as a household brand.

PlaceMakers' commitment to DIYers has paid off. While trade sales softened over 2008 and 2009, sales to Know How Card members remained at similar levels to previous years. But PlaceMakers is not taking its DIY customers for granted. Competition for the DIY dollar is strong, and customers need to be engaged online as well as in-store.

A review of the Know How Card loyalty programme has seen it relaunched with added features and benefits. Members now have options such as bonus vouchers being delivered by email. Higher value customers are being recognised through the addition of two premium tiers to the programme, DIY PLUS and DIY PRO. These customers receive exclusive offers and invitations to branch events designed specifically for them. Competitive advantage for PlaceMakers over other DIY retailers is supported with a platform of tools for powerful and effective direct marketing.

The Know How Card relaunch is a 'can do' response to securing an important market at a challenging time.

When private sector construction around the world dried up with the global financial crisis, new opportunities emerged as governments increased investment in infrastructure to provide economic stimulus.

In New Zealand, Fletcher Construction's reputation has helped the company secure involvement in many of the country's recent infrastructure developments. Through a range of different contractual models, Fletcher is involved in construction of the Manukau Harbour crossing, Auckland's Victoria Park tunnel, the McKay's Crossing to Peka Peka expressway north of Wellington, the redevelopment of Eden Park for the Rugby World Cup, and new facilities at Mt Eden prison.

The scale and significance of such investment is increasingly encouraging contractor-selection based on non-price attributes. While many companies compete for these contracts, Fletcher Construction's bids are backed with a strong balance sheet and a record of delivery of some of the country's largest and most complex structures, on time and on budget. Government and delivery partners are also attracted by the company's stable experienced management, its investment in areas such as health and safety, and its 'pride of place' culture anchored in 100 years of tradition. These attributes build confidence that the billions of dollars of public money being invested are in safe hands.

Laminex entered the financial year planning to grow profit exponentially after three external shocks had wiped over $55 million off the bottom line in the previous year.

Disruption to the company's energy supplies from the Varanus Island fire was a one-off event, but the global financial crisis, and sharp increases in commodity prices required a fundamental rethink of the business. Laminex's business revitalisation programme, Reset, was created to position Laminex to make money even if the reduction in market demand lasted for years, while maintaining the company's capacity to respond quickly when markets recovered.

Reset enabled important strategic and operational choices to be made. A decision was made to focus on valuable, strategically important domestic markets rather than low margin export markets. Customer profitability reviews saw Laminex take some simple steps to increase profitability, such as simplifying deliveries. Laminex reduced the number of transport companies it used, and achieved more competitive pricing from the remaining suppliers. A similar approach to input commodity suppliers saw reductions in costs, such as paper and resin.

The impact was substantial. Margin optimisation activities alone delivered around $10 million to the bottom line, and procurement initiatives saw the cost of raw materials reduce $22 million. In total, Reset initiatives delivered a $44 million benefit.

Commercial and residential building activity in North America is at its lowest level in decades but Formica is achieving results through outstanding design, use of new printing technology and smart marketing. Its new collection of laminates, marketed under the 180fx^TM brand name, is created for a residential market looking for quality products that won't break the bank.

180fx^TM replicates the look and scale of exotic natural granite slabs. Unlike conventional laminates, the 180fx patterns don't continually repeat across the width of a 5-foot (1.524m) sheet. Each sheet displays the rich colour variations and veining that would be found in a similar sheet of real granite. That means home builders and renovators can enjoy the practical advantages of a laminate product while getting the luxury look of stone at a fraction of the price.

While 180fx^TM costs much less than granite, the quality and range of designs and finishes still allows Formica to sell the product at a premium price relative to other laminates. The use of Formica's premiumfx^TM finishes on the 180fx^TM product further supports a premium price positioning.

180fx^TM has been the right response to the market, at the right time, delivering 'affordable luxury on a luxurious scale'. Sales and revenue in North America are five times higher than predicted.

Stramit Building Products' sales staff are adding value for customers without compromising profitability.

Stramit manufactures roll-formed steel building products and delivers these across Australia from its network of manufacturing and distribution centres. In the past, the Stramit sales team lacked robust information on the profitability of various products, and the cost of delivering those products to customer sites. That meant that while the team could increase sales volumes, they would not know if they were doing so at a profit. To enable sustainable growth, a comprehensive analysis of product and logistics costs was completed last year and shared with the team.

Today, each salesperson can see the total costs - and potential profit - for each order. They know that the cost of delivering a single roller door to a building project may be similar to the cost of delivering a whole 'basket' of products. That allows them to talk to customers about supplying all the items required for a project at a price that is competitive to the customer, and profitable to Stramit. The strategy is working. Over the last three months the value of the average order in target segments has increased by four percent.

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Waste reduction is central to New Zealand's national sustainability strategy but few facilities exist for business recycling.

In the Auckland region, less than one per cent of industrial, demolition, and construction waste - timber, plasterboard, steel, cardboard and plastics - is recycled.

Winstone Aggregates, and joint venture partner Kalista, are developing a resource recovery centre at the former Laminex particleboard factory at Kumeu. The CIDRR plant (commercial, construction, industrial and demolition resource recovery) will divert up to 150,000 tonnes of waste from regional landfills each year. Companies will be able to dispose of waste responsibly, at a competitive rate, with construction projects getting the added benefit of earning real Green Star points. Resources recovered will be processed and sold. Bulk commodity markets for recovered steel and wood already exist, while new product markets for material such as gypsum are being developed.

The use of the Laminex site is an example of 'reduce, reuse, recycle' in action, with the existing 10,000m² building and some existing processing plant being adapted for resource recovery. The plant will ultimately process around 500 tonnes of waste a day, and employ 20 people directly and up to 100 indirectly.

More about Fletcher and the Environment

Pacific Steel is on the road with recycling, turning hot rods into wire rods.

Sims Pacific Metals, a 50/50 joint venture between Fletcher Building and Simsmetal Industries, collects waste metals at centres throughout New Zealand. This includes an estimated 90,000 car bodies annually, as well as the metals from sources ranging from dumped refrigerators and washing machines to decommissioned railway stock and ships. Sims delivers approximately 300,000 tonnes of scrap steel to Pacific Steel each year. This is then processed into 100% recycled steel which is manufactured into high quality reinforcing bar, wire-rods and other wire products. It’s the largest recycling operation by weight in New Zealand.

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Formica is bringing brand to the surface at Kentucky Fried Chicken restaurants throughout China.

KFC is mainland China’s fastest growing restaurant chain, with nearly 2,600 restaurants in more than 550 cities. In 2008, KFC opened 450 new restaurants, and remodeled 260 existing. The Formica China Sales and Marketing group worked closely with KFC’s design agencies and in-house teams to deliver exciting and durable interiors, with branded signage and decoration incorporated into high pressure laminate and solid surfaces. Formica-branded products now surpass local and international competitors in volume of surfacing materials specified for KFC’s restaurants across China.

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The Australian and New Zealand governments have both announced substantial incentive packages to encourage homeowners and landlords to improve home insulation.

It is estimated that up to 2.9 million houses in Australia, and up to 900,000 in New Zealand, require additional insulation. Fletcher Building's Pink Batts are premium insulation brands in both countries and are likely to be the product of choice for many homeowners and landlords who take advantage of the subsidies. Pink Batts are made from up to 70% recycled glass and save hundreds of times more energy than is used to produce them.

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In 1909, James Fletcher and his partner Albert Morris built a timber weatherboard villa with a corrugated iron roof, at Broad Bay in Dunedin

Typical of New Zealand houses of the time, the villa was uninsulated and relied on open fires and a coal range for heating. One hundred years on, Fletcher is building houses, terraces and apartments at Stonefields in Auckland, a master-planned community. From foundation to roof, Fletcher products are integrated with proven green building technologies and design to deliver living environments that are energy efficient and comfortable year round.

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Products used in the construction of the prestigious Melbourne Convention Centre had to meet the highest standards of sustainability to qualify for the Green Building Council of Australia’s premier six-star rating.

The Laminex Group developed a timber veneer panel specifically for the project that met both the Forest Stewardship Council’s (FSC) environmental standards and the high design standards set by the project architects. Laminex’s semi-gloss Spotted Gum Veneer panels were described by the project’s design leader as having “a sumptuous high-quality appearance.” Laminex FSC Timber Veneers are part of the Greenfirst range that has subsequently been created to meet increased demand for green building products.

More about Laminex