Sean Smith 27 April 2023 7:29pm
Australia’s biggest brick maker has accused the WA Government of turning its back on the company after closing its last brick plant in the State.
The move by Brickworks’ Austral arm to mothball its Cardup plant, in Perth’s south-eastern outer suburbs, will leave family-owned BGC’s Midland Brick as WA’s sole producer.
Brickworks said the closure of Cardup would leave the company selling from a year’s stockpile of bricks while it decides whether to quit WA.
Up to 75 jobs are affected, with Brickworks offering re-employment at facilities on the east coast where it is still experiencing labour shortages.
The Sydney-based group has been assessing the viability of its WA business for nearly a year, with its decision to write off $32 million from the value of the division in its interim results in March reflecting its assessment of the deteriorating outlook.
Brickworks managing director Lindsay Partridge reiterated late on Thursday that the company had struggled to make money in WA in recent years, despite demand for new homes.
He blamed various factors, including falling housing starts and an inability to recover rising costs from price increases, but also rapped the WA Government over Brickworks failure to secure approvals for a new kiln at Cardup that would improved the plant’s viability by increasing its capacity and cutting fuel costs.
“We’ve been trying to put a new kiln in at Cardup for a decade,” Mr Partridge told thewest.com.au.
“They don’t want industry in WA; you can’t get permission to do anything, so you can’t invest to become efficient.”
Mr Partridge said Brickworks “haven’t made reasonable returns in WA for a decade, and in the last five or six years we’ve been losing money”.
“We have got great staff and they’ve done the right thing, but you just get to the point where you just can’t continue on.”
Brickworks has previously described itself as almost “sub-scale” in WA since the competition regulator’s decision to approve BGC’s purchase of Midland Brick two years ago, a transaction that gave the rival 80 per cent of the State market.
More recently, increased costs have also eaten into its returns.
Mr Partridge said on Thursday that high inflation was “turning lots of operations that would normally be viable into loss-makers”.
“And if we can’t put our prices up to recover the costs, it doesn’t look pretty going forward.”
“You end up where you are, and people can’t afford to build houses.”
WA accounts for only 7 per cent of Brickworks’ revenue from building products and was the group’s weakest performer again in the six months to January 31.
During the period, detached housing and multi residential starts in WA were down 30 per cent and 34 per cent respectively, against falls of 10 per cent to 20 per cent in major east coast States.
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