“There’s a huge demand for plasterboard in New Zealand right now,” says Elephant Plasterboard owner and Managing Director, Kevin van Hest, “but the industry has spent decades putting all its eggs in one manufacturer's basket, and we’re now really seeing the effects of that.”
Kevin has been with Elephant Plasterboard for 34 years, during which time the company has developed a whole range of premium plasterboard products and systems, but still struggled to get a good market share. A combination of COVID-related supply chain issues and a huge increase in building permits has seen that balance begin to shift. “There’s been a huge, unusual demand peak and we’ve been super busy scaling up. Building professionals who can no longer get plasterboard from the dominant local manufacturer have been coming to us for alternative solutions.”
A big part of the current supply challenge, Kevin says, is the ‘lock-step problem’, where large-scale builds are scheduled in phases. Ideally, one unit will commence building, and then the next unit 3 months later, enabling building companies to do the work in stages. Major supply chain disruption has meant that, often, builders are getting stuck waiting 3 months for materials on that first unit and then, suddenly, facing a domino-effect where they have a number of units all needing the same materials at the same time. “For example, one of our clients is a supplier for larger, bespoke homes who usually takes on 12 houses per year. He recently got an order for 10 houses in a 3-month window that need to be internally lined all at once. His business hasn’t tripled, just the demand peak for his products. With that happening all over the country, and plasterboard being the last major installation in any build, it’s no surprise that there have been such critical shortages.”
The results have been long delays, increased costs and panic-buying of building supplies. This could have been significantly lessened, Kevin says, with better competition over the last 20 or 30 years. “All of the serious market contenders have been killed off by an effective monopoly in the plasterboard sector, which means that when we do have an unexpected demand peak, there is no secondary supplier that can take up the slack. We’re the last ones standing.”
With a premium product that offers fire, structural and cost benefits, its easy to see why Elephant Plasterboard has weathered the market storm. “Our 10mm standard board can span 600cm on a ceiling, where the alternative would need to be 13mm to prevent sagging at that span distance. It’s a much stronger spanned board, that’s why we call it ‘Standard Plus’. It also has the same fire rating as our competitor’s higher-performing board and out-performs it on structural bracing. If you build a house with Elephant Plasterboard and take us up on all the features we offer, you’ll end up with a lower-cost solution and a stronger house. I should also note,” he laughs, “that we’re really nice people.”
Kevin is equally passionate about his products and his team. “Some of them have been here with me more than 20 years because they agree that we have some really innovative systems that no one else has. We’re passionate about offering New Zealand, in our own small way, a choice. And I know that one day soon we’re going to finally, really crack the market share problem.”
A big step toward this, Kevin says, is getting specifiers and legislators better educated about Elephant Plasterboard and more willing to consider it as a premium alternative to what they’re used to. “There are a couple of key issues we’ve faced repeatedly over the years with regards to misinformation about our product. People will think it’s non-compliant, not guaranteed or unsuitable for use in Council builds. None of this is true. But it’s been perpetuated by a perceived difficulty of consenting Elephant Plasterboard.”
The key to fixing this, he says, is for Elephant Plasterboard to get into builds at the planning and specifying stage. “One of the biggest problems we see is that builders will put a brand-named product on their consents, making it very difficult to use an alternative. We have a totally compliant product which designers love, but they don’t want to get mucked around in the consent process so they’ll often just go with what they’ve always known. We’ve been keeping a close eye on the recent Commerce Commission briefing in the hopes that the building code can become more competition-friendly to support smaller businesses like ours. Developers should be able to switch from brand A to brand B without consent ramifications. Builders should be able to flip a coin and decide what they want today. That choice is the whole point of a free market, but that’s not how it has been in New Zealand.”
Kevin is bracing for a market correction in the year ahead, when he expects to see an over-supply of plasterboard now that supply chain issues are starting to ease and building permits are slowing down. “Instead of waiting 3 or 4 months to get plasterboard products, you’ll be able to get them in 3 or 4 days. Ultimately, we’ve lived in that market-corrected version of the industry for our whole lifespan, so we’re gathering our acorns for the coming winter and preparing to see what happens when the country is flooded with products again.”
His hope is that Elephant Plasterboard has welcomed enough new clients on board during the pandemic to help chip away at the domestic market share, and that his products will continue to speak for themselves even when others become more readily available. He’s also tight-lipped about new product innovations that Elephant Plasterboard has in the works. “Some of the things we have planned could change the way plasterboard companies throughout the whole world do things.”
Kevin is excited to partner with Teulo and provide some better education about his products to the industry. “There’s so much that the industry could do better and we know how to help. I’m really looking forward to sharing our knowledge about best practice and design with the Teulo community and, I hope, getting Elephant Plasterboard top-of-mind for builders at the specification stage. On the flip side, I’m also really looking forward to connecting more directly with the industry to learn what we could be doing better as well.”
To learn more about Elephant Plasterboard and connect with Kevin, visit https://elephantplasterboard.co.nz/.
