Fletcher plans for 'upturn'

Fletcher Building chief executive Jonathan Ling is not fazed by how Australian rivals are out-performing New Zealanders in business.

Addressing the trans-Tasman business circle in Auckland yesterday, Mr Ling said emerging from the recession, New Zealand firms were in a better position to maximise earnings.

They had undergone extensive restructuring and reworking of business models to adapt to the new environment.

But markets in Australia would have to compensate for the Australian Government's huge stimulus package before they could move forward, he said.

"They have done well during the recession, but their leverage on growth in the future isn't that great."

In the past two years, Fletcher had taken far-reaching measures in capacity and transformation programmes in reaction to a significant fall in construction activity.

"I like to think our operating measures coming out of this will outperform the Aussies by an order of magnitude."

Fletcher has closed factories in Australia and New Zealand, and cut 3000 staff.

Within the company, "the business unit manager is king", Mr Ling said.

The corporate office is made up of 12 managers who run 43 businesses around the world.

"We have a very low tolerance for underperforming businesses."

In response to the recession, the firm has done extensive work on performance measures including safety, working capital, delivery performance, customer satisfaction and leadership surveys.

In 2008, Fletcher could see that construction activity could fall to 15,000 houses, and planned accordingly.

"We are also starting to introduce upturn plans in to our business because we know the cycle has changed."

To compete with China, the firm has scrapped equipment which is 50 to 60 years old, and planned to reinvest in new technology when the markets recovered.

The company was looking for growth in New Zealand and Australia markets, and had a strong focus in Australia on acquisitions.

- © Fairfax NZ News