Boral begs for national Covid response

Construction materials giant Boral has lashed confusing rules that shut down the building sector during ongoing lockdowns and called for a national approach to ease a financial hit for industry players.

“We are looking for a national approach to the response to COVID, and particularly a national approach to how we react and deal with lockdowns, and impacts on construction because frankly, what we’ve seen since mid July has not been helpful,” Boral chief executive Zlatko Todorcevski told reporters after its annual results.

“It’s always easy to turn off the tap of construction, but it’s a very very slow ramp up once you reopen that gate, and we’re experiencing that now. We’ve seen it in South Australia, we’ve seen a slow ramp up in Sydney, and frankly, there’s a lot of confusion around exactly what the operating protocols should look like, and they vary state by state.”

Temporary construction closures in greater Sydney and South Australia in July have already cut Boral’s earnings by $16m due to lost volumes and higher costs, leading to a $50m reduction over a three month period.

“We would want to see some broader alignment, ideally national standards on how not only the lockdowns will operate, but what the rules should be around construction rather than our customers and ourselves trying to create those rules.”

Concrete sales in the greater Sydney area have taken a hit from lockdowns.

“We’re managing to keep the vast majority of our quarries open, but production is noticeable down on where we had expected to be.

Production at our cement kiln continues at capacity and at pace, but demand is down so frankly at the moment we’re building inventory, and that’s a good thing because it gives us flexibility, but that’s not sustainable either,” Mr Todorcevski said.

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