Leading infrastructure and building materials manufacturer Fletcher Building has announced it will exit the copper tube manufacturing business in Australia, which will result in the closure of the company’s factory in Penrith, affecting 108 jobs.
According to the National Business Review, Fletcher expects manufacturing and domestic trading at the copper unit to cease by the end of the year, with a transition out of export trading likely to be concluded within 18 months.
The move to close the Crane Copper Tube (CCT) factory in Penrith follows an extensive analysis of options to restore profitability. The factory has been unsuccessfully tackling the issue for years and finally succumbed to the mounting fiscal pressure caused by a number of factors, including manufacturing overcapacity of copper tubing for plumbing requirements in the Australian market, the increasing substitution of copper tubing with other materials such as plastic composites, and increased import competition.
Fletcher Building Chief Executive Officer, Mark Adamson, said the decision to cease trading was not made lightly, adding that the company would seek to redeploy workers wherever possible.
“Our priority right now is to do the right thing by our people. I realise this is a particularly difficult time for our employees and we are committed to ensuring any potential opportunities for redeployment within Fletcher Building are fully explored. Where that is not feasible, we will support our employees through the transition to alternative employment,” Mr Adamson said.
Fletcher Building acquired the business when it took over the publicly listed Australian plumbing supply chain and plastic piping company Crane Group in early 2011 in a deal valued at $1.2 billion.
The company said it expects to record a significant expense of up to NZ$19 million in the financial year ending 30 June 2015, reflecting the costs associated with the closure of the business.
The Penrith site will remain in Fletcher Building ownership, the company said.