Brickworks Limited

Brickworks Limited

Type	Public
Traded as	ASX: BKW
Industry	Building and Construction Materials
Founded	Australia (June 21, 1934)
Headquarters	Horsley Park NSW, Australia
Key people	Lindsay R. Partridge MD & Robert Bakewell CFO
Revenue	A$724 million (to July 31, 2015) [1]
Operating income	A$166 million (to July 31, 2015)
Number of employees	1478 FTE (2014)
Website	www.brickworks.com.au

Brickworks Limited is an Australian owned and based group of companies engaged in the design, development, manufacturing, marketing, distribution, and sales of a variety of building materials. In 2014, major brick competitors CSR and Boral merged to create Boral CSR Bricks Pty Ltd. ^[2]

History

Brickworks was founded on June 21, 1934 in NSW, in an effort to protect the Australian brick manufacturing industry from the wrath of The Great Depression.^[3] Initially, the company alternated from public to private but has remained public since 1939. As a manufacturer of building materials, the company eventually became involved in property sales, property trust, and waste management. This led to the development of The Land and Development Group which became the second main part of Brickworks Limited business model, with the first main part being The Building Product Group, and the third main part being The Investments Group.

1930’s

The Great Depression had a severe impact on the brick manufacturing industry. In response, to make brick manufacturing more efficient and economic, the NSW Brick Master’s Association dispensed unnecessary yards. The Brickworks Limited company was created, and focused on marketing and distributing bricks and clay products.

William King Dawes, who was General Manager of Austral Bricks and managing director of Brickworks, spearheaded a newly established council - The Council of Brick Manufacturers. As chairman, Dawes combined Brickworks Limited with various companies and independent brickyard owners in a 10-year agreement to secure the companies viability. Part of this agreement was an imposed fee to cover marketing, distribution, and selling expenses of bricks and other clay products. In 1935, the St. Peters Agreement was signed which divided Sydney into zones serviced by local brickyards. A yard that did not survive the depression, Manly Brick & Tile Company, still had millions of bricks in inventory that were then purchased by Clay Industries Limited, a Brickworks Limited subsidiary.

In 1936, Austral Bricks revised its Articles of Association to become privatized, and Brickworks Limited expanded its capacity by acquiring State Brickworks from the New South Wales Government. In the same year, 14 tile roofing companies joined forces to control the quantity of production against the demand to prevent the decline in prices and formed Roof Tiles Limited. In the following years, Brickworks Limited bought a number of assets, properties, and companies that were running out of resources. In 1939, during wartime, a strict price control on bricks and lending restrictions on cooperative societies was implemented, and the Brickworks Limited reverts to a public company.

1940's

The completion of building construction and building repairs plummeted from 8,138 in 1940 down to only 582 in 1943 due to the high fees to secure government approval. In spite of this, Dawes kept brick yards running with the intention of storing the produced bricks in inventory and then selling them at a premium price after the war ended. However, the war effort required facilities for the production and storage of the navy’s supplies. Brickworks rented out some of their sites, and converted yards and kilns into ammunition stores. After the war ended, Brickworks made a claim for compensation which was paid over four years later.

In 1943, shareholders of Austral voted to sell shares to Brickworks Limited and unify as one company with the agreement to appoint Dawes as Managing Director for the first five years, and the next five as a General Manager. Brickworks Limited now owned majority of the shares in Austral bricks. In 1945, the government requirement to secure permits to construct a single unit dwelling place were finally lifted.

1950's

During this period, Brickworks Limited gained full control of Austral Bricks, becoming one of the largest brick manufacturing companies in Australia. Towards the end of the decade, Brickworks purchased Rochedale Brickworks^[4] for only 29 500 pounds, allowing the company to enter the Queensland market. In 1959, Brickworks acquired large numbers of land and property to ensure the company had an abundance of raw materials and supply of resources for brick manufacturing.

1960's

Brickworks began to improve sites, modernize manufacturing processes, and the construction of tunnel kilns for extruded texture bricks at their Wallgrove site began. Another company, Punchbowl Brick and Pipe Company Pty. Ltd., is purchased. In 1961, Brickworks Limited is listed on the Australian Stock Exchange, and a new plant in Wallgrove is opened. In 1965, three tunnel kilns were in full operation at the Wallgrove site. Then in 1965, a second plant in Wallgrove was opened, and additional kilns were built in 1969 to handle the demand for production. (A third plant at Wallgrove follows shortly in 1972). In 1969, Brickworks entered into a cross-holding agreement with Washington H. Soul Pattinson (WHSP).^[5]

1980's

On August 10, 1981, company leader W.K. Dawes passed away. Brickworks and Austral also closed some of their sites. With the advancement of technology in the 80’s, some manual processes are made redundant and replaced by automated processes. Several sites were refurbished and completely revamped into automated facilities. By 1985, Brickworks owned 42.8%^[6] of stake in Washington H. Soul Pattinson.

1990's

During this decade, Brickworks Limited launched a number of new products, converted sites, and rebranded some of the companies they owned, in response to an evolving market and changes in demand. The 1st Governor Sandstock was produced, the new Austral Slick Brick was launched, and the Punchbowl site was converted into a terracotta tile operation. The Punchbowl Pipes Pty Ltd was rebranded to Australia Pty. Ltd., Austral pipes Australia was renamed The Austral Tile Company. Brookvale Brickworks, which had been running since 1907, was closed, and pioneer brick factory at Riverview, Queensland, was acquired.

2000's

At the start of the new millennium, the digital age has a big impact on market behaviour. Austral Bricks adapted to this change by launching their own online ordering system – the E-brick.^[7] The following year they introduced Terracade, Austral’s Terracotta Façade system. Later that year, Austral commissioned a new $2 million floor tile factory at Punchbowl site.

Brickworks Limited continued making substantial investments: buying stakes in Bristle Limited, an Australia-based roof tiles, pavers and bricks manufacturer, purchasing Bowral Bricks company and acquiring Eureka Tiles Pty Ltd.^[8] (which later merged with The Austral Tile Company and formed Eureka Tiles Australia).

By the 2003, Brickworks Limited had acquired 100% of Bristle Limited, and started a new endeavor in the timber industry and bought Auswest Timbers, a timber producer in Western Australia. Additionally, Brickworks Limited continued purchasing bankable construction materials companies. From 2005 to 2010 Brickworks purchased GB Masonry, Caloundra Blocks, Whitsunday Concrete and Block, AYR Masonry Smart State Blocks, Brick and Block Masonry Plant, and Gocrete PTY LTD.^[9]

2010-Present

In 2011, Brickworks Limited continues to acquire companies such as East Coast Masonry in Coffs Harbour, and a timber mill and processing centre owned by Gunns Ltd.^[10] southwest of Western Australia. Brickworks also ventured into a new line of production and dedicated it an entire division: Brickworks Building products division for Austral Precast, the largest a precast concrete panel producer in the Australia.

In 2012, demands for precast concrete increased and in response Brickworks expanded their company and bought CPS Precast. This same year, Brickworks Limited finally gains ownership of the remaining 50% of the share in their 50/50 joint venture with Daniel Robertson Australia Pty Ltd (which was established in 2006).^[11]

In March 2012, Boral Ltd. sold two of their masonry plants to Brickworks and Austral, and the following year, Boral Ltd.’s Prospect, NSW masonry plant was also sold to Brickworks.^[12]

For the Financial year 2013-2014 Brickworks Limited paid zero tax as reported in by the Australian Tax Office ^[13]

In March 2016 Lindsay R. Partridge estimates Brickworks Limited is importing about one million bricks from Spain a month due to a lower shipping cost, which might have undue consequences for his own employees.^[14]

Corporate Governance

Brickworks Limited is headquartered in Horsley Park NSW, 2175, Australia and operates in all states throughout Australia and in New Zealand. Brickworks Limited is publicly traded on the Australian Stock Exchange and exchanges under company code BKW.^[15]

Investments of the company represent 43% interest in Washington H. Soul Pattinson and have provided a stabilizer to the often volatile Building Products earnings stream.

Board of Directors:

• Lindsay R. Partridge 2000 – present. Managing Director
• Michael J. Millner 1998 – present. Non-Executive Director, Deputy Chairman
• Robert D. Millner 1999 – present. Non-Executive Chairman
• Brendan P. Crotty 2008 – present. Independent Non-Executive Director
• David N. Gilham 2003 – present. Independent Non-Executive Director
• Deborah R. Page AM 2014 – present. Independent Non-Executive Director
• The Hon. Robert J. Webster 2001 – present. Lead Independent Director

Financial results:

In the financial year ended 31 July 2015, Brickworks net profit after tax (NPAT) was $120.3 million, an increase of 18.8% from 2014. Normalised earnings per share increased by 7%, going from 40.5 cents per share in 2011 to 45.0 cents per share in 2015.^[16]

Corporate Structure

Under the Brickworks Limited umbrella are three main groups: The Building Products Group, The Land & Development Group, and the Investment Group.

1. The Building Products Group is the branch responsible for the operation of the company’s 11 current brands of building products, from sourcing raw materials, to manufacturing, to warehousing, to distribution and logistics, to marketing and promotion and sales. This branch is also responsible for research, development and design of new products to cater or serve the demands of the building industry and the market in general. It also houses the company’s creative force in coming up with innovations in building products, setting trends and incorporating new technology to manufacturing and design.

2. The Land and Development Group branch exists to maximise the value of surplus land created by the Building Products business. This branch of the company consists of:

• Land Sales
• Property Trust
• Waste Management

The business maximises the value of surplus land through: a. Residential and other land to be:

• Rezoned, rehabilitated & prepared for sale by Brickworks
• Sold to the open market

b. Industrial Land to be:

• Rezoned and rehabilitated by Brickworks
• Assessed for inclusion in a property trust and held long term

3. The Investment Group is responsible for making strategic decisions for Brickworks Limited, such as seeking business opportunities, making judgement calls, generating projections and calculating risks. Additionally, it is responsible for tactical planning and ethical decision making as well as caring for the rights of the shareholders, safeguarding the integrity in financial reports, and making timely balanced disclosures.

Brands

Currently, the brands under Brickworks Building Products are:

Austral Bricks: Founded in 1908, Austral Bricks manufactures clay bricks and pavers, and has facilities in every state of Australia. Austral Bricks' manufacturing facilities are fully automated with robotic equipment.

Austral Facades: cladding for commercial and residential buildings that are designed to be aesthetically pleasing using terracotta.

Austral Masonry: Produces grey concrete blocks which are used in every facet of the building industry. This division of Brickworks manufactures coloured concrete masonry units, as well as pavers and retaining wall systems aimed at residential and large-scale commercial applications.

Austral Precast: provides client-specific precast solutions, customised wall, floor, and column. This division operates from five plants located along the eastern seaboard and in Western Australia.

Auswest Timbers: This division manufactures a diverse range of timber products. Jarrah, Karri, and Chestnut timbers are processed into a range of decorative, seasoned products for furniture and joinery, flooring, decking, staircase components, veneers and fence screening. Green structural timbers are also processed for mine, wharf and rail track construction, as well as for floor joists, roofing timbers and roof tile battens.

Bowral Bricks: Dry-pressed bricks that combine manufacturing methods of the old with the manufacturing methods of the new. This unique combination of traditional craftsmanship and modern technology results in the bricks having very distinct features.

Bristile Roofing: This division has provided its roofing services for almost a century. Currently holds the official distributorship rights to La Escandella terracotta roof tiles from Spain.

Daniel Robertson: Established in 1853, this division manufactures premium-quality clay bricks and are the first entire brick range in Australia to be certified carbon neutral.^[17] that are highly regarded in the brickworks industry.

La Escandella: European-style roof tiled manufactured in Spain.

Nubrik: This division still moulds bricks the traditional way using century-old presses and methods that date back to 1862. As a result, the Nubrik range has a number of rich colour blends.

Nzbrick: Formed in April 2013, NzBrick Distributors is a joint venture between CSR (Monier) and Brickworks (Austral Bricks).^[18] Besides clay bricks, the company also sells Designa Schist, Designa Basalt, Natural Stone and Terrazzo concrete pavers.

Pronto Panel: Pronto Panel is a non-load bearing panel system that can be used both internally and externally.

Design Place: An online portfolio of architecture and design from Brickworks Building Products featuring carefully selected residential, commercial and landscape projects.

Inex Boards: Provides various range of lighter weight materials for the construction industry. Alternative to fibre cement and plasterboard products that are both low carbon and high performing.

Community & Sponsorship

Between July 1, 2012 and May 31, 2013, Brickworks Limited raised $141 718 for the independent medical research institute Children’s Cancer Institute Australia (CCIA).^[19] Their contribution will help in the advancement of the institutes research, and progress to actual cure and prevention of childhood cancer.

Environment and Sustainability

In its policies and procedures, Brickworks is an advocate of sustainable living. It is also a member of Sustainable Business Australia (SBA):^[20] a not-for-profit organisation aimed at creating initiatives to lower business practices' carbon footprint. SBA uses multi-media and digital mediums to educate people and encourage the market to opt for home designs and home building materials that has the least impact on the environment. Videos of homes and projects they built with Ausbuild^[21] were to demonstrate how to plan for an environment friendly construction process, the advantages of sustainable home designs and the perks of energy saving materials.

Brickworks is active in improving manufacturing processes to lower their carbon foot print, and have recently developed a method to manufacture carbon neutral bricks.^[22] Additionally, Brickworks have also developed a green house gas and energy reduction strategy^[23] that aims to reduce their impact on the environment. Ultimately, this will allow higher output, higher quality, less use of raw materials, reduced energy consumption and lower emissions.

Website

• http://brickworks.com.au/
• http://buildforliving.com.au/

References