Exchange rates mean German-based company Knauf Insulation are selling insulation for up to 50 per cent less than Australasia's biggest building product manufacturer, Fletcher Building, according to analysts.
Macquarie Equities Research analyst Stephen Hudson expressed concern to the Otago Daily Times over Australia and New Zealand's high dollar making cheaper imports a more attractive option within the building industry.
"Our key concerns lie in the New Zealand non-residential and infrastructure segments as well as for Australia. Additionally, we continue to see ongoing risks for reconstruction forecasts in respect of Christchurch and wider import pressure on product pricing for Australia and New Zealand."Hudson said.
Fletcher chief executive Jonathan Ling told the New Zealand Herald that Knauf's Australian business is shipping across glass wool insulation and other cheaper imports such as joinery and melamine panel which are being sold at Bunnings.
"…we need to compete vigorously to keep our customers. Knauf doesn't have distributors but they're just landing container loads so they cherry pick certain customers." Ling said.
Stuart Dunbar who is the Australian general manager at Knauf told the Otago Daily Times that the lack of competition in Australia and New Zealand has lead to a situation where housing is amongst the highest in the world.
"With companies in a monopoly or duopoly, consumers tend to pay higher prices and that's happening in the New Zealand market." Dunbar said.
