Building products supplier CSR says its outlook is positive as housing starts look likely to climb to record levels, with more than 200,000 expected in fiscal 2016.
“The lead times from approval to construction means strong demand for our products should continue over the next few years,” managing director Rob Sindel told shareholders at CSR’s annual general meeting on Tuesday.
He said an increasing number of people wanted to live closer to where they worked, which was fuelling demand for multi-residential housing closer to city centres.
The sector now represented around 45 per cent of all Australia’s new dwellings.
Mr Sindel said CSR’s brick-making joint-venture with Boral – formed in May through the combination of the two companies’ Australian east coast brick operations – was expected to generate initial overhead savings of $7 million to $10 million a year once the two businesses were fully integrated.
And, the turnaround of CSR’s Viridian glass business was tracking ahead of schedule, he said.
Viridian returned to profitability in fiscal 2015.
Management was now targeting new opportunities to grow revenue, particularly in residential performance windows and the commercial and architectural design markets.
Mr Sindel said the company’s aluminium division was experiencing increased volatility in pricing and premiums, partly due to increased exports from China, but this had been partially offset by the lower Australian dollar.
However, CSR continued to make operational improvements at the joint-venture Tomago aluminium smelter in NSW’s Hunter region.