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Engineered wood set to improve its bottom line

WA engineered wood products group Wesbeam Holdings claims a “180-degree” turnaround in market conditions is set to improve its bottom line, after it posted yet another annual loss. Source: The West Australian

The company revealed an $8.1 million loss on sales of $68. 6 million for the 2013-14 financial year. That was a slight improvement on the $12 million loss on $57 million in sales in 2012-13.

Chief executive James Malone blamed the high Australian dollar, which peaked just below parity in the last financial year, for making foreign imports cheaper.

Adding to the competitive pressure, American manufacturers of laminated veneer lumbar had dumped products in Australia, as the US suffered one of its worst-ever housing downturns.

Mr Malone said the American products sold for as little as 30% below their usual cost, in what was already a competitive market.

“By my calculations, they were selling below the total delivery cost, and in some cases, below the cost of manufacture,” he said. “It could have been, in their view, a better way to operate than not selling at all.

“But all of that has changed 180 degrees in the past nine months, and it has given heart to Australian manufacturers.

“As the dollar has fallen, it has restored normal prices.”

He said US manufacturers had started to increase their prices as the US housing market staged a recovery. And the improvement had created opportunities for Australian manufacturers; with expectations the US would become a net importer, rather than a net exporter, by late next year.

“We had our first inquiry for a significant volume into the US this week,” he said.

Mr Malone said the housing market in WA and Australia was expected to soften over 2015-16, but would stay healthy.