The company has now cut its worldwide workforce by 1100 in the past six months. As part of its cost cutting drive, Boral has closed 11 higher-cost brick plants in the US.
Speaking at a Macquarie Australia conference in Sydney last week, Boral chief executive officer Mike Kane said that the company?s strategy is to shift its revenue base away from the Australian market and towards further growth in the US and Asia. He told investors implementing the strategy would take up to two years to complete.
The presentation outlined that Boral’s brick, roofing and masonry business was suffering low levels of demand and over-capacity in Western Australia and New South Wales. Its timber operation is also facing high inventory levels, as well as pricing pressure from the high Australian dollar, while low demand has hit its windows business.
Boral posted a net loss in the first half and analysts predict earnings will come in at about $130 million this year and twice that in 2014. Kane flagged the extra losses earlier this year as the company struggled against an unpredictable housing market in Australia.
The company now derives 80 per cent of revenue from the Australian market. It plans to cut this figure back to 50 per cent and increase revenue from the Asian and US markets.
According to Kane, Boral will focus its operations on construction materials and cement in Australia, gypsum in Asia and Australia and cladding in the US. It is aiming to raise $200 million to $300 million from divestments and land sales in the 2013-14 financial year.
Sources: The Australian Financial Review, Manufacturers? Monthly, The Australian, Business Spectator