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BUSINESSDESK: CSR and Brickworks are being allowed to merge their New Zealand brick businesses because the Commerce Commission takes the view that competition exists from the threat of new entrants and other forms of cladding.
The merger reduces the number of major clay brick suppliers in New Zealand to two from three.
Commerce Commission chairman Mark Berry says the commission is satisfied the proposed joint venture is unlikely to substantially lessen competition in the New Zealand market for manufacture, import and supply of clay bricks.
CSR NZ is owned by CSR Australia and Brickworks NZ is owned by Australian based Brickworks. CSR's brick manufacturing plant in New Lynn is not included in the proposed merger.
Their main competitor in New Zealand is Midland Brick, a distributor of products for Australia's Boral.
The applicants argued that brick was only one of a number of choices for exterior cladding.
James Hardie supplies fibre cement, Fletcher Building supplies concrete brick and block, and fibre cement, and Carter Holt Harvey supplies timber weatherboard.
Boral is expected to compete aggressively in New Zealand and there are a number of Australian and Asian-based brick manufacturers that could supply New Zealand, it was argued.