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Saint-Gobain’s $4.5B Bet on ‘High Growth’ Aussie Construction

One of the world's largest building materials companies has acquired CSR, and is now looking to capitalise on a booming housebuilding industry.


Fri 12 Jul 24

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One of the world’s largest building materials companies is now targeting the “high growth” Australian construction industry, with Saint-Gobain finally executing a $4.5B buyout of gyprock and plasterboard giant CSR.

The deal represents a watershed for the building materials market, with Australia now Saint-Gobain’s 10th largest market expected to proliferate. This is fuelled by population growth and a catch-up in residential construction, which account for just 8% of CSR’s sales, compared to 70% of Saint-Gobain’s European sales.

According to Benoit Bazin, Saint-Gobain Chair and CEO, “The acquisition strengthens our presence in the fast-growing Asia-Pacific markets and fully aligns with our “Grow & Impact” strategy and our worldwide leadership in light and sustainable construction.

One of Australia’s oldest companies, CSR, is “no longer Australian,” according to Sky News Business Editor Ross Greenwood. “The original Colonia Sugar Refining Company … has been taken over by Saint-Gobain from France – one of the largest building materials companies in the world.” Footage courtesy of @skynewsaustralia.

As part of the strategy, Saint-Gobain—which now operates in 72 countries—is investing heavily to become the “worldwide leader in light and sustainable construction” and, as one of the principal partners of the Paris Olympics, is building on success in delivering games infrastructure.

This includes the €2b Athletes Village, which rose on time and budget in Saint-Denis, on the outskirts of Paris – the village, 45% made from timber, was kitted out with plasterboard, glass and recycled insulation provided by the 360-year-old French native Saint-Gobain.

Today, the company is one of France’s top 10 by revenue (€47 billion in 2024, according to analysts’ forecasts) and market capitalisation (€37.7 billion) and has 160,000 employees in 76 countries. According to the AFR, France is its biggest market by volume, while the American market remains its most profitable.

And because of this, it is well-equipped to deliver the building materials required to meet Australia’s ambitious housing targets and scale up to meet Brisbane’s Olympic Games infrastructure—with the major stadium infrastructure tender packages anticipated to go out to tender next year.

An aerial view of Paris 2024 Olympic Village on January 31, 2024, in Saint-Denis, Paris outskirts, France. With the Paris 2024 Olympic Games in a few months, construction for the Village that will host some 14,000 athletes is in full swing in the Seine-Saint-Denis department, the poorest in mainland France. SOLIDEO, the public institution in charge of construction for the Olympics, promises that the Olympic Village will leave a long-lasting legacy in the working-class area, where 25 per cent of residents live below the poverty line. Once the Games are over, the village will be transformed into a new neighbourhood with space for 6,000 residents. The area will have offices, shops, cultural and sporting venues, schools and a 3.5-hectare park. (Photo Credit: Drone Press/ABACAPRESS.COM)
An aerial view of Paris 2024 Olympic Village in Saint-Denis, on the outskirts of Paris outskirts, France.Saint-Gobain supplied the plasterboard, glass and recycled insulation for the village. (Photo Credit: Drone Press/ABACAPRESS.COM)
Saint-Gobain is ready to help solve the Aussie housing crisis.

For Mr Bazin, the move into Australia represents a play on the long-term fundamentals of the housing market. He said CSR is everything about building a new home or renovations, the “building envelope”.

“We are looking at growth in the big countries where geopolitics is solid, the currency is solid, and there is a good population growth, which for us is the main driver of construction,” he told News Limited today.

“Australia is a very attractive market,” Bazin says. “It’s true for the population. It’s true for construction. There is support from the government at various levels to deliver on the housing needs; it’s been a growing construction market for us for years if not decades.”

But for Mr Bazin, building a house runs deeper than just construction. Homes, he said, “are the crossroads today of several social topics.”

First, there is the shortage issue; then, there are the pressures around affordable housing and the environment. Finally, a massive amount of energy goes into housing to keep it cool or warm.

“In France, we spent 45% of the energy in buildings, which is more than the nuclear plants produce,” Mr Bazin told News Limited in an exclusive interview. “Within buildings, you can save a lot of energy. When we do a full renovation of a home in France, we can drop five to six times the amount of energy spent – and then you can free up energy and use it in areas like industry or ­mobility, where you need energy.

Australia is a growing market for global construction.

The acquisition of the 170-year-old CSR—which includes Gyprock, Bradford Insulation, formwork giant AFS, Monier roofing, and Hebel—came after Lendlease sold its UK and US assets and consolidated operations in Australia.

Lendlease has been instrumental in delivering a number of projects across Europe and North America - including the activation of the London Olympic Athletes Village into International Quarter.
Lendlease has been instrumental in delivering several projects across Europe and North America, including the activation of the London Olympic Athletes Village into International Quarter.

That deal freed up $2.8b to invest in projects like “the Halo,” a 55-storey timber hybrid building slated for central Sydney. At the same time, Japanese conglomerate Sumitomo Forestry is investing $1.2b to drive mass timber build-to-rent projects in Brisbane, Canberra and Melbourne.

Author

  • Jason Ross

    Jason Ross, publisher, is a 15-year professional in building and construction, connecting with more than 400 specifiers. A Gottstein Fellowship recipient, he is passionate about growing the market for wood-based information. Jason is Wood Central's in-house emcee and is available for corporate host and MC services.

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