James Hardie Halts Production at US Fibre Cement Plant
Australian building materials company James Hardie Industries said it would halt production at one of its ten U.S. plants due to poor conditions in the U.S. housing market, sending its shares down 2 percent.
It said on Wednesday it would book a charge of about $30 million to $35 million in the third quarter to reflect the suspension of the fibre cement plant in Blandon, Pennsylvania, which will hit 80 jobs.
"Although we have continued to partly offset the impact of the U.S. housing downturn by concentrating on market penetration against alternative materials, the further deterioration in market conditions led to today's decision," Chief Executive Louis Gries said in a statement.
The Blandon plant is the least efficient among Hardie's U.S. plants and has already been running below its annual capacity of 200 million square feet due to weak demand, Hardie said.
The company can produce 3.4 billion square feet of building materials a year in the United States, where it makes about 80 percent of its earnings.
Hardie's Australian rival Boral warned this week that its annual profit could fall by 15 percent this year due to weak U.S. housing markets and a strong Australian dollar.
Boral's chief executive, Rod Pearse, told Reuters he hoped the U.S. market would start recovering towards the end of calendar 2008 as builders clear stocks of unsold houses.
Hardie's shares fell as much as 2.4 percent after the announcement, and last traded down 1.3 percent at A$6.65 in a broader market that was down 0.6 percent.