The Real Costs of Buying Cheap Building Products

Transcription

1 The Real Costs of Buying Cheap Building Products

2 Introduction Building materials imports are on the rise in Australia. As the costs pressures on domestic companies increase, so do the number of companies moving their manufacturing offshore 1. This, combined with the rise and rise of Chinese manufacturing and our ever-shrinking world, means sourcing cheap materials from overseas is now just as simple as buying locally manufactured products. Of course the greatest benefit to Australian consumers of this easily accessible overseas market is its impact on a project s bottom line. Many companies borne out of these changing markets are able to undercut the prices of more recognised brands with a seemingly competitive product. Whilst the products may seem comparable, with the cheaper alternative becoming the more attractive option, there are a number of considerations that should be taken into account before deciding where to source your materials from.

3 Product Quality and Guarantees Making guarantees on a product s quality is easy, but backing up these guarantees is what counts. Locally, Australian Consumer Law (ACL) protects consumers and businesses against products or services that do not satisfy the claims made by the supplier. The guarantee includes the rights to repair, replacement or refund, as well as compensation for damages and losses 2. If large amounts of money are being spent on materials, it is important to have the assurance that if something goes wrong no one is left out of pocket and the completion of the project is not jeopardised. Conforming to Australian Standards Counterfeiting is prevalent, with products being labelled as meeting Australian Standards actually being substandard Numerous Australian Standards exist for the building and construction industry. These standards have been developed to add to the safety, efficiency and cost-effectiveness of building in Australia 3. Many of the cheaper products imported from China do not meet regulatory Australian or industry standards. Often not tested to Australian standards, these cheaper imports can be tested initially and passed, with subsequent products then manufactured to an inferior standard. For these reasons, if purchasing an imported product, it is recommended to do so through a trusted Australian distributor who imports from reliable and established international manufacturers. Counterfeiting is also prevalent, with products being labelled as meeting Australian Standards actually being substandard. These substandard products can be found across all materials used in the building sector, from steel, copper and electrical products to glass, aluminium and engineered wood 4. Built for Australian Conditions Australia has some of the most unique and varied weather conditions in the world, and as such, materials and products used must be created to withstand whatever is thrown at them. Harsh, unpredictable, often destructive; within the space of six months any one building could be exposed to temperatures in excess of 40 degrees to below freezing 5, through to extreme weather events such as cyclones and extreme winds, intense rain, bushfire, snow, and flooding. Because of the enormous variance in conditions across the country there is no one size fits all solution for the building industry. Regulations and standards will vary dependent on a structure s proximity to specific regions (eg. bushfire prone areas), and its likely exposure to adverse conditions. It is vital when sourcing products that they are resilient to the demands of the location. A breach of the legal obligations associated with supplying substandard products can be debilitating to any company, with ongoing ramifications and potentially disastrous consequences.

4 Case Study 150 Collins Street, Melbourne The finishing touches were recently applied to Westpac s prestigious new Melbourne headquarters at 150 Collins Street. The stunning $180 million project stands out amongst the other banking offices in the precinct due to the glass façade (see below) that envelops the entire structure. The project however encountered a major set-back when it was deemed that the glass used, imported from a Chinese supplier, to be substandard and of low quality when compared with Australian glass 6. The glass exhibited irregular iridescent blue streaks and perimeter bands caused by defects in the application of a heat-reflecting metallic sputter coating. The developers were forced to pay for the replacement of the glass at a cost of $18 million for the materials alone. The Construction Forestry Mining and Energy Union (CFMEU) advised that the entire ordeal could have been avoided if better quality local glass had been chosen to begin with. This project is just one example of what is becoming a very common situation in the building industry.

5 The Real Cost The wide-spread use of cheaper, non-conforming products across the building and construction sector is evidence that a product s price can all too often take precedence over quality and safety. Alarmingly, recent research has revealed that 92% of Australian building and construction companies utilise nonconforming products somewhere in the supply chain 7. Not surprisingly perhaps, 45% of respondents surveyed reported that the use of these products had adversely impacted on their revenue, margins and employment numbers. The ongoing costs associated with using substandard products, including product repairs and maintenance, replacement, project delays and fines will far exceed any savings made on the initial purchase price. These hidden costs should all be taken into account before deciding on a product. As the demand for cheaper products becomes more competitive and costs are cut even further, the quality of these products will continue to decrease even further. As the old adage goes; if a deal seems too good to be true, it probably is. When you pay more to purchase from an established, reputable company, not only are you paying for a higher quality product, you also have the comfort of knowing that guarantees and warranties will be honoured, that ongoing technical support can be provided, and that no corners are cut in ensuring products adhere to regulations and standards. SGI Architectural SGI Architectural is the leading Australian distributor of the highest quality facades, through architectural specification to the commercial building and construction industry. SGI supply the architectural market with a wide range of quality products, including Alpolic Aluminium Composite Panels, Prodema Timber Veneer Composite Panels, Moeding Clay Tile Facades, Swisspearl Coloured Façade Panels, and Eurobond Non-Combustible Sandwich Panels. Each of these products provides architects and designers the freedom to achieve levels of design previously thought impossible. With the options of fire-resistant, sustainable, lightweight and rigid materials, SGI products allow you to satisfy modern building demands whilst still allowing for stylish and contemporary creations. SGI Architectural takes pride in their products, only sourcing and selling the highest quality products from world-renowned market leaders that set a benchmark for the industry. From design through to completion, SGI Architectural will work closely with architects, developers, builders and fabricators to provide a dream result for building owners.

6 [1] Why building materials imports are on the rise in Australia, Architecture & Design, David Wheeldon, 17 April [2] Consumer rights & guarantees, Australian Compertition & Consumer Commission, [3] Australian Standards, Master Builders [4][ Non-conforming building products Master Builders, AWA, 28 July [5] Melbourne Daily Records, Weatherzone Melbourne Climate [6] Grocon says CFMEU is ill-informed after union accuses project of using substandard building product, Nathan Johnson, 23 June [7] The quest for a level playing field The non-conforming building products dilemma pg.6, The Australian Industry Group, November Reports/2013/REPORT_NCP_FINAL.pdf