Australia: Adelaide Brighton warns of challenges

Australia: Adelaide Brighton warns of challenges
Published: 19 May 2010

Building materials company Adelaide Brighton Ltd warns it faces challenges including foreign exchange issues, cost pressures and competition from imports.

While the company’s well positioned for growth, it faces a number of challenges during the next 12 months, managing director Mark Chellew told the company’s annual general meeting on Wednesday.

He says foreign exchange changes are an issue, with contract renewal negotiations due next year with major cement and lime customers.

Mr Chellew is also concerned about the threat of lime imports.

"There is evidence of emerging opportunistic import competition in lime," Mr Chellew said, adding that the impact on the company so far had been minor.

Earlier this month, Mr Chellew warned of small scale opportunistic lime imports in Western Australia.

"At the same time, cost pressures continue in the business, particularly for energy," he said at the AGM in Adelaide on Wednesday.

In apparent reference to the federal government’s planned Resources Super Profits Tax, Mr Chellew said changes could add an element of uncertainty to the long-term outlook.

Adelaide Brighton is Australia’s biggest producer of lime and the second biggest supplier of cement to the construction and resource sectors.

Adelaide Brighton shares were down three cents, or 1.09 per cent, at AUD$2.72 at 1308 AEST.