Tamawood says its business is safe but warns of industry breaking point

Home builder Tamawood said it was not at risk of financial collapse after media reports suggested 50 per cent of Queensland’s building industry was at risk of insolvency.

Nov 18, 2021, updated Nov 18, 2021
Building approvals have bounced back after a slump during October

Building approvals have bounced back after a slump during October

The construction company shares have slumped since the start of the month over claims the sector was in deep trouble, which had been highlighted by the recent $28 million collapse of Privum.

Tamawood said it had not yet been forced to ask clients to pay increased costs because of delays caused by the labour shortage or supply chain issues, but it has warned that the shortage of subcontractors meant that “in some areas the situation is at breaking point where it is likely that some builders who have not put sufficient plans in place will not survive”.

The company had also been forced to withdraw its services from some areas because of the lack of labour, which had also been exacerbated by the State Government’s public building projects. It had also imposed a limit on the number of contracts it entered into.

Chairman Robert Lynch told shareholders last week that there had been a substantial impact on the building industry from the Federal Government grant into what was already a booming market.

“It is difficult to blame the Government for this, but the industry bodies that clamoured for the introduction of the grant must take the blame,” Lynch said.

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“Along with this, the significant shortages of building materials and labour due to COVID-19 and other global issues have negatively impacted us causing delays in construction particularly in the last quarter of the financial year.”

“We are working hard to retain key suppliers and subcontractors,” Lynch said.

“Tamawood is well placed to complete all of its customer contracts and continues to work together with its key suppliers and subcontractor network to minimise delays to the completion of our customer’s homes and continue with the 14-day average payment terms to subcontractors.

“To date we have not approached any clients _ where the delay was not the caused by the clients _ for the cost of delays.”

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