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Boral, CSR to merge brick businesses

Building products makers CSR and Boral are seeking to combine their brick manufacturing operations on the east coast to save costs amid an ongoing decline in the sector.

The two companies are seeking approval from the Australian Competition and Consumer Commission (ACCC) for the joint venture, which is expected to have a combined revenue of around $230 million a year.

CSR would own 60 per cent, while Boral will have a 40 per cent stake, reflecting the relative sizes of their respective brick businesses.

The joint venture would have operations in NSW, Queensland, Victoria, South Australia, Tasmania and ACT.

Boral chief executive Mike Kane said the decision to combine operations came amid a sustained decline in the brick manufacturing sector.

"The Australian cladding industry has faced major changes in demand over the past 30 years resulting in a significant reduction in brick use," he said.

"This joint venture is aimed at driving efficiencies across the combined network of operations and would provide a path for Boral to realise acceptable returns for our brick business and, therefore, secure our long-term commitment to the industry," he said.

CSR chief executive Rob Sindel said the joint venture, which is expected to deliver savings of around $7-10 million per year, would ensure the viability of the sector.

"This joint venture is about retaining manufacturing in Australia and maintaining clay bricks as a choice for consumers in a broader cladding market," he said.

"It is about strengthening the opportunity for employees and re-investing in the industry while delivering satisfactory returns through the building cycle."