Boral Ltd has cut back its operations due to a surge in energy prices in Australia, according to Reuters. The company has reportedly not only curtailed some areas of its production but has also been forced to pass the change in energy prices onto its customers. It is also in the process of reviewing its overheads to help offset the “inflationary challenges” the company told Reuters. Although Boral acknowledged efforts made by the Australian energy market operator to cap wholesale power prices, this was not enough to provide long-term confidence for large manufacturers who have had to take matters into their own hands. Boral downgraded its annual profit forecast in May this year partly due to rising energy costs.
Brickworks, Australia’s largest brickmaker, has also hinted at having to shut down plants and even move production offshore if measures to address the soaring energy costs do not go far enough. Although the US market accounts for just one-sixth of Brickworks’ earnings from building materials, the company pointed out that it could save money by shipping product back to Australia. Brickworks pays just US$3/GJ for gas in the USA, compared to the Australian government-mandated price cap of AUD40/GJ, or US$27.92.
