Supplies co-op breaks new ground

Helping hammer down building costs. PHOTO: PETER MCINTOSH
Helping hammer down building costs. PHOTO: PETER MCINTOSH
Building supplies start-up Combined Building Supplies (CBS) has heeded the lessons of its rural co-operative cousins.

Founded in April last year, the building supplies co-operative has rapidly signed up almost 200 small building companies, landscapers and tradies across the country.

The model is structured along very similar lines to rural co-operatives such as Farmlands, although it has no retail outlets.

Its founders believe it is a first for the building supplies industry.

For an initial investment of $1000, co-op shareholders gain immediate benefits across a host of suppliers including Bunnings, Plumbing World, Flooring Centre, Kitchen Things, Noel Leeming and Hirepool.

Fuel and other member benefits are being negotiated, the company says.

Directors of the company boast a strong co-operative pedigree.

They include Ian Lamb, a former senior manager with CRT rural co-operative, builder and entrepreneur Carl Taylor and Simon White, former CFO of the Co-operative Bank.

Mr White said CBS was founded as a pure co-operative, as opposed to a buying group.

"It's an important distinction: our members own our business with benefits accruing back to shareholders in the form of an annual rebate, depending on the level of their transactions.''

He said the initial baseline had been set at $50,000, although that would be reduced over time as the co-op gained more members.

Members had to be in the trade and, ideally, GST registered, he said.

Rebates for the first full year would range from about $300 to nearly $2500 for larger firms, Mr White said.

He expected about 4000 members to sign up over the next three to four years.

Otago Builders' owner Steve Stewart said he bought into the building co-op last year after he found it on Facebook.

"It's a great concept, particularly in a competitive industry like ours, so any benefits or cost savings on building, bathroom or other materials can make all the difference to smaller companies.''

Mr Stewart said the CBS card had already paid for itself many times over.

"We've just done a major extension on a house in St Leonards and the cost savings on supplies were significant,'' he said.

Red QS national sales manager Paul Watson said the firm had done a cost comparison of CBS versus standard merchant rates based on building a four-bedroom, two-bathroom home.

The exercise had noted a saving of about 11%.

"Even on a modest build this could translate to significant savings which can be shared between the builder and the client.''

CBS chairman Carl Taylor, who last month scooped the Co-operative Business New Zealand's Leader of the Year award, said it was a "promising start''.

"We're only at the start of our mission to make the CBS Co-operative a large organisation, delivering better purchasing power, benefits and profit distributions to members,'' he said.

brent.melville@odt.co.nz

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