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CAB Audited Glenvale Publications and Australian Hardware Journal are pleased to provide the articles contained in this publication to keep its subscribers up to date on issues which may be relevant to their businesses. This publication is supplied strictly on the condition that Glenvale Publications and Australian Hardware Journal, its employees, agents, authors, editors and consultants are not responsible for any deficiency, error, omission or mistake contained in this publication, and Glenvale Publications and Australian Hardware Journal, its employees, agents, authors, editors and consultants hereby expressly disclaim all liability of whatsoever nature to any person who may rely on the contents of this publication in whole or part. Published by GLENVALE PUBLICATIONS A.B.N. 31 218 591 688 11 Rushdale Street, Knoxfield Victoria 3180 Phone: (03) 9544 2233 Editor: Christine Bannister Phone: (03) 9544 2233 Email: Journalists: John Power Hartley Henderson Jamie Della Online Communications & Production: Justin Carroll Email: ADVERTISING Harry Rabiee Email: Phone: (03) 9544 2233 Mobile: 0403 000 444 ACCOUNTS Melissa Graydon Email: SUBSCRIPTIONS Melissa Graydon $93.00 – 12 issues ART AND PRODUCTION Justin Carroll PRINTING Southern Impact Pty Ltd 181 Forster Rd, Mount Waverley VIC 3149 Phone: (03) 8796 7000 2022 still remains a year of hope and recovery for most hardware independents despite the unfortunate turn of events locally and overseas. No doubt many business owners are not only concerned about the humanitarian and economic costs of war as Russia continues to invade Ukraine, but also the devastating floods that have wreaked havoc throughout Queensland and New South Wales. I am sure all of us within the industry are thinking of those stores and suppliers affected by the floods. Considering many businesses are still struggling with staffing and supply issues as the effect of COVID continues, to then be impacted by a natural disaster might be enough for any business to tip over. While I agree the pandemic has increased our resilience and ability to pivot and innovate on a whim to ensure economic survival, after seeing the damage and havoc the floods have inflicted on such a sparse area, I can only applaud those affected within the industry for getting on with the job once again. Thankfully the Federal Government has already issued several assistance packages for businesses affected by the floods. Australian Small Business and Family Enterprise Ombudsman Bruce Billson has also stepped up for those affected and will soon launch the Small Business Natural Disaster Preparedness and Resilience Inquiry in an effort to better target and assist small businesses in proactively preparing for natural disasters. While Queensland and New South Wales residents weigh up the economic and personal costs of the recent floods on a national scale, on a global scale the industry is also weighing up the costs from the Russian-Ukraine conflict – especially when it comes to importing Engineered Wood Products (EWPs), particularly Laminated Veneer Lumber (LVL) imports. As reported in AHJ’s recent Timber/Timber Flooring and Decking feature, Russia’s timber supply was once a beacon of hope for timber supplies in the wake of the timber crisis. Supply constraints were a pressing topic at the recent Australian Timber Importers Federation (ATIF) meeting recently held in Melbourne. During the meeting, the ATIF board resolved to write to the Federal Minister for Trade to raise concerns regarding the potential negative impacts on the Australian timber supply chain, as well as building and construction activity, due to trade sanctions imposed on Russia. When considering the supply of EWPs across Australia from Russian manufacturers is in the range of 40 per cent to 50 per cent of total domestic consumption, there is no doubt Australian sanctions on Russian suppliers will adversely affect the Australian economy. The federation has also contended that the Commonwealth Government should take these facts and associated risks into consideration in their formulation of Australia’s foreign and trade policy approach to the Russia-Ukraine situation. While most within the timber industry would support the economic stance the ATIF has on sanctions placed on Russian suppliers, this is also an issue that no doubt heavily conflicts with the moral stance most Australians also have on Russia’s invasion of Ukraine. For the sake of Ukraine’s people, let us hope peace is not too far away. Coming up… AHJ’s popular Bathroom and Plumbing feature is set to return to the April edition as well as full coverage of the Paint Place conference to be held in Townsville in March. Christine Bannister - Editor

DEPARTMENTS Newsmakers Features 6 Viewpoint 8 Retail Focus 12 Behind the Counter 14 US News 16 NZ News 18 Timber Update 40 News 44 What’s New 26 W orkwear & Personal Protective Equipment Respiratory products have remained a popular and crucial part of everyday life for Australians despite the Omicron wave beginning to lose momentum and mask-wearing mandates easing across most states. 33 Building Materials As Australia emerges from COVID-19, new trends in home design and function are emerging. In this report, see how new home design trends are reflected in higher demand for on-trend building materials and hardware products. 40 B unnings announces halfyear results 41 B uilding approvals fall sharply during Omicron 42 C onstruction recovers after Christmas fall About the Cover STIHL are excited to announce that the RMA 510 V battery mower has been awarded the best performer in the latest CHOICE test for battery mowers. The trusted consumer advocacy group tested the best-selling STIHL mower against strict criteria including actual battery life, ease-of-use, mulching capacity and cutting performance. RMA 510 V recommended by choice Awarded best battery mower ƒ Vol.137 No.3 Mar 2022 SINCE 1886 Print Post Approved PP100007331 43 8 26 35

Business: Crameri’s Mitre 10 Owners: Bernie & Stewart Crameri Location: Maryborough, VIC Buying Group: Independent Hardware Group (IHG) Crameri’s Mitre 10 built for prosperity When Elias Crameri first established the Crameri’s business in country Victoria in 1878 - upon arriving from Switzerland - he never could have guessed that 144 years on the thriving regional business would expand its operations to the innercity suburb of South Melbourne. The family’s long-standing Maryborough store, Crameri’s Mitre 10, is located 170 kilometres northwest of Melbourne, today owned and run by Bernie Crameri and son Stewart who work tirelessly to create the best possible in-store experience for their customers. The store now prospers as a multi-faceted family business, built on outstanding customer service as well as a wide range of hardware, DIY, trade and rural lines, with bicycle parts and a liquor licence recently added to its list of outstanding qualities. The business’ long-running success prompted the family to take on a new metro venture with the recent purchase of a small-format hardware store in South Melbourne. Looking at the Maryborough store today, it is hard to imagine that the business was born from its humble beginnings as a wood-cutting, chaff-milling and merchant business, with a touch of gold-mining thrown in as this was the reason why the 8 HARDWAREJOURNAL.COM.AU | MAR '22 Bernie Crameri (Owner), Bob Arnold (Store Manager), Stewart Crameri (Operations Manager) Dan Regan (Administration Manager) and James Crameri have worked well together to evolve the store over many decades.

store was originally established in Maryborough. The business has seen many generations involved in the business. Elias’ son, Joseph Crameri, took over from his father in 1948, his son Elias (Leo) took charge in the 1960s, and current owner Bernie started with the business in 1975. It was about three years ago when Bernie’s son Stewart came on board finding his way back to the business after playing professional football for many years. Stewart’s wife Jesse and Bernie’s wife Mandy also remain an integral part of the business, while Bernie’s brother James manages the business’ nearby factory that continues to manufacture chaff to this day and supply produce stores throughout Melbourne. Today the business still features many of its original attributes including the chaffer’s factory and the original family home, a five-bedroom, two-story terrace house, located beside the Maryborough store. Business evolvement While Crameri’s Mitre 10 has always primarily been a rural business, several years ago a 15-year drought hit the region and affected the business for a long time. It was then that Bernie and Stewart decided it was time to futureproof the business by leaning on the support and resources of a hardware banner group. In November 2006 the family joined Home Timber & Hardware and their hardware journey began. The store evolved substantially once again in 2016, rebranding to Mitre 10 under the group’s Sapphire transformation program and undertaking a total re-lay and review of its range and offer. However, the renovations did not stop there with another significant upgrade to the store’s trade centre completed during the COVID pandemic when Stewart saw a need in the local market for a more professional offer within the timber/trade space. According to Stewart, it was time for the timber/trade centre to work as one so the businesses would complement each other instead of working as two separate entities. “As soon as I began working back at the store three years ago, we identified that the timber/trade business was not doing as well as it should. Although it took us over two years to get the plans underway for a new trade centre to be built, it was all completed about 10 months ago and now looks incredible,” he said. Trade centre upgrade Although Bernie and Stewart faced some decent challenges while building the new trade centre throughout the pandemic, Stewart said the timing worked out quite well because most of the centre’s redevelopments took place in-between lockdowns. “After the first lockdown came to an end last year we quickly sprang into action and undertook the re-lay before the second wave came. Although the timing of the redevelopment worked out well it was 12 months of hard work as we had to work through two planning permits, two building permits, and two years of VCAT. Bernie had five operations and I also welcomed my second baby into the world – it was a very busy time to say the least,” he said. “There was also the issue of navigating staffing issues throughout the lockdowns, RETAIL FOCUS Crameri’s Mitre 10 evolved substantially in 2016 after it undertook a total re-lay and review of its range and offer.

because there was such an increase in trade combined with staff needing to isolate. Somehow, we managed to put on 15 staff throughout this time as well as deal with everything else,” Stewart said. Once completed the new trade centre included a full extension and replacement of the former shed, a convenient drive-through area, as well as a re-lay to half of the store. “Our biggest challenge was making sure that all of the stock within the new shed flowed really well and that our customers found it easy to access everything they needed so they could be in and out as quickly as possible. We are so proud of this achievement. Although our staff were hesitant on the extensive changes at first, they now love it and are enjoying working within the new centre,” he said. Already the new-look trade centre has changed the store’s customer ratio from 90 per cent retail and ten per cent trade, to 60 per cent retail and 40 per cent trade, as local builders and construction contractors see the 3500 square metre store as their ‘go-to’ for all of their supply needs. Mighty Rewards Program As a strong believer in the benefits of the Mitre 10 ‘Mighty Rewards’ loyalty program, Crameri’s Mitre 10 now has 86 per cent of Maryborough residents signed up as members to the program. The team also continue to trial new ways to expand the program including Bernie and Stewart’s latest promotion that targets farmers via the store’s Combined Rural Traders (CRT) business. Using a 12-month planner to drive supplier-funded Mighty Rewards campaigns throughout the year, the store’s extensive planning and marketing campaigns continue to be a huge success. “We will now introduce this program to our local farmers so they can use this within the rural side of the business. It seems the younger farmers are happy to take this on and buy their merchandise through us so they can utilise the Mighty Rewards program. When a customer spends through Mighty Rewards, they accumulate three per cent of the total amount through the program which goes towards discounting their next purchase in-store. Mitre 10 is also running a promotion where one loyalty customer can win one million bonus points as well as weekly and daily prizes which is fantastic at driving interest in the program,” Bernie said. Local demographics The town of Maryborough continues to experience a boom with many people from Melbourne moving to the area since the pandemic. Bernie also believes that the re-vamped store will hold the business in good stead as the town’s population continues to swell. “Once you have been in business for a long time and set your business up properly through the Sapphire experience, it attracts people to the store. IHG have assisted us in setting everything up really well, including our stock, staff and pricing. We have many competitors in this area so we are really appreciative that we can lean on the national resources of IHG to help us continually grow and evolve,” Bernie said. Since the Sapphire upgrade, the store has tapped into servicing large building contractors working at the local hospital and art gallery, according to Stewart. “The bigger contractors all come to us first because they know the brand and they want to be looked after with the pricing. They want to do business with people who can give them the right paperwork and all make it work seamlessly for them,” Stewart said. When asked what Bernie believes makes the store stand out from its competitors, he said this is a question he asks himself on a daily basis. “During a recent staff meeting I said the number one thing you need to do when a customer walks into the store is put your hand up and say hello. This is the one thing we have cemented into the store’s culture for the last 50-years – just say hello to customers. Customer service and the customer’s experience in-store are equally as important. This combined with our ‘shopper led’ range and pricing allows us to remain highly competitive,” he said. “What has happened throughout the COVID period is a lot of customers who would usually go to Bunnings reverted to their local Mitre 10 store and once they re-visited the store, they realised just how competitive we were, and howmuch they enjoyed the experience.” “We cannot rest on our laurels though and we always need to make sure that the store is tidy and neat and the range is constantly up to date. If we get these things right on a daily basis then we are doing well,” Bernie added. Inner-city convenience offer While IHG has remained instrumental in supporting Crameri’s Mitre 10 from (L-R) - James Di Santo (Hardware Dept), Bob Arnold (Store Manager), Stewart Crameri (Operations Manager), Dan Regan (Administration Manager), and James Crameri.

MAR '22 | HARDWAREJOURNAL.COM.AU 11 when it first joined a banner group right through to the store’s Sapphire upgrade, Stewart said IHG’s support has also been crucial as they take on a new small-format hardware venture in the thriving inner-city suburb of South Melbourne. “Being a part of the IHG group is like having 40 extra staff because you have access to a big support team and they just help you the whole time. Having this support makes such a big difference as we take on the South Melbourne convenience store and we are considering developing more stores in the future because we have IHG’s backing. Thankfully we have continued to trade within our convenience offer since purchasing the store from the former owners. We are just slowly transitioning a few things but the big re-lay will happen at the beginning of March when we brand it to Mitre 10 and transform the customer offer,” Bernie said. Hardware convenience stores are the way of the future, according to Bernie, with his goal being to run the South Melbourne business remotely via cutting-edge software programs. “At the moment the store is an experiment for us and IHG, but together we believe we can do it because it is a part of the hardware sector that has such potential. Incredibly the store has already been around for 23 years and the former owners are very well known to the local community because of their outstanding service,” he said. “The store will focus predominantly on local DIYers – those living in apartments, smaller houses nearby and the local hotels and restaurants – while also having a small trade offer,” Bernie said. Although the South Melbourne convenience store will offer primarily hardware products, Stewart said the store will feature a variety of top-ups for trades as well. “If a builder is working nearby and they are short of a few products the South Melbourne store will offer a selection of extra products for trades as well as maintenance products required by local hotels.” “When driving around Melbourne I have already noticed there are a lot of metro Woolworths stores on the city corners. It is almost like we have gone back in time except where milk bars once were we have metro stores, just with a better range and pricing – this is also why we want to create the same offer with Mitre 10 stores. It is an exciting initiative and we are confident it will be a great fit in the area,” Stewart said. Future plans It has already been an exciting year for Crameri’s Mitre 10 Maryborough after being awarded IHG’s Store of the Year for the VIC/TAS region and is now in the running for national recognition, to be announced mid-March. Bernie said for him and his son it is not about winning awards but more about growing a business that evolves with its customers and will continue to stand the test of time. “While I know we are going pretty well it is also such a morale boost for the staff when an award nomination comes up. We have an outstanding team behind us who help to make the business what it is today. Just some of this team includes our Hardware Manager Bob Arnold, Weekend Manager Julie Albins, along with Administration Manager Dan Regan. Throughout the store our team is outstanding with Howard Payne, Elise Thornton and Katrina Lee in the garden, Jesse Grogan in paint, Paula Gabriel in hardware and Andrew Hubble and Paul Rossi who manage our timber yard. We are a ‘people business’ first and foremost,” he said. “Most of the time it is those one per cent improvements that make a big difference when it comes to growing the business, and these people all play a key role in our growth. It is so fantastic telling staff we have won a state award and to be nominated for a national award means everything we are doing in-store is right up there – which is what we will continue to do for many years to come,” Bernie said. A draft concept of what the family's new small-format store will look like opening in 2022 and located on South Melbourne's busy Coventry Street. Crameri’s Mitre 10 owner, Bernie Crameri believes customers are naturally attracted to the store now that the business is set up properly through the Sapphire upgrade program. RETAIL FOCUS

In the edition of Behind the Counter, Australian Small Business and Family Enterprise Ombudsman, Bruce Billson reveals his plans to assist SME’s dealing with record-breaking floods in Queensland and New South Wales, along with the after-math of the pandemic. Ombudsman’s inquiry navigates road to resilience The Small Business Natural Disaster Preparedness and Resilience Inquiry is now well underway with my office expected to deliver the final report to the Minister for Employment, Workforce, Skills, Small and Family Business the Hon Stuart Robert MP within weeks. As we finalise work on this inquiry, many small and family businesses have been contending with record-breaking floods, particularly along the east-coast of Australia. Bushfires have also ravaged Western Australia in recent weeks. This, on top of the challenges faced during the pandemic over the past two years is yet another unwelcome headwind for many small businesses, and a potentially devastating blow for some. Feedback sessions In the past few weeks I have travelled extensively to hear from small and family businesses impacted by natural disasters during 38 feedback sessions across five states. Their stories have been inspiring as well as harrowing with many pointing to valuable insights and lived experiences, and I thank them all for coming along and speaking candidly. In addition, there were over 2,000 small and family businesses who took the time to complete our online survey and we value and appreciate this contribution. Many have shared excellent ideas about how best the government can support smaller businesses to prepare for, contend with and recover from an unavoidable natural disaster. As we finalise the Small Business Natural Disaster Preparedness and Resilience Inquiry, we will incorporate these learnings and make recommendations to improve information and engagement programs with the aim of better targeting and assisting small businesses in proactively preparing for natural disasters. We have heard time and time again that local engagement, leadership and decision making, informed by local knowledge and community connectedness is critical. More often than not, it is the local business communities who are experienced in natural disasters that affect their region, who can best guide and support their business peers. This local leadership needs more support and access to resources if it is to best assist small business owners who are working to get back on their feet. In many cases, local critical infrastructure is not fit for purpose in the event of a natural disaster. More can be done to ensure essential infrastructure is ‘hardened’ to remain intact and functioning. A recent Deloitte Access Economics report found that 97 per cent of government disaster-related expenditure was used for repairs and recovery while just three per cent was used on disasterpreparation and mitigation. Our inquiry will make recommendations about the types of proactive supports that could be targeted to small businesses and how to achieve the best outcomes from those resources. Mental health support Given the additional pressures on small businesses over the past two years and as many now tackle natural disasters, it is understandable that the issue of looking after the mental health of businesses owners, and their staff, has been raised repeatedly at our feedback sessions. Natural disasters and ongoing pandemic-related challenges such as supply chain disruptions have taken a heavy toll on most small business owners. That is why I commended the Australian Government’s commitment to renew funding for a critical mental health program tailored to small business owners. An additional $4.6 million in funding will ensure Beyond Blue’s New Access for Small Business Owners program can expand and continue to assist small business owners who need mental health support. It is vital that small business owners reach out for help if they are not coping. Beyond Blue’s New Access for Small Business Owners is a tailored, evidencebased program, providing free one-onone resilience coaching sessions to small business owners via telehealth. It is critical that small business owners know this support is available and are

MAR '22 | HARDWAREJOURNAL.COM.AU 13 confident in reaching out if help is needed. Small business owners who look after their mental health can also help their staff to do the same if the need arises. For more information on the New Access program, small business owners are being invited to call 1300 945 301 or visit the Beyond Blue website at: Small businesses battle COVID’s after effects It is so inspiring to see small and family businesses powering on despite still facing heavy headwinds went it comes to foot-traffic, dependable supplychains, team availability, predictable movement opportunities and personto-person interactions. Despite their on-going strength, there is no doubt business owners are fatigued with additional working hours adding to the significant responsibilities of business ownership to plug team gaps and attend to persistent pandemic-inspired demands. Ongoing challenges of having staff in isolation and needing to navigate differing rules and impacts of supply chain disruptions have added to a sharp dip in consumer confidence. While January is typically a time of upbeat sentiment – economists believe consumers have been spooked by rising Omicron cases across Australia. Data reflects some sectors describing a repeat of near-lockdown conditions and this accords with what impacted small and family businesses are telling us they are experiencing. Despite the bumpy start to the year, businesses are reporting more encouraging conditions and optimism on the year ahead and now want to know skills, supplies and finance will be available to support their growth and ambition. I have been very pleased to bring together ministers and government agencies to hear first-hand from small business representative organisations about what they are experiencing, what they need to be able to continue powering the recovery and what policy settings will be most helpful. Critical Industries Supply Chain Forum My office has been co-facilitating regular Critical Industries Supply Chain Forum meetings, where a range of practical solutions to the issues small businesses are facing have been up for discussion. Businesses have been vocal in calling for nationally-consistent requirements across states and territories – particularly for those businesses in critical supply chains in relation to testing and isolation. Recent changes to testing and isolation rules have been welcomed, with participants recognising that these rules will continue to evolve and be recalibrated for smaller workplaces, with advocates urging broader industry application. Participants are united in urging policymakers to understand the interconnectedness and co-dependencies of supply chains and seek to preserve and support workforce availability. Clear communication was called for to ensure smaller employers understand and can implement what their obligations are, including clarity over Occupational Health and Safety requirements. Industry associations have a key role to play here in keeping their members up to date with relevant state guidelines. Of course, a nationally consistent unified approach to testing and isolation is preferred. Affordable and timely access to rapid antigen tests has been very challenging for smaller workplaces without the capacity to stockpile. While recent rule changes have helped reduce pressure on available stocks, measures to ensure smaller employers can obtain rapid antigen tests so they can comply with testing and isolation rules and to protect the workforce and community have been called for. Smaller workplaces need to be able to access the tools that policymakers deem are central to their ongoing viable operations. This engagement will continue as the virus evolves, along with the implications for the small business community and will no doubt require a revisiting and recalibration of solutions and support. For now, I have been encouraged by the Australian Government’s interest in hearing the views of small business and the receptiveness of ministers and senior officials to collecting this valuable field evidence to be utilised in supporting small and family businesses throughout the coming months. BEHIND THE COUNTER Australian Small Business and Family Enterprise Ombudsman, Bruce Billson (third from the left) recently held 38 feedback sessions across five states from small business owners affected by natural disasters.

US NEWS Several major big-box retailers recently released financial results outlining their performances in the last quarter of the fiscal year and fiscal year 2021, with all reporting substantial gains in revenues as homeowners continue to invest in their home and millennials drive home ownership. Ace Hardware Ace Hardware Corporation recorded fourth quarter 2021 revenues of $2.1 billion, an increase of $14.2 million or 0.7 percent from the fourth quarter of 2020. Full-year revenues were a record $8.6 billion, an increase of $831.5 million or 10.7 per cent from 2020 revenue (this is also an increase of $931.4 million or 12.2 per cent excluding the 53rd week in fiscal 2020). Net income for fiscal 2021 was $330 million an increase of $13.1 million from fiscal 2020. Fourth-quarter revenues increased $114.1 million, or 5.8 per cent from the fourth quarter of 2020 - excluding the 53rd week in fiscal 2020. Net income was $9.3 million for the fourth quarter of 2021, a decrease of $33.8 million from the fourth quarter of 2020. Ace Hardware President and Chief Executive Officer John Venhuizen said that in comparison to 2019, total revenue increased 38.6 per cent while net income was up 129.8 per cent. “This transformational surge in business is driven by two-year stacked comp growth of 34.4 per cent, digital growth of 279 per cent, and the opening of 407 new stores globally over two years. My sincere thanks and gratitude to our helpful heroes to whom all the credit goes for serving so well in a very difficult environment,” Mr Venhuizen said. The Home Depot The Home Depot’s final results have seen reported sales of $35.7 billion, an increase of $3.5 billion, or 10.7 per cent from the fourth quarter of fiscal 2020. Comparable sales for the fourth quarter of fiscal 2021 increased 8.1 per cent and comparable sales in the US increased 7.6 per cent. Net earnings were $3.4 billion or $3.21 per diluted share, up from $2.9 billion, or $2.65 per diluted share from the previous year. Diluted earnings per share increased 21.1 per cent from 2020. Fiscal year 2021 sales were $151.2 billion up 14.4 per cent from 11.4 per cent and comparable sales in the US jumped 10.7 per cent. In 2021 net earnings reached $16.4 billion, up from $12.9 billion in 2020. The Home Depot Chairman and Chief Executive Officer Craig Menear said Fiscal 2021 was another record year for The Home Depot. “We achieved a milestone of over $150 billion in sales. Our ability to grow the business by over $40 billion in the last two years is a testament to investments we have made in the business, our ability to execute with agility and our associates’ relentless focus on our customers. I would like to thank all of our associates as well as our supplier partners, for their hard work and dedication to serving our customers, communities and each other,” Mr Menear said. Lowe’s Lowe's Companies Inc. recently reported net earnings of $1.2 billion and diluted earnings per share (EPS) of $1.78 for the quarter ended January 28, 2022 up from net earnings of $978 million and diluted EPS of $1.32 in the fourth quarter of 2020. Total sales for the fourth quarter were $21.3 billion compared to $20.3 billion in the fourth quarter of 2020, with comparable sales increasing five per cent. Comparable sales for the US home improvement business increased 5.1 per cent for the fourth quarter with procustomer sales increasing by 23 per cent. Lowe's Chairman, President and Chief Executive Officer Marvin R. Ellison said Lowes delivered yet another year of outstanding performance in 2021 as it gained market share across DIY and Pro through its ‘Total Home’ strategy. Big Boxes release financial results

“I would like to thank our front-line associates for their tremendous efforts this year. In 2021 we increased comparable sales by 6.9 per cent while generating over 170 basis points of operating margin improvement, with our relentless focus on productivity and enhanced pricing strategies. We remain confident in the long-term strength of the home improvement market, and our ability to expand operating margin,” Mr Ellison said. Lowes recently awarded a discretionary year-end bonus of $265 million to front-line associates in recognition of their hard work during the pandemic in 2021. All Lowe's stores earned a Winning Together quarterly profitsharing bonus resulting in an expected total payout of $94 million to frontline hourly associates for the eighth consecutive quarter. This payment is $24 million above the target level. Lowes reimagines DIY with the launch of DIY-U by Lowes As homeowners continue to invest in home improvement and millennials drive homeownership rates to 37 per cent, a new generation of DIYers are seeking a transformation in how-to learning and experiences. In an effort to engage this new wave of home improvers, Lowe's recently unveiled ‘DIY-U by Lowe's’ – an innovative new DIY ecosystem that brings live, on-demand and home improvement skill-building into a modern and personalised era. Inspired by the digital instructor community boom and rise in immersive at-home learning, DIY-U by Lowe's is a one-stop-shop for how-to project workshops from one of the most trusted home improvement brands. DIYers of all skill levels were invited to register from February 28 for all-new limited-seat monthly livestreams and relaunched in-store Lowe's kids and adult workshops at Lowe's will offer three types of experiences that allow consumers to participate how and where they want each month including: two livestreams for up to 1,000 registrants each, an in-person kids workshop helping children ages 5-12 learn DIY skills and techniques that instil confidence, and two adult in-person workshops in all stores nationwide. Each workshop will be hosted by Lowe's Red Vest store associates who will bring years of expertise and knowledge to every project. Lowe's new virtual workshop experiences will also allow customers to shop and add supplies to their cart in real-time and receive live answers to project questions from Lowe's Red Vest experts. As new generations and new customers embrace DIY, Lowes has recognised how valuable Red Vest store associates can be in providing project ‘how to’ help and expertise, Lowe's Executive Vice President, Chief Brand and Marketing Officer MarisaThalberg said recently. "With the launch of DIY-U by Lowe's, we are making sure that support and a DIY community is available where, when and how people most want it: in-store, live and interactive online, or online on-demand. We believe this is going to be the ultimate DIY resource that is informative, fun and motivational for everyone,” Ms Thalberg said. When designing the current schedule and format of DIY-U, Lowe's listened to consumer insights that found flexibility, topic relevance and expert connection were most important, especially among millennial consumers. Both workshop formats will open for registration the first of each month and feature relevant, seasonal-inspired themes, creating a natural tie to what customers are tackling around their own home throughout the year. The initial March schedule includes: A bathroom refresh you can do yourself workshop (how to install a vanity), kids workshop: shoot the moon (build a game to compete for the highest score) and make your home office work for you workshop (how to wallpaper a room). This step is the first of many upcoming DIY-U by Lowe's releases as Lowe's looks to become the social community for DIYers. With planned developments ranging from sharing virtual high fives with fellow workshop participants, to earning badges for project completion, Lowe's hopes to gamify DIY with a new level of peer support to create a space where homeowners and families can share their passions in a place that makes DIY fun, attainable and achievable. MAR '22 | HARDWAREJOURNAL.COM.AU 15

NZ NEWS Arguments over the cost of building new homes have begun after competition advocate, Tex Edwards recently made a submission to the Commerce Commission pointing out that massive economies are possible. Amarket study into the building industry is currently being carried out by the watchdog after it voiced concerns that there is a poor choice of suppliers, some of which may be using “loyalty payments and rebates” to restrict competition for some key products, according to a recent report. In recent a MonopolyWatch submission, Mr Edwards said its research found that the cost of building “entry level social housing” ran to about $3800 per square metre in New Zealand, when the cost should be sitting at $1200/square-metre according to international best practice. “Well-capitalised, institutional international scalable-sized integrated builders”, that could be wholly or partly owned by the Government-owned could bring down costs, according to the Monopoly Watch submission. Mr Edwards said in the report that a “large scalable player” established to build about 3000 to 5000 properties a year could roll-back the “margin-onmargin culture and resolve the ‘death by a thousand cuts’ conundrum” that small builders suffered. The construction industry’s ability to deliver affordable housing fell apart in the late 1980s and early 1990s, when builders shifted to “bespoke and premium builds. New Zealand has got the best tradespeople in the world but we are not using them properly,” he said in the report. The Monopoly Watch’s submission also pointed out that “an expert witness from a recently departed large building materials multinational” wanted to give evidence to the commission on problems and fixes. “A series of international associates” could share data and propose world-best solutions, it said in the report. According to Stats NZ the price of new homes grew 16 per cent last year, excluding the land they were built on, partly due to product and labour shortages during construction. CoreLogic has since forecast in the report that construction costs could increase 10 per cent this year. However, submissions by building materials’ suppliers to the commission’s market study say a narrow focus on products themselves would largely be a waste of time, with Fletcher Building reporting that the markets for building supplies were competitive and that competition was “generally working well for consumers”. New Zealanders’ “preference for bespoke houses”, the fragmented nature of the building and renovating sector, and an “understandably riskaverse approach” to building-product consents were all affecting construction costs, it said. “The commission should carefully examine whether the regulatory environment is as efficient and effective as it could be for a country of New Zealand’s size and demography,” Fletcher Building said in the report. Fletcher Building also reported in the submission that the commission’s proposed focus on a limited selection of materials such as flooring and roofing products, wallboards, insulation and windows meant less than eight per cent of the cost of building a new house would be in the scope of the review. The Master Builders Association told the commission that about 70 per cent of all building products were either imported or required “some component of imported product”, showing the heavy reliance the construction industry has on overseas markets. Mr Edwards said in the report that the Monopoly Watch’s submission was designed to set out the problems and opportunities in the sector and that the commission should recommend that manufacturers of building products, including wall board, did not also own the companies that distributed them. Home-building costs triple

MAR '22 | HARDWAREJOURNAL.COM.AU 17 New home consents in New Zealand recently fell 6.3 per cent to 2,833 in January compared to the same time last year, according to a recent mpamag report. Despite the substantial fall, it is still considered to be the second busiest January month of all time, according to new data from Stats NZ. Stats NZ Construction Statistics Manager, Michael Heslop said New Zealand saw 3,025 new homes built in January 2021 making it the busiest January month since March 1991 when the series began. “The January 2021 figure was the highest on record for a January month and despite the comparative fall, the 2022 figure is still the second-highest for a January month in the 57-year time series. We typically see fewer building consents issued in January than other months, partly due to public holidays and annual leave,” Mr Heslop said. Although residential buildings increased 3.9 per cent to $1.165 billion, commercial buildings had an entirely different outcome altogether, according to the report, plunging by 7.3 per cent to $447 million in the year to January 2022. This was primarily driven by fewer consents for hotels and other short-stay accommodations, educational institutions and office constructions. Stats NZ also reported a 22 per cent increase in the annual number of new homes consented increase to 48,707, with Auckland leading the bunch with 20,321 constructions. The three regions of Waikato, Canterbury and Otago also broke records with 5,135, 7,817, and 2,367 new homes consented, respectively – the highest number for any 12-month period since the series began. 2022 is expected to be another busy year for the New Zealand building industry with post-COVID retrofits for improved building ventilation and creating flexible work and education spaces proving to be a source of work along with demand for climate-adaptive architecture, a recent Architecture and Design report has revealed. Although the industry is expected to remain buoyant, RBA Governor Philip Lowe recently noted that it costs 7.5 per cent more to build a new dwelling than it did 12 months ago primarily due to ongoing supply chain issues. Association of Consulting Architects (ACA) Chief Executive Officer Angelina Pillai agreed, saying that the industry has not yet seen the full extent of what those building material shortages are going to be. “However, we are already experiencing significant price hikes and delays that will have flow-on impacts on projects, programs and budgets,” she said. Architectural practices are now predicting the need to plan for further disruptions with Principal Architect at Sydney-based Carter Williamson Architects, Shaun Carter, pointing out in the report that his building collaborators have been procuring in-demand materials far in advance. “One of our builders, for example, heard that timber was going to be in short supply. He bought every stick of timber required for the job and had it delivered from his reliable supplier.” According to Australian Institute for Landscape Architects (AILA) President Claire Martin, COVID highlighted existing inequities but the recovery could be a game-changer. As architects and landscape architects play a crucial role in getting people safely back to the office, the campus and the city, Ms Martin said in the report that, “[The pandemic] is really f lagging the importance of investing in social infrastructure, with hospitals, aged care facilities, education buildings and civic spaces are getting a boost. Nathalie Ward and John Ilett, Directors of urban design, landscape architecture and architecture practice LatStudios, also predict continued investment in COVID-safe renewal projects in the form of high-quality open spaces. “Universities are building lots of outdoor learning spaces and outdoor recreation spaces. They are trying to attract new students and retain workers,” Ms Ward said in the report. LatStudios clients are currently trialling hybrid work models, with activities shifting between online, on-site, local and international. New home consents fall Architects predict a challenging but busy 2022

TIMBER UPDATE It recently surprised AKD’s Post & Poles General Manager, John Browne that a prospective new customer did not realise AKD’s roundwood products are, of course, locally owned and made. According to Roy Morgan Research, the Australian Made logo is now recognised by 99 per cent of Australians and trusted by 92 per cent. It is currently used by more than 4200 businesses on thousands of products sold all over Australia and the rest of the world. The Australian Made logo is in particularly high demand currently as Australians deal with the impact of COVID and on-going supply issues. In 2021, the brand garnered record levels of interest with monthly applications to use the logo up around 300 per cent compared to pre-COVID rates. AKD Post & Poles businesses are amongst those recent applications and following its approval last month to become an Australian Made Campaign Limited licensee, the AKD Post & Poles businesses can now ensure every customer - and their customers’ customers - know about the local product. AKD’s Post & Pole products are used as rural fencing solutions and also as vineyard posts − in doing this, they protect millions of dollars of livestock, crops and grapevines across Australia. AKD’s two roundwood businesses include AKD Jelfor Timbers in Traralgon and AKD Portland Pine located in Heywood, Victoria. With a combined processing experience of over 87 years, AKD Portland Pine and AKD Jelfor Timbers specialise in the production of round wood products, predominantly for the rural and semi-rural areas of Victoria, South Australia, New South Wales and Western Australia. Both manufacturing businesses also have reliable access to sawn products via their parent company AKD, which is the largest softwood sawmilling company in Australia. It is also unique as it remains a private family-owned Australian company. AKD’s radiata pine post and pole resource comes from sustainably managed plantations from across Victoria and South Australia. The two sites have long-term supply contracts with most major forestry companies for the ongoing supply of raw materials and AKD also owns substantial plantations which can, and do, supply the AKD roundwood manufacturing sites as well. AKD Post & Poles to use green and gold kangaroo 18 HARDWAREJOURNAL.COM.AU | MAR '22

The family home is one of life’s biggest investments and the structure that holds up our homes needs to stand the test of time. Your customers, the builder, doesn’t want call backs and wants peace of mind that the homes they build will perform. AKD Terminator is a reliable Australian structural product that is guaranteed to be effective against termites whilst still being safe for humans and animals. Make sure AKD Terminator is always stocked in your timber section for builders who are increasingly choosing local timber which is termite-resistant. Termite Protection for the Structure of Aussie homes.

TIMBER UPDATE The Australian Timber Importers Federation (ATIF) has written to the Hon Dan Tehan MP, Minister for Trade regarding the potential negative impacts on the Australian timber supply chain and on building and construction activity if trade sanctions are imposed on Russia. At their request, the ATIF has also provided advice to the Treasury on this matter. ATIF General Manager John Halkett said that while the ATIF respects the moral stance that the Commonwealth Government has taken in relation to the current Russia-Ukraine situation, he believes it is pertinent to explain the serious knock-on effects of any trade sanctions against Russian timber product supply chains on the broader construction industry. The ATIF estimates that there will be substantial detrimental consequences, notably on the supply of EngineeredWood Products (EWPs) to building and construction projects if trade sanctions are imposed. “The ATIF estimates that restrictions on timber product imports fromRussia will result in a 10 to 20 per cent reduction on employment across the supply chain. Plus subsequent delays to building activity are also likely to further exacerbate supply difficulties and put upward pressure on product and building prices,” he said. The Australian housing industry will be faced with a significant risk should Russian timber product imports be threatened by trade sanctions, Mr Halkett said. “While the complexity and instability of the political scene in Europe is acknowledged, severe trade sanctions against Russia will result in substantial risks to the Australian housing industry,” Mr Halkett said. A number of ATIF member companies import timber products fromRussia, notably a range of EWPs. Collectively it is estimated that these imports supply somewhere between 40 and 50 per cent of the Australian building market demand. These products comprise of Laminated Veneered Lumber (LVL), including Formwork LVL that is an essential component of all concrete constructions in multi-residential, highrise, commercial buildings and some civil works, and I-Joist beams. LVL is now found in virtually every detached home built in Australia and in many commercial construction projects. Currently, there are no structural alternatives to LVL in any meaningful volume available from other sources, according to the ATIF with Australia constructing around 140,000 detached dwellings in the last 12 months, and this level of activity to expected to continue for at least 18 months. Any sanctions placed on the Russian suppliers at a time of global timber product shortages will adversely affect the Australian economy, according to the ATIF with the federation contending that the Commonwealth Government should take these facts and associated risks into consideration in their formulation of Australia’s foreign and trade policy approach to the Russia-Ukraine situation. A recent Industry Edge report also revealed that Australian imported wood products fromRussia were valued at $80 million - with just $2.6 million imported fromUkraine in 2021, and Russia’s imports to Australia are valued at 30 times that of Ukraine. The pattern of wood products imported from Russia has also changed over recent years according to the report, with imports more than doubling from 2020 driven by what is described as ‘other’ or builder’s wooden posts and beams – essentially structural elements of housing construction. In 2021 Australia’s imports of wood products were valued at $2.726 billion. Russia accounted for 2.9 per cent of this amount while Ukraine accounted for just 0.1 per cent, with likely bans on the importation of Russian wood products expected to be manageable for Australia, albeit not negligible, according to the Industry Edge report. However a Business Insider Australia report has revealed that sanctions could see lumber prices rattled even further because Russia is not only the largest lumber exporter in the world, but its forest-product exports were worth more than $12 billion last year, according to data from Wood Resource Quarterly. Possible Russian trade sanctions worry importers The Ukrainian army preparing to defend itself against Russian invasion. 20 HARDWAREJOURNAL.COM.AU | MAR '22