Consolidation Thinning Out Australia's Building Materials Sector Jun 00

Standard & Poors, June 2000

Abstract
The credit quality of Australia's building materials sector is stabilizing; nevertheless, the cash flow and prudential quality of this sector remain exposed to structural, cyclical, and pricing factors in the medium term. Australian building materials companies continue to operate in a highly competitive pricing environment, influenced by domestic overcapacity in some products, an anticipated slowdown of building activity following the implementation of the Australian goods and services tax in July 2000, and the completion of infrastructure projects related to the Sydney Summer Olympics this year. Global consolidation also is expected to exacerbate the competitive environment in the medium term. Downward ratings adjustments undertaken in 1998 and 1999 foreshadowed the depth of structural change occurring in key building materials markets. The...

Companies mentioned in this report are: Australia (Commonwealth of) (Unsolicited Ratings),CSR Ltd.,Pioneer International Ltd.,Hanson Building Materials Ltd.,Boral Ltd.,City of Sydney

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.

Australia (Commonwealth of) (Unsolicited Ratings),CSR Ltd.,Pioneer International Ltd.,Hanson Building Materials Ltd.,Boral Ltd.,City of Sydney

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