ACCC won't oppose Borg, CHH Panels proposed acquisition

26 October 2017

The ACCC will not oppose the Borg Group’s (Borg) proposed acquisition of Carter Holt Harvey Pinepanels’ (CHH Panels) Mount Gambier and Oberon particleboard plants.

CHH Panels is a significant supplier of raw particleboard, particleboard flooring and value-added particleboard, and supplies competitors to Borg, including various downstream manufacturers, distributors and wholesalers of particleboard products. The Mount Gambier plant produces raw particleboard, particleboard flooring and low pressure melamine (LPM) commodity particleboard. The Oberon plant produces particleboard flooring.

The ACCC considered the effect of the proposed acquisition on the supply of raw particleboard, value-added particleboard (used in various residential and commercial applications such as cupboards, doors and shelving), and particleboard flooring (such as the products sold under the ‘STRUCTAflor’ brand owned by CHH Panels).

“The ACCC’s review focused on whether Borg would face sufficient competition and would continue to have an incentive to sell raw and value-added particleboard to customers, particularly its downstream competitors,” ACCC Commissioner Roger Featherston said.

“The ACCC spoke to customers, suppliers, and competitors of Borg and CHH Panels. While some parties were opposed, that view was not widespread and several, including some customers, were supportive of the proposed acquisition.”

“Our investigation found that Borg would continue to face competition in the supply of raw and value-added particleboard from other providers. Therefore, we consider the increased scope and vertical integration of Borg's operations will be unlikely to substantially lessen competition,” Mr Featherston said.

Further information is on the ACCC’s public register: The Borg Group - proposed acquisition of CHH Pinepanels Pty Ltd

Background

Borg is primarily a manufacturer of medium density fibreboard (MDF) products and also manufactures and supplies low pressure melamine (LPM) commodity particleboard and decorative particleboard from its plants in New South Wales. While Borg does not currently manufacture raw particleboard it is currently building its own large raw particleboard plant in Oberon.

CHH Panels manufactures raw particleboard, particleboard flooring, LPM commodity particleboard and decorative particleboard from its plants in Mount Gambier (SA), Tumut (NSW), Gympie (QLD) and Oberon (NSW).

Raw particleboard is used for various DIY and shop fitting applications and also as an input in furniture construction and in the manufacture of LPM commodity particleboard and decorative particleboard.

Value-added particleboard is a collective term for LPM commodity particleboard (also known as ‘whiteboard’ or ‘carcass board’) and decorative particleboard. It refers to raw particleboard that has been through an LPM press to set a melamine resin paper using heat and pressure. It is used for a variety of residential and commercial applications including cupboards, doors and shelving.

Particleboard flooring is a “tongue and groove” product that has been developed largely for residential applications. It is primarily used for second storey flooring applications and is sold under various brands including the popular ‘STRUCTAflor’ brand owned by CHH Panels.

 

Release number: 
MR 183/17
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