SYDNEY, Nov 4 (Reuters) - Australian building materials group James Hardie Industries NV plans to suspend production at two plants in the United States due to continued deterioration in the U.S. housing market, the company said on Tuesday.
James Hardie, which earns about 80 percent of its profits from the United States, said production at its plants in Fontana, California and in Summerville, South Carolina would be halted.
'Today's decision is extremely difficult because it affects 127 of our employees, Chief Executive Officer Louis Gries said in the statement.
'However, it is no reflection on their achievements and dedication. It is a reflection of the severe housing market downturn,' he added.
Analysts have warned that the downturn in the U.S. will bite not only because fewer homes are being built, but because builders might switch to cheaper home-siding, like wood or vinyl, bringing profit margins down.
James Hardie is also fighting tough conditions in its home markets of Australia and New Zealand, where slower economic growth is hurting housing demand.
The group's shares are down 25.3 percent so far this year, compared to a 33 percent fall in the benchmark S&P/ASX 200 index .
($1=A$1.47)
(Reporting by James Thornhill and Denny Thomas) Keywords: JAMESHARDIE/ (james.thornhill@reuters.com; +61-2-9373-1816; Reuters Messaging: james.thornhill.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
James Hardie, which earns about 80 percent of its profits from the United States, said production at its plants in Fontana, California and in Summerville, South Carolina would be halted.
'Today's decision is extremely difficult because it affects 127 of our employees, Chief Executive Officer Louis Gries said in the statement.
'However, it is no reflection on their achievements and dedication. It is a reflection of the severe housing market downturn,' he added.
Analysts have warned that the downturn in the U.S. will bite not only because fewer homes are being built, but because builders might switch to cheaper home-siding, like wood or vinyl, bringing profit margins down.
James Hardie is also fighting tough conditions in its home markets of Australia and New Zealand, where slower economic growth is hurting housing demand.
The group's shares are down 25.3 percent so far this year, compared to a 33 percent fall in the benchmark S&P/ASX 200 index .
($1=A$1.47)
(Reporting by James Thornhill and Denny Thomas) Keywords: JAMESHARDIE/ (james.thornhill@reuters.com; +61-2-9373-1816; Reuters Messaging: james.thornhill.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.