Construction giant Metricon is holding crisis talks amid cashflow pressures in the building industry as it reels from the ‘sudden and unexpected’ death of its founder.
Mario Biasin, 71, died on Monday, the company confirmed in a statement and added that he had been ‘experiencing mental health issues’.
He had established the company in Melbourne in 1976 and built it into one of the largest home builders in the country – with operations expanding into NSW, Queensland and SA.
Acting Metricon CEO Peter Langfelder thanked those in the industry and wider community for the ‘outpouring of support’ and said the company was not in financial trouble.
‘We are committed to continuing to run the Metricon business as usual,’ Mr Langfelder said.
Metricon founder Mario Baisin (pictured) died on Monday the construction giant confirmed in a statement. He was a passionate AFL and soccer supporter and significantly helped cancer charity Canteen
Metricon is reportedly meeting with major clients on Thursday for crises talks amid soaring costs in the building industry
‘We are very much appreciative of the kind messages of support from our business partners, suppliers, trades, contractors, government agencies and finance partners.’
He urged Metricon’s clients to be patient as the navigate a difficult few weeks.
His comments come after sales staff were reportedly told to increase cash flow by securing more deposits.
Mr Baisin had been a backer of cancer charity Canteen, with CEO Peter Orchard saying his support had helped thousands of families.
He was also a passionate AFL and soccer supporter serving as a director of the Melbourne Victory for 16 years and helping establish the Gold Coast Suns through sponsorship.
While AFL team Essendon will wear black armbands in honour of Mr Baisin at Saturday’s clash against Richmond at the MCG.
Master Builders Victoria boss Rebecca Casson said Metricon ‘is a valued member of the past 29 years and Mario was a good friend of the agency and an exceptionally strong advocate for our industry’.
‘Mario’s commitment and contribution to the residential building industry will always be treasured,’ Housing Industry Association managing director Graham Wolfe said.
Newland Developers director Gideon Kline, whose father George Kline co-founded Metricon and worked with Mr Baisin for decades, said he was a ‘passionate and committed individual’.
It is understood major clients of the builder, including the Victorian government, will meet with company management on Thursday to discuss their projects.
Acting CEO Peter Langfelder (pictured) said it was ‘business as usual’ for the builder
Prices of materials have been rising steadily since the start of the pandemic, but exploded in April and May last year (average prices of commodities – Arcardis statistics)
Metricon employs about 2,500 people Australia-wide and has thousands of projects on its books – being ranked the biggest home builder in the country in 2021.
But the construction industry is battling surging commodity prices and 24 months of intermittent lockdowns which have thrown pre-priced quotes, schedules and the supply chain into disarray.
Internal company memos seen by the Herald Sun raise questions about cashflow and have alerted employees that it’s ‘crunch time’ for unsigned contracts.
The Victorian government alone has $195million worth of projects with Metricon.
Across the country builders are feeling the squeeze, with timber seeing a 21 per cent increase in price in previous 12 months, while steel skyrocketed 45 per cent.
Fittings including plumbing, ceramic, and electrical materials have jumped by about 10 per cent.
In March, Metricon said it was renegotiating fixed-prices contracts in Queensland but quickly reversed the decision.
That same month Queensland builder Condev folded with 18 projects across southeast Queensland and northern NSW under construction.
Melbourne-based builder Probuild entered voluntary administration in 2022 after falling into tens of millions in debt
Co-owner Tracey Marais said the builder had been battered by a ‘perfect storm’ of surging commodity prices, labour shortages, and work disruptions caused by Covid and torrential rains.
When asked if she considered other big builders to also be struggling, Ms Marais said this was definitely the case.
‘I don’t think potentially, I think for sure,’ she said.
Rising costs are also believed to have fueled the collapse of major construction firm ProBuild, as the company owed $14 million to workers for its doomed 443 Queen Street project in Brisbane.
Two Perth construction firms also recently folded – Home Innovation Builders and New Sensation Homes.
Tristan Kirkham, the managing director at New Home Building Brokers said he heard from clients of several different companies who said their builders weren’t getting the job done – but there was a bigger issue at hand.
Mr Kirkham said there had been huge increase on construction costs, which was having a direct impact on tradies.
‘Right now I’m very concerned for the builders, not all of them are dodgy. If we don’t make a change to this industry and how we’re going about it, builders will continue to fall down,’ he told Daily Mail Australia.
Queensland construction giant Condev was smashed by back-to-back issues, including labour shortages, rising material costs, and floods
He said clients were ringing in a panic because they weren’t seeing any progress on construction sites, but he insisted the workers weren’t to blame.
Despite a surge in demand for new homes, construction companies are more likely to be going into administration than any other kind of company.
In the December quarter of last year, 328 construction firms went into administration, compared with 178 in the food and accommodation services sector, Australian Securities and Investments Commission data showed.
Housing Industry Association senior economist Nick Ward said Australia’s apartment building sector had bounced back from the Covid restrictions.
‘Confidence in the market did weaken after the border closures but there early signs that’s come back,’ he told Daily Mail Australia.
Nonetheless, Australia’s construction sector is facing challenges with higher building material costs for steel and timber as a result of Covid supply constraints.
‘In general, the supply of raw materials is a very significant constraint for builders at the moment,’ Mr Ward said.