James Hardie

Changing shareholder perceptions was critical to the share price reflecting the competitive advantages the company had built in global markets.

BRIEF

At the turn of the 21st century James Hardie was still considered a traditional supplier of building materials. *

With fibre cement James Hardie has successfully penetrated markets in the USA, South America and Asia. The intellectual property rights over its product formulas gave the company enormous potential to realise and suggested very large profits could be made.

Unfortunately, the Australian market, which held the majority of Hardie shares, saw the company as a commodity supplier – with the share price held hostage to the cycle of the construction industry.

Hardie had to persuade investors that they were now playing a different game.

SOLUTION

We identified the need to bring James Hardie’s competency in science and intellectual property to the fore and use it to redefine the company.

We explained to the market that Hardie’s advantage came from the intellectual property that created fibre-cement, not the cement. We told the market that the company had a cost structure 30% below the nearest competitors, and pointed out that they were just at the beginning, with only a 3% share of the largest market in the world.

We also stopped talking about building products and started talking about the role of science in management, marketing and manufacturing.

We positioned James Hardie as an owner of intellectual property and explained this story to its domestic investors, freeing it from the Australian construction industry cycle.

We also produced a highly effective communication program to allow Hardie to undertake a very successful duel listing on the New York Stock Exchange.

* This was all well before asbestos compensation claims challenged the provisions of the trust and company statements in relation to the issue.