Boral ordered to pay $4.8m to Wagners in cement dispute

Boral has been ordered to pay Queensland-based construction kings Wagners $4.8m in a long-running complex contractual dispute over cement prices.

Wagners Transport

Boral has been ordered to pay Queensland-based construction kings Wagners $4.8m in a long-running complex contractual dispute over cement prices.

The win for the Toowoomba-based family, which owns the Wellcamp Airport, came after it successfully challenged an earlier Queensland Supreme Court judgment that it must meet lower prices offered by a competitor in the market to supply cement to Boral.

Wagners took a financial hit after suspending supplies and launching legal action against its biggest cement customer over a pricing dispute.

It accused Boral of trying to force down contract prices after the construction materials giant said it had been offered cheaper supplies by Cement Australia, a 50-50 joint venture between Swiss supplier Holcim and HeidelbergCement’s Hanson.

The latest ruling by the Queensland Court of Appeal followed a judgment in January that overturned a decision in May last year by judge John Bond mostly in favour of Boral, including that Wagners should refund Boral $2.48m for overpayments.

Under the agreement, Wag­ners sold cement to Boral, which was required to purchase a minimum amount each year for a predetermined price.

But Boral could issue a pricing notice to cut the amount paid under the agreement, allowing Wagners to either reduce the price or match the competing offer.

Wagners disputed whether the lower price was “bona fide” and suspended cement supplies to Boral for six months at a cost of $20m while waiting for a court ruling on the dispute.

In October it resumed deliveries to Boral, which takes about 40 per cent of its cement. Boral will continue buying cement from Wagners until 2031.

The Court of Appeal ordered Boral to pay Wagners a sum of $4.67m plus interest of $169,499. Boral also has been ordered to pay 60 per cent of Wagners’ legal costs.

Shares in the cement and construction company operated by the Wagner family fell almost 30 per cent last year amid uncertainty over the legal battle.

The shares — largely held by brothers Denis, John, Neill and Joe — have rebounded 23 per cent so far this year as big infrastructure projects boosted profits. The stock closed up 3 per cent at $2.38 on Friday.

Wagners, which makes concrete and composite materials for everything from roads and bridges to light poles and warehouses, posted a 14 per cent increase in profit to $1.4m in the six months to the end of December.

Revenue increased 27 per cent to $155m as the company sold more concrete, cement and quarry materials.

Wagners' concrete operations.

The company said all levels of government in Australia were starting to develop plans to rescue the economy, primarily by ­increasing government spending on infrastructure.

Denis Wagner said large infrastructure and resources projects including Inland Rail and Cross River Rail were already boosting demand for construction materials.

Wagners was supplying precast concrete tunnel segments to Cross River Rail valued at $40m, while a $35m quarry operation and haulage agreement had been reached with the Carmichael Mine Project in Queensland valued at more than $35m.