Reliance Worldwide announced plans to close two manufacturing sites in Moorabbin and Braeside, located in the outer suburbs of Melbourne, as well as several smaller facilities, leading to approximately 85 job losses. The plumbing parts manufacturer said the restructuring was necessary due to declining brass volumes in its Australian operations and increased production capacity in North America. The move is expected to deliver a net annual group benefit of US$9 million (A$12.9 million) starting in the 2027 financial year.
Founded in Brisbane but now headquartered in Atlanta, Reliance Worldwide flagged a significant one-time charge of between US$100 million and US$110 million for the current financial year. This charge is primarily non-cash and includes an approximately US$80 million goodwill impairment related to assets whose value and relevance have diminished substantially. The company has been shifting towards greater automation in its American operations and sourcing more cost-effectively from Asia, raising questions about the continued retention of Australian brass manufacturing assets.
The restructuring is closely linked to a broader strategic transition from brass to stainless steel components, exemplified by the launch of Reliance’s SharkBite Max product, which uses about 20% less brass. This product innovation has contributed to reduced demand for Australian brass manufacturing. The reported US$9 million net benefit breaks down into US$18 million in cost savings in North America, offset by a US$9 million charge in the Asia-Pacific region following the closures.
Analyst Alexandre Lu of Morgans maintained a “hold” rating on Reliance shares, which closed the most recent trading session down 3%, at A$3.56. Lu described the restructuring as a necessary move and characterized Reliance as a quality business with defensive attributes, a robust balance sheet, and a pipeline of new product initiatives and operational efficiencies poised to support future earnings growth. However, he noted uncertainty around the timing of a rebound in earnings, which largely depends on recovery prospects in the US housing market—a key end market for Reliance’s products. Morgans has a price target of A$3.60 on the stock.
The closures reflect ongoing challenges for Reliance as it adapts to shifting market dynamics, evolving product demand, and global supply chain realignments, particularly in the brass segment of its manufacturing footprint.