House factory ready to roll
Where there was bare land a year ago, a factory now stands ready to reshape the residential construction industry. ALAN WOOD reports on the venture.
As Mike Greer and Bill Gee watch the emergence of their "high volume" residential panels factory, they have no concern they will contribute to an oversupply of new homes.
The $14 million industrial factory development includes $5m plus of specialist German machinery to be used to rapidly construct the panels for residential homes.
Greer, "a chippie by trade", is optimistic about the Rolleston-based factory's place in a Canterbury and Auckland building boom.
"This is fantastic for the residential construction industry. No-one in New Zealand has ever seen anything like this," he says of the joint venture company Concision, which he and Gee own.
Asked about any slowdown in the Canterbury rebuild and residential market, Greer says he has hundreds of pre-sold homes he is yet to make a start on.
Is there any danger of an overbuild by builders in the region?
"Well wouldn't that be good. Everyone is complaining about housing affordability. The only way to fix that is supply," Greer responds.
He says there are signs interest rates have stabilised and may even come down.
From April 1, a Government subsidy on first home buyers of new homes in Canterbury will be introduced. A buyer could get up to $20,000 towards a $450,000 home.
"So that's really going to stimulate things at that end of the market," Greer says.
The Reserve Bank was also signalling that eventually . . . it will remove loan to value ratio restrictions that have made it more difficult for first home buyers to get loans.
That should be good news for Concision as a maker of panels destined for house and commercial builds around New Zealand.
Its four directors, Gee, Greer, Peter Jensen and Richard McEwan got backing from ANZ bank for the factory in the iZone industrial park.
Gee has been thinking about such a project for years and is director and owner of Spanbild Holdings, which has Jensen as chief executive.
Mike Greer is owner of Mike Greer Homes NZ, which has McEwan as chief executive. They expect the factory operation to "really ramp up" in February.
Gee labels Greer "the biggest house builder in New Zealand" at the moment, and the pair have plans to replicate the factory model on an Auckland site to supply panelised homes into the spreading northern suburbs of Auckland like Silverdale, Orewa and over to Riverhead and Hobsonville in the west.
The second site and development will cost more than the $14m for the first, but Greer says the board could decide to push ahead with the project as early as February.
The Rolleston factory is about two weeks away from starting to hum, with help from Munich staff from the Weinmann machine maker.
Concision general manager Dave Scobie says the team have been unpacking containers of "foil bag" wrapped components much like Christmas presents.
"Next week, they're working a night shift here, connecting up back to Germany via the internet and testing all the software overnight."
The computer controlled system will cut studs and dwangs out of six metre lengths of timber, before the wall frames are assembled.
To protect the multimillion-dollar investment the concrete "post-tensioned" floor was laid in "one pour" of about 160 concrete trucks, with wire cables tightened as the concrete dried.
"So on the floor there are no cuts, there are no cracks, there's no expansion joints. It's a perfectly flat floor," Scobie says.
A small front office crew will deal with orders.
Greer estimates the factory could supply the backbone for about half of his builds for 2015.
Scobie says the factory will ramp up from eight to about 22 workers in the short term, with the potential to do two shifts down the track and employ 56.
"We're trying to employ those [initial eight] at the moment. It's a bit of a challenge but we're getting there . . . not just construction, but manufacturing and any field at the moment it's pretty hard to get factory employees," Scobie says.
Mike Greer Homes has had a couple of big years with 799 homes completed in calendar 2013 and more than 850 due to be completed in 2014, including 50 in the Auckland market.
Greer says his company has about 750 presold houses at present, but with some of those already under way, only about half of that number are likely to contain pre-made panels.
"It depends on how many Dave can make in the first year," he jokes.
Both Gee and Greer are keen on the time and cost savings a factory can make turning out 3.2 metre high by 12m long panels.
Gee says the factory takes away the difficulties created by weather and labour constraints on a building site.
Greer says labour costs on Christchurch building sites have gone up about 25 per cent since the first earthquakes of 2010.
The factory will be able to turn out about 1000 homes a year.
Spanbild's Jensen says the panels could go into larger residential or commercial projects.
"For example Housing New Zealand might be looking for 20 or 30 houses in a location, and this comes into its own.
"We might not be the builder in that situation, we might partner with a large scale builder."
Other applications Spanbild might include are school projects and walls in apartment and multi-level commercial buildings.
Spanbild has been very pleased with recent demand for its garages, farm buildings, homes and light industrial projects, with 5000 buildings to be erected in 2014, and factory volumes the highest they've been for five years, Jensen says.
One area of concern is "where the dairy payout is going . . . we're not seeing an influence at the moment, but we're just keeping a watchful eye."
Both Gee and Greer are looking at supplying outside Christchurch.
Greer this week met a retirement village operator thinking of establishing in Riverton, wanting to see if a small village could be economically built in remote Southland.
"We're going to bang that back through the pricing model and put it in front of them," Greer says.
Scobie says the panels can be shipped around the country "priced effectively" to arrive at a building site on the back of a truck much like as seen on the television series Grand Designs.
"Our initial indications are that a house of about 150 square metres, we can probably get that on one truck," Scobie says.
Mike Greer Homes special projects boss Peter Freeman said the Weinmann process allowed each panel to fit a project space. Initially a panel is nailed together, then flipped on the conveyor belt to allow insulation to be manually cut into the frame spaces before plasterboard was added to the other side of the panel.
Nail guns, nailing down the wallboard, will sound like "machine gun" fire when staples are fired.
Necessary holes could be cut in the plasterboard with a variety of routers, circular saw and drills on a moving arm. Vacuum hoods come down to suck away excess dust.
"Internationally this process shows 23 per cent less waste than a conventional build," Freeman says.
There are also great speed advantages.
The factory will source directly from manufacturers rather than merchant supply channels like Placemakers, Scobie says.
Gee got into the building industry in 1975 via his father who ran Garage Builders South Island. He studied law, was a regional South Island manager for the Chubb security firm, then set up his own Canterbury Alarms company when Chubb offloaded the fire alarm division.
He and the other joint venture partners steer away from the term "prefabrication," saying it makes the general public think of already assembled houses trucking down the main road, with a wide load warning for passing motorists.
Jensen says another key thing in a factory environment was repeat processes, doing the same thing, the same way every time. The tolerance for the length of a built-to-size wall will be 1.5 millimetres.
Spanbild had been thinking about panels for 18 months, Jensen says. "We were very close to making a decision to proceed, when almost by chance we discovered the Mike Greer guys were having similar thought processes. It didn't take too many coffees to decide it wouldn't be a brilliant idea to build plants right next to each other."
As far as he knows there is only one other example of another panelisation plant, eHOME NZ, but it is on a much smaller scale.
- The Press