On Strongbuild and prefab pioneering

NEWS FROM THE FRONT DESK ISSUE NO 413–  UPDATED 9.28 PM: Strongbuild was clearly the darling of the prefab and lightweight timber construction scene. Pretty much everyone we spoke to about the story that broke on Thursday about the company’s failure said what lovely people are Adam Strong, his fellow directors brothers Jamie and Tim, and long term friend Shane Strong who is also in the business but not related.

How passionate and innovative and determined to improve the quality and sustainability of the construction industry, our sources said.

There’s an urgent need for that.

But passion isn’t always enough.

On Thursday Brian Silvia and Andrew Cummins from BRI Ferriers took over control of the company under a voluntary administration arrangement.

The thing that most people were keen to say when we spoke to them was was that this was not an indication of an industry about to fall over. The industry was strong and growing and had a great future.

This was not to be a story about Strongbuild as the first in a series of failures to come, Adam Strong said.

Geoff Gourley, who is one of the most informed people in the building, development and sustainability industry and founder of Impact Investment Fund, told The Fifth Estate that the industry is still very “young and immature,” in his judgement. And that means a rocky road with successes and failures.

On Thursday, as the news on Strongbuild broke, timber and building product manufacturer Big River announced on the Australian Stock Exchange that it’s bought a prefab wall and timber manufacturing facility in Geelong, MB Prefab, which has sales of around $10 million a year.

At base is the fundamental question of price. You can get a volume built house for $900 a square metre, but a prefab modular home you will pay between $2500 as sq m and $3000.

Gourley says one of the best performers in the sector right now is Prebuilt, based at Kilsyth, in Melbourne’s East.

“They started around [10 years ago] and then got into commercial buildings like schools.

“Archiblox seem to be going okay. They have good marketing and no automation.”

Gourley says the ructions are a shame because prefab and modular is the “way to go to innovate and become more sustainable.”

His advice to the industry is “if you want to do it properly you need to be well backed financially. You need a big investment to do that. Need to be surrounded by the right people and the right advice and it needs to be designed right from the start.

“I’m now seeing architects coming to me and others saying, ‘can you convert this design into prefab modular?’ and the answer is you have to design it right from the start.”

The model to strive to emulate is prefab giant in the US, Katerra. “It’s raised US$1 billion and it’s worth US$3 billion.”

The company acquires architectural firms because it designs with modular in mind right from the start.

“They’re doing really well.”

But what everyone we spoke to said on Thursday was “how sad”. 

The transition from dream to reality often is jarring and shocking. The pioneers indeed do carry arrows in their backs. But thank goodness for these brave souls. They make room for the followers that come behind and companies such as Strongbuild deserve to retrieve their most important asset of all, their intellectual content, settings and passions so that they can keep sharing this with the rest of us.

Wouldn’t it be great if we could frame up some ways these companies could get the momentum they deserve.

UPDATE: this story originally referenced another company which was said to have also been placed in voluntary liquidation. More information will follow in coming days.

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