Karl-Heinz Weiss has been advising on a new prefab factory at Orange, 260 kilometres west of Sydney. If all goes to plan this latest foray into modern methods of construction will be able to contribute around 2500 houses to solve the housing crisis. But this is an industry that’s been on a rocky road. Weiss, former head of Lendlease’s DesignMake factory business will share his views on the challenges and opportunities of MMC on 1 April at The Fifth Estate’s leaders forum Building/Unbuilding – what construc tion needs now.
Karl-Heinz Weiss and his small team of five people were headhunted by Lendlease in 2013 to establish and run the property giant’s ambitions in prefab.
The team was in London, working on projects such as Stadthaus, or Murray Grove, a nine-storey residential building in Hackney, completed in 2009 and hailed as the tallest timber residential building in the world at the time. Another job was at the London 2012 Olympics.
Weiss and his team, with a range of skills, were strong advocates for mass timber and prefabrication. Lendlease could see the potential in combining the methodology and the material. The offsite construction system – essentially buildings constructed in a factory setting – could solve a number of problems. It could slash embodied carbon by minimising waste through precise measurement of materials, it could use more timber, which sequesters carbon, and it could solve our need for faster construction – even if not always at a lower price.
Under Weiss’ oversight, the DesignMake business kicked off at a factory in Western Sydney.
Not all has gone well with this industry. Its huge ambitions come with a trail of pioneering failures and a learn as you go approach – typical for early adopters of new technology.
DesignMake too didn’t make it, with fears for its future reported in 2019, and culminating in the business shutting down soon after, thanks to a change in the market mandate by the company, making the business unsustainable.
Interestingly Weiss, who’s credited as one of a handful of true experts in the field, does not blame the technology or the factory as the problem. There are systemic issues at play, he says. They’re highly complex, but the benefits are worth persevering with.
There are new factories springing up. At Orange, he hopes that the new factory operated by Green Timber Technology (GTT) in partnership with Pentarch Group, will realise MMC’s early promises and its current potential. It could also meet our huge housing crisis needs with greater density, he tells The Fifth Estate in a recent interview.
Interestingly, the Orange factory managed to pick up the DesignMake equipment that was mothballed in a warehouse in Melbourne for four years.
So what has gone wrong with the MMC dreams so far?
In our sampling of this industry, a common theme emerges: someone decides the company no longer needs to pursue the quantity or style of products, such as apartments that were commissioned and pulls the pin on the order. There might be a change in business strategy, as happened with Lendlease and the DesignMake factory.
In other cases, such as Strongbuild’s prefab business, there was a sudden cancellation of a big order. Cross Laminated Offsite Solutions, or CLOS, in Geelong, west of Melbourne, was another failure mid-last year.
Another major failure might have been a tad political – the cancellation of the huge educational buildings program by the NSW government.
Pete Morrison chief executive of GTT, whose factory at Orange was spruiked on a government website, says he’s frustrated by the politicking that’s beset MMC.
He told The Fifth Estate on Tuesday that there was “political gesturing” around MMC” It had been a massive program with probably 50 businesses that had invested a lot of time and money in that”.
Morrison had come to Australia from the UK to work on the NSW education buildings program.
He’s a big believer in the concept. His first job was in prefab and when he joined the regular construction industry, he thought it was “stupid, I hated it.”
At Orange, the business will be in a revived Electrolux factory that had been lying dormant for nine years. He’s currently got 20 people on staff and hopes to reach 100 at capacity. A far cry from the 9000 formerly employed in the factory, but a great signal to meeting the housing crisis.
Morrison says the company’s focus will be on category 2 products, which are essentially Ikea-style flat packs that can be assembled to the desired style. He thinks these are far superior to the volumetric category 3 models that create what he terms only slightly improved versions of dongers.
What are the barriers to achieving the dreams
It’s clear that Morrison is confident of success. Weiss too is optimistic. He’s been advising the business on some of the high-level strategic issues that he thinks are key for the business.
With the benefits of a long-range and wide view of the industry, Weiss says what’s gone wrong in the past requires complex answers and a keen understanding of the market, not just a focus on the construction and delivery process.
Weiss grew up in Germany and took up a training as a carpenter and cabinet maker, instead of university. (Today he is a professor of practice at Monash University, Architecture). These were heady days, with politics and the environmental movement to the fore of his decision making.
There was also a driving desire to contribute on his own terms, so Weiss soon started a company. In Germany, that requires a good deal more than hanging a shingle on the door, he explains. He had to earn some rigid qualifications. He studied timber engineering, industrial design and what he sees now as coming the “full circle” with sustainable or eco design.
The work took him to the UK in the mid-90s, where he worked in a company that procured sustainable building materials for builders.
“I worked across everything from clay bricks to solar powered hot water systems to blower door testing, all the way to engineered timber,” he recalls. It’s when his contribution to Stadhaus came in – in German the world it simply means townhouse.
“You could say that was the first CLT [cross laminated timber] building anywhere; it caught the attention of people across the globe.” Australians among them.
There’s a big difference between conventional building and MMC, Weiss says.
Flexibility for one. For instance, if the market dramatically changes a regular developer with traditional construction practices, can do a number of things: sell the site, landbank it or quickly switch around what they intend to build on the site.
With MMC though that’s no easy thing. The pipeline of demand is everything. It’s what went wrong with at least some of the failures in the space.
The problems are the same world-wide Weiss says. “In the UK, European or American prefabrication market you see similar stories.”
And it’s costly.
“I did a high level calculation – back off envelope – a few weeks ago, and I came to a shocking, shocking number of close to seven billion Australian dollars had been invested in offsite and pre fabrication in the past.” Katerra alone lost around $US2 billion when it folded, he says.
That’s a big waste of resources globally but, even more important, perhaps, a waste of hope and optimism.
Weiss notes that in the UK, the US and Australia where the failures occurred, they “had all the right policies in place”.
Weiss says we’re “in love with silver bullets”. There’s a “fascination around doing something differently, doing something new, using technology. But what kind of the industry hasn’t really picked up is the lessons learned of other industries because suddenly you’re no longer building or delivering a building on a project-by-project basis, you’re in the world of manufacturing a product.”
This requires an entirely different approach, a “different mindset”.
But in MMC we are approaching the problem and solution from the wrong way around.
Karl-Heinz Weiss will delve more into his perceived promises and solutions for MMC at Building/unbuilding – what construction needs now.