Modular construction boom on the anvil

Paran Balakrishnan | Updated on February 19, 2020

Boon: Modular tech has helped set up makeshift hospitals in China quickly   -  REUTERS

Cost effective and less polluting, it is being used to put up office blocks, hospitals and houses on a large scale in quick time

The world watched in wonder as China put together a 1,000-bed hospital in 10 days and then started constructing a second one that was ready for patients in barely six. But nobody at Katerra India, which specialises in modular construction, was particularly surprised. They reckon it’s a question of how many cranes can be brought to the site and also to the factory where the walls and pre-cast concrete slabs are fabricated. More cranes mean more money. “Nobody is asking how much it cost to build that hospital,” says Najeeb Khan, Katerra India’s head of design and business strategy.

It isn’t just the Chinese who’ve turned the spotlight on the latest modular construction techniques. Travis Kalanick, the much-watched Uber co-founder, is looking to build (construct) a new fortune by investing in Habitas, a start-up that advertises itself as a ‘Club Med for Millennials’ and which will use 3D technology to create hotels and resorts in fast-time. Habitas has raised $20 million to grow its “3D printed hotel” concept from its Mexico base to Asia, the Middle East and Africa. Other investors include Indian ad-tech billionaire Div Turakhia and Tinder co-founder Justin Matee.

Modular construction has been around for decades, but swift-moving technology means sophisticated buildings can now be put up in next to no time at all. Says Khan: “Our company is design-led. We’ll bring design into the industry in a big way. We’ll manufacture the buildings, but they won’t look like cookie-cutter creations.”

Also, there’s 3D printer technology that promises to make modular construction even speedier and able to perform more complex tasks. Modular construction has special relevance for India with its urgent need for infrastructure — it can be used for everything from office blocks to hospitals, schools, houses and malls. Equally importantly, it can be used to slash time and costs when putting up low-cost housing on a large scale.

Globally and in India, the construction industry is reckoned to be the second-largest in terms of turnover and also employment. Right now, India’s market is mired in a deep slowdown but boom times are seen returning, driven by needs of a burgeoning population. A PriceWaterhouseCoopers report points out that India’s urban population is likely to grow by around 165 million by 2030 and these people will need structures to live, work and play in.

Says Khan: “We’ll have to build one Chicago per year. Where are these people going to stay? They will need factories, offices, hospitals and much more.”

Remodelling construction

Katerra India is one company that aims to change the way construction is done. It’s a Silicon Valley company and after two years in India it already has 40 projects, including the Lulu Group’s two-million-sq-ft mall in Lucknow that’s scheduled to be handed over in May and inaugurated in October. The building is almost half-a-kilometre long and construction’s taken two years, but Khan says earlier it would have taken five years to put up.

How has the construction been done differently? Well, the mall’s been built using a total of 48,000 pieces. Four cranes at the site can install 50 pieces daily. A temporary Katerra factory near Lucknow can each day turn out 200 such pieces. Says Khan: “We could actually do it in a year but that would involve more cranes and more trucks and costs would go up.”

In the construction business, as in other sectors, India’s an intensely price-sensitive market so SoftBank-backed Katerra found it has to adjust its building techniques to ensure costs are kept as low as possible. It’s already built office buildings for Bosch, Infosys and Bengaluru-based developers like the Embassy Group and Vaishnavi and it’s about to erect a 1.5-million-sq-ft office building for a top-level global tech company in Hyderabad. It launched in India by buying KEF Infra, an offsite technology manufacturing company.

Construction is, unsurprisingly, an industry where huge amounts of waste are generated with each project. Katerra has sought to introduce manufacturing principles into its modular construction to reduce that waste considerably. Says Khan: “There’s a big difference between manufacturing and construction. Manufacturing is about products and construction is about projects. Can we make products in this industry? Then efficiency becomes better and costs come down.” Onsite, as well, there’s inevitably the dust factor that’s the plague of the industry. Katerra says that by employing modular techniques, it uses 60 per cent less water during construction. It also emits far less CO2

As an industry, construction can be extraordinarily time-consuming and that’s particularly true in India, where designers are far less involved in construction than in other countries. Also, there are familiar issues about land acquisition and the fact developers are searching out buyers even as their buildings are going up.

Software packages

One level of inefficiency that Katerra has encountered in India’s construction industry is the variety of software packages used by different players, such as the architects and contractors. To reduce that, it’s looking at creating a new software package, Apollo, that could be used by everyone from architects to contractors putting up buildings. Architects, however, say the cost-savings would need to be worthwhile for them to buy it.

There is one vast opportunity that could open up for modular construction — the Modi government’s determination to give a massive push to affordable housing. The affordable housing revolution is starting to take off, but it still needs big help to achieve the kind of ambitious numbers that the government has in mind and that’s where modular building techniques can come into play.

Low-cost housing

Katerra has already put together a model 500-sq.ft dwelling at its 40-acre plant outside Bengaluru and it says it’s done extensive research into the maximum utilisation of space for such dwelling units. However, these aren’t individual commissions. Buyers must be willing to take at least 1,000 units. The model could work either for the government or for factories looking to put up large townships at high speed.

Katerra expects this business to take off almost immediately and it hopes to sell around 25,000 units in the coming three months. They could also be bought by developers who’ve been scouting for the best way to make it big in affordable housing. And for cities like Delhi which are battling choking pollution, reducing construction dust through modular buildings would be a big advantage. Internationally, Katerra, which was founded in 2015, now has 700 projects and a global turnover of some $2.5 billion.

Technology’s almost certain to evolve and give modular construction a bigger edge over conventional building methods. But the Indian construction industry is notably change-resistant and it’s unlikely to reach out for new, transformative technologies speedily. Still, wait and watch: modular construction is a boom that is waiting to happen.

Published on February 19, 2020

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