Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Fletcher invests tens of millions on prefab housing factory

Fletcher invests 'tens of millions' on prefab housing factory, joins emerging KiwiBuild providers

By Pattrick Smellie

Sept. 14 (BusinessDesk) - Fletcher Building plans to invest "tens of millions" of dollars in a 'panelised' housing plant in South Auckland to coincide with the KiwiBuild programme's call for the establishment of new prefabricated housing capacity.

The plant will initially be capable of pre-building some 500 homes a year, with capacity to grow output quickly to 1,000 homes annually, Fletcher Living chief executive Steve Evans told BusinessDesk.

KiwiBuild aims to build 100,000 affordable homes during the next decade. While Fletcher is keen to be involved, it isn't planning to be a sole supplier and only a third of the new plant's output may go to KiwiBuild projects, Evans said.

"We are very interested in participating and we've made our feelings known to the government".

The KiwiBuild secretariat released an Invitation to Participate (ITP) document last month, seeking proposals for investment in prefabricated housing factories.

The New Zealand Superannuation Fund also appears likely to lodge a proposal. Chief executive Matt Whineray told BusinessDesk in a recent interview that the sovereign pension fund had been "doing quite a lot of work about where the opportunity might sit in that spectrum."

Any investment in a pre-fab housing factory needed to stack up commercially, he said.

"We haven’t landed on where we are with that, but owning land and developing homes on it is one type of risk," said Whineray, referring to the Super Fund's involvement in housing development at Hobsonville, in west Auckland. "Owning a factory that produces homes that can go on that land: that’s a quite different type of risk."

Discussion of the Super Fund investing in a central North Island prefab housing factory first emerged in official papers sighted by BusinessDesk earlier this year.

"What sort of pipeline do you need to be able to invest in that type of factory? People have talked about the scale, about what number of houses per year do you need to warrant investment in the factory? That’s several thousand," Whineray said.

"So that says: what’s the pipeline over a number of years to spend X million dollars to bring this technology in and establishing the factory and getting all the suppliers and sourcing? We haven’t really established that that’s the way for us to go."

Both Evans and Whineray stressed that low-cost home construction was only part of the puzzle. Access to sufficient land at an appropriate price is also key.

Fletcher aspires to be a "key player" delivering KiwiBuild homes, but the challenge for the programme will be finding enough land, Evans said.

"So we will still be doing our own open market housing. We wouldn't want to rely 100 percent on supplying to KiwiBuild."

He noted the company was sufficiently confident of demand for panelised, pre-constructed homes to have ordered the equipment for the first phase of the factory development. There was enough land at its planned South Auckland site to double capacity as demand allowed.

The plant will specialise in two-storey duplex and terraced homes. They will be constructed over 22 weeks in the factory and then erected on-site within a single day, with all wall plumbing and electrical wiring already fitted in a weathertight frame. That can then be customised both inside and out with customers' preferred colour schemes, claddings, and choices of about a dozen different internal layouts.

Evans said the company had worked extensively with Auckland Council on an "accelerated permissions pathway" over the past 18 months.

While homes produced in the current "pilot phase" are likely to cost about the same as a house constructed using normal, on-site building techniques, those building, transport and other costs are expected to fall over time.

Fletcher will supply its own developments in the early stages before starting to supply other customers once it had perfected its systems, Evans said.

"In a year's time, I expect we will be producing hundreds of homes, a couple of homes each day."


© Scoop Media

Business Headlines | Sci-Tech Headlines


Industry Report: Growing Interactive Sector Wants Screen Grants

Introducing a coordinated plan that invests in emerging talent and allows interactive media to access existing screen industry programmes would create hundreds of hi-tech and creative industry jobs. More>>


Ground Rules: Government Moves To Protect Best Growing Land

“Continuing to grow food in the volumes and quality we have come to expect depends on the availability of land and the quality of the soil. Once productive land is built on, we can’t use it for food production, which is why we need to act now.” More>>


Royal Society: Calls For Overhaul Of Gene-Technology Regulations

An expert panel considering the implications of new technologies that allow much more controlled and precise ‘editing’ of genes, has concluded it’s time for an overhaul of the regulations and that there’s an urgent need for wide discussion and debate about gene editing... More>>


Retail: Card Spending Dips In July

Seasonally-adjusted electronic card spending dipped in July by 0.1 percent after being flat in June, according to Stats NZ. Economists had expected a 0.5 percent lift, according to the median in a Bloomberg poll. More>>


Product Stewardship: Govt Takes More Action To Reduce Waste

The Government is proposing a new way to deal with environmentally harmful products before they become waste, including plastic packing and bottles, as part of a wider plan to reduce the amount of rubbish ending up in landfills. More>>


Earnings Update: Fonterra Sees Up To $675m Loss On Writedowns

“While the Co-op’s FY19 underlying earnings range is within the current guidance of 10-15 cents per share, when you take into consideration these likely write-downs, we expect to make a reported loss of $590-675 million this year, which is a 37 to 42 cent loss per share." More>>