moc2014 wood products kiel miller
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woodTRANSCRIPT
Dave Fell, Francois Robichaud, Kiel Miller
May 8th, 2014
MOC 2014
The Market Case for Wood
Prefabricated Structures
© 2014 FPInnovations. All rights reserved. Copying and redistribution prohibited. ® FPInnovations, its marks and logos are trademarks of FPInnovations.
FPI: Construction Value Pathways 2013
“What is the building of the future”
In searching for the seeds of breakthrough and disruptive innovations this
Construction Value Pathways project came up with 3 directions for
FPInnovations research
Key Opportunities
Focus on systems rather than line item improvements and replacements
Shift labour costs into materials and systems in order to create growth
Make wood a front of mind system in the concept stage
2
© 2014 FPInnovations. All rights reserved. Copying and redistribution prohibited. ® FPInnovations, its marks and logos are trademarks of FPInnovations.
Agenda
STATE OF THE HOUSING MARKET
JAPAN AS A PROXY
THE NORTH AMERICAN CONTEXT
3
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CANADIAN & AMERICAN HOUSING
4
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THE STORY ON CANADIAN STARTS
• Starts for 2013 were
slightly off year over
year falling to 187,00
• Up 26% from the low of
2009 of 149,000 starts
• Driven by multi famil
which is up over 50% in
that time period and
represents over 60% of
all starts
• After an initial rebound
in 2010 single family
have either declined or
been stagnant
5
0%
10%
20%
30%
40%
50%
60%
70%
-
50
100
150
200
250
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
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200
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200
9
201
0
201
1
201
2
201
3
% M
ult
i F
am
ily
Ho
us
ing
Sta
rts (
,000)
Canadian Housing Starts
Single Family Multi Family % Multi Family
Source: CMHC
© 2014 FPInnovations. All rights reserved. Copying and redistribution prohibited. ® FPInnovations, its marks and logos are trademarks of FPInnovations.
0%
10%
20%
30%
40%
50%
60%
-
500
1,000
1,500
2,000
2,500
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
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20
13
% M
ult
i F
am
ily
Ho
us
ing
Sta
rts (
,000)
American Housing Starts
Single Family Multi Family % Multi Family
THE STORY ON AMERICAN STARTS
• Overbuilt in the first 5
years of the
millennium, starts
crashed a staggering
76% from over 2.0m in
‘05 to 554,000 in 09
• Since the low in ‘09
starts have recovered
66%; but still below the
rational mark of 1.35m
• Like us canucks the
recovery has been
driving by the
multifamily secotor,
which now represents
30% of starts
6
Source: US Census
© 2014 FPInnovations. All rights reserved. Copying and redistribution prohibited. ® FPInnovations, its marks and logos are trademarks of FPInnovations.
-
0.50
1.00
1.50
2.00
2.50
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
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20
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Co
nstr
ucti
on
Ch
art
In
dex (
Base 2
000 =
1.0
0)
North American Construction Start Index
CAD - SF CAD - MF USA - SF USA - MF
AN UNEQUAL RECOVERY
7
Source: CMHC, US CENSUS, FPI
SF (2013), 68.2%
MF (2000), 19.1%
Increase MF
Share (2013), 12.7%
American Housing Starts by Type
SF (2013), 40.9%
MF (2000), 39.2%
Increase MF
Share (2013), 19.9%
Canadian Housing Starts by Type
© 2014 FPInnovations. All rights reserved. Copying and redistribution prohibited. ® FPInnovations, its marks and logos are trademarks of FPInnovations.
THE HOUSING DEMANDS OF THE
FUTURE
8
As we move to 2025 we will see: they will have a greater portion made in factory than
onsite
they will be built within a shorter cycle-time
they will have significantly higher energy performance
they will use more engineered wood products per SQFT
they will use panelized solutions for structural walls, structural floors, and siding
they will use easier to recycle materials
Precision products will be needed to support prefabrication and energy efficiency
© 2014 FPInnovations. All rights reserved. Copying and redistribution prohibited. ® FPInnovations, its marks and logos are trademarks of FPInnovations.
JAPAN
9
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DRIVERS OF JAPANESE ADOPTION
10
• Rapid asset appreciation from 1985-1991
• Land prices increase upwards of 150%
• Greater Tokyo lots modestly located sold
for up $3.5 in todays $USD
Land Price
Skill Shortage
JAPANESE PRECUT POST & BEAM
FRAMING
0%
2%
4%
6%
8%
10%
12%
14%
25-2
9 y
rs
30-3
4 y
rs
35-3
9 y
rs
40-4
4 y
rs
45-4
9 y
rs
50-5
4 y
rs
55-5
9 y
rs
60-6
4 y
rs
65+
yrs
Age of Japanese Construction Worker
Source: BOJ, Tenryu
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PRECUT BEGAT FACTORY HOMES
11
Pro longed period of deflation
from 1998-06
• Established in 2000
• 10 year liability on a buyer or seller of new
residence
Housing Quality Assurance
Act
JAPANESE FACTORY BUILT HOME
1.00
1.05
1.10
1.15
1.20
1.25
1.30
1.35
19
80
19
86
19
92
19
98
20
04
20
10
Source: BOJ, Sekisui Heim, Emerald
© 2014 FPInnovations. All rights reserved. Copying and redistribution prohibited. ® FPInnovations, its marks and logos are trademarks of FPInnovations.
PREVALENCE OF JAPANESE
FACTORY HOMES
• Factory Homes
have in some
shape or form
been around since
the reconstruction
period following
WW2
• They are viewed
as a high end
housing option
• Consistently
represent between
~15% of all starts;
127K starts in
2013
12
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
500
600
700
800
900
1,000
1,100
1,200
1,300
1,400
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00
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01
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% M
ult
i F
am
ily
Ho
us
ing
Sta
rts (
,000)
Japanese Prefab Housing Starts
Housing Starts Prefab Starts % Multi Family
Source: Japan Lumber Journal
© 2014 FPInnovations. All rights reserved. Copying and redistribution prohibited. ® FPInnovations, its marks and logos are trademarks of FPInnovations.
TODAY PREFABRICATED MARKET
JPN
• Sekisui House is the largest prefab builder in
Japan; Constructing over 30,000 factory built
homes in 2013
• From the signing of the contract, you can be in
your new finished house in ~40 days
• 80% of a house in constructed in factory
13
Sekisui House ~21%
Big 8 Factory Home Builders
0 5 10 15 20 25 30 35 40 45
Finish (utilities, inspection)
Ship and Erect House
Build Module:
Received & Inventoried
Develop Building Materials:
Time is concentrated
in the Suppliers raw
material chain and
areas outside
Sekisui’s control
Source: Sekisui House, Wall 2008
© 2014 FPInnovations. All rights reserved. Copying and redistribution prohibited. ® FPInnovations, its marks and logos are trademarks of FPInnovations.
NORTH AMERICA
14
© 2014 FPInnovations. All rights reserved. Copying and redistribution prohibited. ® FPInnovations, its marks and logos are trademarks of FPInnovations. © 2014 FPInnovations. Tous droits réservés. Reproduction et diffusion interdites. Les marques et les logos de FPInnovations sont des marques déposées de FPInnovations
PREFABRICATION OCCURS IN 2 MAIN
STREAMS
Structural Components Industry • Has turned to a full systems provider (roof, floors walls)
• Is looking for adding value (closed panels, building
materials distribution, installation)
Prefab Homes Industry • Is ready to deliver frames instead of finished homes, to
serve builders in addition to homebuyers
• Looking for greater volumes in urban markets
In the future, convergence between the two
industries
15
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DISTRIBUTION IS CHANGING
16
0% 10% 20% 30% 40% 50% 60%
Roof Truss
Floor Truss
Wall Panel
Install Manufacture
• External Consolidation
amongst builders and the
rapid expansion from big box
home centres constrained
revenue growth amongst the
traditional prodealer segment
• In effort to avoid competition
from big box chains and offer
a differentiate value added
product to builder, prodealers
invested heavily in
prefabrication and turnkey
construction services
• In the USA more than 50% of
prodealers operate a structural
component manufacturing line
Industrialization of Prodealers
Source: Robichaud, 2014
© 2014 FPInnovations. All rights reserved. Copying and redistribution prohibited. ® FPInnovations, its marks and logos are trademarks of FPInnovations.
PREFAB & MODULE WALLS
17
• The Use of Prefab Walls in Modules in Site Built Construction
• The Washington metro market has the highest acceptance of prefab wall panels
• In addition Cleveland and New York utilize a significant amount of modules
0% 5% 10% 15% 20% 25%
Washington - Arlington
Detroit - Warren
Minneapolis - St Paul
Boston - Cambridge
Greater New York City
Cleveland - Elyria
Seattle - Tacoma
Tampa - St Petersburg
Los Angeles - Long Beach
Atlanta - Sandy Springs
Chicago - Naperville
Charlotte - Gastonia
Dallas - Fort Worth
Total
Prefab Wall Panels Using Lumber
Source: Robichaud, 2014
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PREFAB FLOOR DECK USAGE
18
0% 2% 4% 6% 8% 10% 12% 14% 16% 18%
Tampa - St Petersburg
Minneapolis - St Paul
Detroit - Warren
Boston - Cambridge
Greater New York City
Washington - Arlington
Cleveland - Elyria
Atlanta - Sandy Springs
Dallas - Fort Worth
Los Angeles - Long Beach
Chicago - Naperville
Charlotte - Gastonia
Seattle - Tacoma
Total
The Use of Prefab Floor Decks in Site Built Construction
Source: Robichaud, 2014
• The Use of Prefab Floor Decks for Site Built Construction
• Usage rates were negligible in the early 2000’s but have grown significantly in several markets
• The Orange shaded indicates more sophisticated metros the have an above average adoption of prefab
walls
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REVENUE & MARKET SEGMENTATION
19
0%
20%
40%
60%
80%
100%
Roof Truss Open Web FloorTruss
Distribution Prefab Walls(Opened)
Prefab Walls(Closed)
Other
Source: Robichaud, 2014
• Roof Trusses drive the structural components dealers
revenue; followed by floor truss at 15% and distribution at
9%; prefab walls while not a large contributor have made
large strides in PQ and BC
• Reflecting the reliance on roof truss for revenue turnover is
driven by single family
SF ~74%
MF ~26%
Residential: ~83%
Non Residential:
~17%
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At last, a look at future Product
Development: Panels Panel based construction is the future:
several product options can be developed
▫ Combining insulation and structure
▫ Prefabricated platform framed walls with increased value
▫ Next generation SIPs
▫ Innovative composites of wood with concrete, magnesia… competing gypsum?
▫ Light weight CLT for residential construction
Engineered and prefab floor systems are the future: need product development
Next gen studs are demanded
Fibre based insulation from two streams: panel mills and pulp mills
www.fpinnovations.ca
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For more information contact:
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MOVING INSTALL COSTS
22
Component $.Sqft Inst. $/Sqft Mat. $/Sqft Total
Exterior Wall Framing 1.49 0.64 2.13
Wood Siding 4.18 1.63 5.81
Insulation 0.30 0.24 0.54
Total Solution
Opportunity
$5.97 $2.51 $8.48
Labour, 70%
Materials, 30%
In a divide of simple operating
concerns labour represents ~70%
of costs