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How frameworks can offer shelter from recession for MMC specialists

Clive Feeney, LHC Group Director

More than 6,000 construction insolvencies are expected in 2023 and construction output is forecast to fall by 3.9%, prompting sector-wide concern around project pipelines and profit margins.

Predictions across the board paint a bleak picture, but more so in the private sector with an expected 38% drop in new housing starts over the next two years.  In the public sector there is demand for new social housing and requirement to retrofit existing ‘fuel poor’ social homes to an EPC band C by 2030. However, monetary support was not forthcoming in Chancellor Jeremy Hunt’s Autumn Statement in November last year. There was no mention of funding to improve the UK’s energy-inefficient housing stock – loft insulation and boiler replacement aside – nor reassurance for new social housing provision.

Nonetheless, public sector construction frameworks are offering some shelter from the risks wrought by recession.

As a construction framework provider for the public sector, 2023 will be a busy year for LHC, with five new frameworks set for launch: Asset Safety and Compliance, Refurbishment and Associated Retrofit Works, Energy Efficiency and Decarbonisation, Fire Safety and Supply, and Installation of Aluminium Windows and Doors. The assessment process for the £1.2bn NH3 (Modern Methods of Construction (MMC) of New Homes) framework is also underway, with appointed companies announced in spring.
This makes the prospect of public sector building a more secure prospect of work for this year into 2024.

Why social housing must continue

Our housing stock is ageing; 26 million require retrofit – 4.5 million of which are in social housing.

Building and retrofit must continue in social housing, both to move towards the static 2050 net zero target and protect vulnerable tenants from the rising cost of living.  Doing this cost-effectively will be even more important in the coming 12 months. Chancellor Jeremy Hunt placed a 7% cap on the amount social landlords can increase rents for tenants as part of the Autumn Statement. This offers a tough compromise: while providing some relief for residents at the sharp end of the cost-of-living crisis owing to a benefit cap lift and local housing allowance (LHA) freeze, it means housing associations will feel a tighter squeeze.

On the new social housing front, recent Regulator of Social Housing statistics also show just 31,000 social homes were built from March 2021 to 2022. This is almost five times short of the National Housing Federation’s (NHF)145,000 estimated annual requirement in the next decade to meet the population’s needs.

Many housing associations and local authorities LHC works with are using construction frameworks because the benefits, especially in turbulent times, are clear. By working in this way, they find they are able to build stronger, longer working relationships and contacts, have better supply chain engagement, and more pipeline security.

Framework benefits in tough times

The following factors could also be vital in helping MMC contractors – especially SMEs – weather the impending economic storm.

1. Partnering for shared benefits
The collaborative nature of frameworks allows each company to benefit from one another’s insight and expertise. This in turn develops strong contacts and increases the opportunity of appointment to future projects.
2. Pipeline of work 
The pipeline of work that can come from using a procurement framework creates greater certainty and helps protect jobs for contractors who may be worried about the future. Traditionally operating on four-year cycles, they offer a more predictable calendar of work.
3. Operational efficiency
SMEs are often too stretched to apply for individual construction projects, while larger contractor bid teams can find they are at the beck and call of new tender applications. Being appointed to a framework creates more consistent work opportunities and reduces the frequency of repeat, lengthy procurements.
4. Long-term pricing and cost aggregation
Frameworks enable all parties to explore a project in detail and more accurately consider costs to reach an agreement up front. While there may be negotiation further down the line at each individual project stage, the long-term nature of frameworks and pricing facilitates improved cost aggregation by providing full visibility from day one. This lessens the financial blow of reduced contractor margins in the case of price rises.
5. Better economies of scale
Having awareness of the client’s longer-term pipeline provides opportunities for contractors to plan work more efficiently, improving their resource planning and identifying cost efficiencies – while driving economies of scale.
6. Shared risk
Using a procurement framework also allows contractors to explore potential risks – including rising costs – and agree how the impacts might be managed between them and the client. Without involving contractors before putting out a tender, clients miss the opportunity for potential risks to be identified, scoped and properly priced into a contract, using projections into the four-year framework lifespan.

 

To speak to a local contact about our public sector construction frameworks

CLICK HERE

 

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Benefits of hybrid off-site construction

The most important benefit of hybrid off-site construction is that it recaptures some of the flexibility associated with traditional, stick-built construction without giving up the environmental, economic, or quality benefits of off-site construction.

Taking a hybrid approach provides flexibility in a few ways — perhaps most importantly with respect to building design and panel or module fabrication and transportation options.

Hybridized construction enables designers to address this broad range of constraints through a greater number of potential suppliers, which provides more manufacturing and transportation options to meet the architectural and engineering requirements for each project.

There are also advantages to be realized at the building site. Perhaps most importantly, the finishes in the structure’s high-value areas can be completed at the factory and shipped to the site in a weather-proof module. Expensive finish materials for kitchens and bathrooms, for example, can be installed in a manufacturing setting and then protected from damage and moisture, reducing risk and waste for builders and owners.

Integration is the key to successfully designing and constructing a building that will employ multiple off-site construction methods. It is also the biggest challenge. Volumetric modules and panels must connect within strict tolerances for the design to be realized, so it’s critical that all stakeholders work from a shared set of plans.

Vertex Systems created Vertex BD, a building information modeling (BIM) software platform, specifically to handle complex design scenarios of this nature. The platform automates design and manufacturing processes for all the prefabricated components that will be built and shipped to the job site. The software also translates essential project information across all the disciplines involved in producing each module.

Manufacturing data, plans, schedules, and material reports can be automatically created within the platform and shared with contractors and suppliers to ensure tight coordination across the project.

3D visualization tools are immensely important for hybrid projects because they allow designers, owners, and builders to see how the 3D modules and panels will come together and how all the critical connections will be formed. Vertex BD includes powerful 3D visualization tools that allow designers to perfect the design and address any glitches early in the design process.

 

CLICK HERE TO VISIT THE VERTEX WEBSITE

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THE OFFSITE GUIDE, LAUNCH

The Offsite Guide – A Revolutionary One-Stop Resource for Modern Methods of Construction (MMC).

 

Launched in January 2023 The Offsite Guide is the first B2B marketplace in the UK and Europe for MMC – a platform for businesses to explore options for using Modern Methods of Construction (MMC) and interact with specialist manufacturers.

As a marketplace TOG facilitates engagement between key market participants and drives awareness of the many benefits of MMC including more efficient production, economies of scale and repeatability. In doing so it provides a central point of reference for product variety, availability, & pricing specification. Crucially, it provides a platform for direct communication between a wide range of providers and their potential customers in this fragmented market.

For TOG Partners, listing MMC case studies & solutions on the Offsite Guide marketplace is a cost-effective method for manufacturers to bring in targeted traffic. Partners listings can easily be found under various search categories that can subtlety hand off and complement other marketing channels in the marketeer’s toolbox. Listing as a partner will also assist the partner company’s own website SEO ranking in an effective and cost-efficient way.

The Offsite Guide – A Revolutionary One-Stop Resource for Modern Methods of Construction (MMC).

 

Launched in January 2023 The Offsite Guide is the first B2B marketplace in the UK and Europe for MMC – a platform for businesses to explore options for using Modern Methods of Construction (MMC) and interact with specialist manufacturers.

As a marketplace TOG facilitates engagement between key market participants and drives awareness of the many benefits of MMC including more efficient production, economies of scale and repeatability. In doing so it provides a central point of reference for product variety, availability, & pricing specification. Crucially, it provides a platform for direct communication between a wide range of providers and their potential customers in this fragmented market.

 

“At The Offsite Guide we attract and facilitate early interaction with customers, allowing manufacturers of commercial and domestic modular buildings and offsite solutions to showcase a range of their products & help educate potential customers. We provide a trusted platform not only for showcasing offsite construction, but also to facilitate initial dialogue and ongoing interaction between customers, manufacturers and MMC suppliers.” Ingrid Orbie – Director

THE OFFSITE GUIDE

 

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NorDan UK Announces Record Growth

Rise of timber driven by carbon reduction and improving building performance 

 

High performance timber windows and doors manufacturer, NorDan UK Ltd, has announced a record 34 percent increase in turnover for a single year for 2022.

NorDan’s turnover has increased year-on-year since 2016 and has grown more than 85 percent in the last five years.

Sustained growth across private and public customers is further evidence of changing priorities in the construction industry, with an increasing focus now on the whole life carbon reduction of buildings and the lengthening the lifespan of products and materials.

Originally conceived to withstand the harsh rigours of a Nordic maritime winter, NorDan’s timber and aluminum-clad timber windows and doors have been known as a niche product, offering some of the industry’s highest standards in thermal performance and durability.

But with architects and specifiers now seeking materials that meet the changing demands of developers and housebuilders, NorDan’s products are now becoming a mainstream in UK building.

This is being heavily influenced by the Future Homes Standard (set to come into force in 2025), with numerous big social landlords and local authorities already specifying and building to that standard – including the likes of NorDan customers Reading Council and Clarion Housing Group.

The sale of timber products has also been driven by an increasing need to reduce whole life carbon of buildings, including the embodied carbon emissions generated from the manufacture, transport, installation, and eventual disposal of building materials.

NorDan is one of the few construction suppliers that has Environmental Product Declarations (or EPDs) on virtually its entire product range, proving third-party validated audits of all the carbon in its products.

 

 

Alex Brown, NorDan UK Managing Director said: “Last year’s record growth is obviously very pleasing, but 100% consistent with the wider direction of travel in construction and the built environment.

“People have long known that NorDan’s timber products are carbon negative and offer a 60-year lifespan but have maybe in the past needed a reason to specify what were perceived premium windows or doors.

“What we now see is low carbon, durability, and high-thermal performance becoming the new mainstream, and this is taking NorDan’s and other quality timber products with it.

“Architects and developers are now seeking incremental gains across buildings to meet raising industry standards, as well as the expectations of the public, and NorDan can give them the low-carbon, high-performance guarantees sought.

Alex concludes: “Looking ahead, NorDan UK’s priority is to continue developing its people and infrastructure to maintain anticipated accelerated growth over the coming years.”

 

Mat Clarke, Contracts Manager at contractor Henry Boot Construction comments:

 

“Sustainability, and reducing the whole life carbon impact of building, has become an increasing priority for Henry Boot Construction in recent years, and we now routinely seek out sustainable suppliers and partners.

“As a result, we are increasing the amount of timber we use in our construction projects, and this has made NorDan a natural choice, as it places sustainability at the heart of its operations and products.

Mat continues: “A recent example of this can be found at our marquee development at The Cocoa Works in York, where NorDan’s products have the specification to achieve a high environmental and energy performance.”

 

Ayo Allu, Director of Design, Technical & Innovation at NorDan customer Clarion Housing Group comments:

 

“Material costs and the impact of embodied carbon calculations on business performance is increasingly driving the way Clarion is constructing its buildings, as is our familiarity with the timber products on the market, and the vast increase in testing data compared to previous years.

“Embodied carbon is already a development consideration within major cities, and the GLA how has an embodied carbon tool which has to be completed for each new development – with other cities set to follow suit.”

Ayo concludes: “As a development business, we’re now benchmarking our embodied carbon for development and construction activities for the second year running, so we can set reduction targets for ourselves and our supply chain.”

 

 

 

 

 

 

Both Henry Boot Construction and Clarion Housing Group are working with NorDan on the iconic Cocoa Works refurbishment project in York.

 

 

NorDan UK is the British arm of the Norwegian founded NorDan Group, a multinational business that operates in seven European countries, employing 2,200 people across 12 factories and 35 sales offices. 

 

For more information PLEASE CLICK HERE

 

For more information on the Cocoa Works, York, PLEASE CLICK HERE

 

 

 

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Rail-based flow production of modular homes

 

 

 

 

 

 

 

 

 

 

By Derek P. Clark, co-owner and founder of LOSCYO GmbH, Bielefeld, Germany

An innovative solution for offsite construction puts the building units onto rail-based platforms. The system requires minimal power. The rails are installed flush with the floor and create no barriers on the shopfloor. This enables efficient factory-line production with determined cycle times.

Modular or 3D volumetric construction has triggered a surge in innovation in the construction industry. Improving on conventional prefabrication, which is mostly limited to standardised wall and floor panels, modular construction raises the ratio of works that can be completed in factories to 70% to 90%, depending on the design and the degree of sophistication and individualisation. This makes it an efficient alternative to conventional construction methods, and particularly expedient in light of coinciding deficits in affordable housing, building materials and skilled workers. According to official numbers, 300,000 additional housing units per year will be needed by the mid-2020s. Modular construction provides a reliable way to reduce planning and building time, effort and costs. In addition to individual homes, it is also an attractive solution for housing associations, cooperatives, and municipal developers, allowing them to provide new, high-quality housing in larger quantities within a reasonable timeframe. There are already several big players that specialise exclusively in modular building, covering various sizes from single detached homes to entire blocks of flats, as well as larger buildings for the commercial or public sector such as schools, kindergartens and office blocks.

One-piece flow production of modular homes

As most works are shifted from construction sites to a factory, logistics become of uttermost importance to productivity and efficiency. Following the example of automotive production lines, the spatial separation of individual crafts and construction steps along a production line is most efficient. Thereby, the manufacturing cycle can be clearly structured to run smoothly without collisions and with reliable, transparent material logistics ensuring that the tools and resources for each craft are always on hand when needed. The high proportion of standardised, pre-produced components reduces the need for skilled workers. While the construction of a conventional prefabricated house with onsite assembly of wall and floor panels takes several months, modular homes are completed in a matter of days in such production lines, with transport to the destination and erection also taking only a few days. Moving entire building modules through a factory requires suitable means of transport. The LOXrail system from German manufacturer LOSYCO, originally developed for the manufacturing industries, provides a robust and highly efficient intra-logistics solution for offsite construction. LOXrail tracks and networks can be adapted to individual plant layouts and ergonomically integrated with existing handling solutions such as overhead cranes, lifting platforms, conveyors, automated manipulators or robots.

Platforms for manual transport or featuring auxiliary drives are designed to individual requirements

 

Low-power ergonomic transport solution

The intra-logistics specialists at LOSYCO have already realised rail-based production lines for modular construction companies in Europe, the UK, the US and Dubai. The low-height transport platforms provide full access from all sides. Workers can step onto them and complete all necessary jobs as they would on the shopfloor. The tracks are laid flush with the floor and thus pose no obstacle for workers, carts or pallet jacks. The hardened steel wheels and round rails are shaped for minimal rolling friction. Bulky and heavy loads can be transported with minimal power, or even pushed by hand. The transport platforms are designed to the particular requirements of the customer. LOSYCO has implemented LOXrail transport solutions for modular housing units measuring up to 40 m² and weighing more than 20 tons. The rails are available in CF53 precision steel or stainless steel with 25 mm or 40 mm diameters for payloads up to 60 tons. The manufacturer offers various customisation options: single tracks or networks including cross-connections between production lines and different ways to power the transport platforms.

Streamlined production

The LOXrail system is an economic, low-maintenance and resilient transport solution that enables modular construction companies to fully utilise the potential of factory-line production. Offsite construction of 3D volumetric units means that almost all construction stages can be completed much more quickly, under repeatable, weather-independent conditions, reducing costs and saving resources and with continuous quality monitoring. Fully equipped modular homes manufactured in one-piece flow production eliminate the need for lengthy planning and elaborate design and coordination work at the construction site, while ensuring consistently high quality standards throughout all production phases. All jobs are seamlessly integrated in an efficient project schedule as almost the entire construction is carried out on the assembly line. Noise and pollution at the building site are also minimised – improving acceptance in the neighbourhoods. Compared to conventional construction methods, offsite construction is much more energy-efficient and environmentally friendly. Modular construction of a typical semi-detached house, for example, can save around 20% more energy and 10% more CO2 per m² than required by the Building Regulations Guidance, Part L1A 2016. In addition, the use of modern construction and insulation materials has a positive effect on the building’s lifetime energy balance: heating costs can be reduced to as little as a third compared to existing solid buildings.

 

CLICK HERE TO EMAIL LOSYCO

 

CLICK HERE TO VISIT THE LOSYCO WEBSITE

 

 

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