PHOTO
The building industry is not known for embracing innovation quickly. Although there are firms in China and the Middle East that are experimenting with new technologies such as 3D printing, adoption has been slow and the industry has remained fairly conservative, with a report last year by consultancy firm McKinsey claiming that productivity growth among construction workers has increased by just 1 percent per year over the past two decades.
This is particularly true in the Gulf region, where a reliance on cheap, imported labour has been seen as a disincentive in terms of embracing efficiency. But one Dubai-based businessman is trying to change this.
Faizal Kottikollon, the founder of KEF Holdings, says that he has invested $100 million into a business whose aim is to dramatically reduce the time it takes to construct buildings through automation, while at the same time improving quality and reducing defects by carrying out work in controlled factory conditions.
Kottikollon, who founded and built the Emirates Technocasting business in Sharjah, which was eventually sold to Tyco in a $400 million deal in 2012, created KEF Holdings in 2013. It is headquartered in the Dubai International Financial Centre, but much of its focus to date has been in India.
The firm spent more than two years creating the KEF Infra One Industrial Park at Krishnagiri in Tamil Nadu, India. It is a cluster of nine different factories producing all of the components required to build sections for even the most complex buildings before they are shipped off and assembled on site.
Designs are produced using building information modelling (BIM) software, with the data then used by machines that produce various building elements, including precast concrete sections and bathroom pods, as well as machined parts made from wood, stone, aluminium and other components.
The site, which began full operations in December 2016, now employs close to 1,500 staff, Kottikollon told Zawya in a telephone interview last week.
Seeing is believing
"The key is the design has to be perfect," Kottikollon explained. "We have this clash detection system in the BIM model. Also, we have a virtual reality experience centre in the factory where customers can experience the whole design before we build. Once it is signed off and it is allocated to each factory, its pure co-ordination work."
To date, the process has been used to build a 400,000 square foot hospital owned by a foundation run by Kottikollon and his wife, a 500,000 sq ft building for Infosys, 65 government schools in Kerala and a 1.7 million sq ft commercial building for an embassy.
It is currently being used to build a series of affordable canteens (named Indira Canteens after former prime minister Indira Gandhi) for the regional government in Kanataka, with 250 out of 450 buildings already completed.
It will also be used to build a new, 2 million sq ft shopping mall in Lucknow in northern India, which is being built for Abu Dhabi-based Lulu International.
The Lulu store will follow the opening of the first of three new satellite plants by KEF Holding, which will each cost $15 million to build. The plants, which are set to open in Lucknow by the summer of this year, in Andhra Pradesh facility by the end of this year and in Maharashtra by the first quarter of next year, will all support the main Kefra One facility by producing heavier concrete sections closer to source markets.
The company confirmed in an email to Zawya that it expects to achieve a turnover of $200 million for its current financial year, which ends in March, but that it already has $200 million of orders booked for 2018, including the Lulu mall in Lucknow. It is forecasting that revenue in its 2018-19 financial year will double to $400 million.
Kottikollon said that each facility can also be expanded in the future to add other components if the KEF Infra One site gets close to capacity.
Need for speed
He argued that the business had grown in India because of the speed of construction that it offers to clients, meaning they receive a quicker return on investments made.
"For example, the hospital what we have built under conventional construction would have taken five years. We have done it in 18 months in a one-shift operation. Also, it's a clean construction. Mainly, its assembly, so no environmental pollution, no health and safety issues,” Kottikollon said.
While the company announced plans for a similar prefabrication facility in Jebel Ali back in 2015, he said this will now not commence until next year, at the earliest.
"The (Jebel Ali) factory is not yet started because we wanted to stabilise in India and then come over here," Kottikollon said.
When asked about a potential start date for any Gulf factory, he added "maybe 2019".
The McKinsey report published last year argued that the construction industry "has an intractable productivity problem".
It said that about $10 trillion was spent on construction-related goods and services every year, but that digitisation and labour productivity improvements could boost value in the sector by $1.6 trillion, which is equivalent to adding 2 percent to global GDP.
It also said the average productivity growth per worker of 1 percent per year in construction, compared with the 2.8 percent per year achieved in the wider global economy, and 3.6 percent per year in manufacturing, where automation has played a much greater role.
With innovations such as those being developed by KEF Holdings, hopefully by the time the next McKinsey report is commissioned, things will have improved.
(Reporting by Michael Fahy; Editing by Shane McGinley)
(michael.fahy@thomsonreuters.com)
Our Standards: The Thomson Reuters Trust Principles
Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.
© ZAWYA 2018
This is particularly true in the Gulf region, where a reliance on cheap, imported labour has been seen as a disincentive in terms of embracing efficiency. But one Dubai-based businessman is trying to change this.
Faizal Kottikollon, the founder of KEF Holdings, says that he has invested $100 million into a business whose aim is to dramatically reduce the time it takes to construct buildings through automation, while at the same time improving quality and reducing defects by carrying out work in controlled factory conditions.
Kottikollon, who founded and built the Emirates Technocasting business in Sharjah, which was eventually sold to Tyco in a $400 million deal in 2012, created KEF Holdings in 2013. It is headquartered in the Dubai International Financial Centre, but much of its focus to date has been in India.
The firm spent more than two years creating the KEF Infra One Industrial Park at Krishnagiri in Tamil Nadu, India. It is a cluster of nine different factories producing all of the components required to build sections for even the most complex buildings before they are shipped off and assembled on site.
Designs are produced using building information modelling (BIM) software, with the data then used by machines that produce various building elements, including precast concrete sections and bathroom pods, as well as machined parts made from wood, stone, aluminium and other components.
The site, which began full operations in December 2016, now employs close to 1,500 staff, Kottikollon told Zawya in a telephone interview last week.
Seeing is believing
"The key is the design has to be perfect," Kottikollon explained. "We have this clash detection system in the BIM model. Also, we have a virtual reality experience centre in the factory where customers can experience the whole design before we build. Once it is signed off and it is allocated to each factory, its pure co-ordination work."
To date, the process has been used to build a 400,000 square foot hospital owned by a foundation run by Kottikollon and his wife, a 500,000 sq ft building for Infosys, 65 government schools in Kerala and a 1.7 million sq ft commercial building for an embassy.
It is currently being used to build a series of affordable canteens (named Indira Canteens after former prime minister Indira Gandhi) for the regional government in Kanataka, with 250 out of 450 buildings already completed.
It will also be used to build a new, 2 million sq ft shopping mall in Lucknow in northern India, which is being built for Abu Dhabi-based Lulu International.
The Lulu store will follow the opening of the first of three new satellite plants by KEF Holding, which will each cost $15 million to build. The plants, which are set to open in Lucknow by the summer of this year, in Andhra Pradesh facility by the end of this year and in Maharashtra by the first quarter of next year, will all support the main Kefra One facility by producing heavier concrete sections closer to source markets.
The company confirmed in an email to Zawya that it expects to achieve a turnover of $200 million for its current financial year, which ends in March, but that it already has $200 million of orders booked for 2018, including the Lulu mall in Lucknow. It is forecasting that revenue in its 2018-19 financial year will double to $400 million.
Kottikollon said that each facility can also be expanded in the future to add other components if the KEF Infra One site gets close to capacity.
Need for speed
He argued that the business had grown in India because of the speed of construction that it offers to clients, meaning they receive a quicker return on investments made.
"For example, the hospital what we have built under conventional construction would have taken five years. We have done it in 18 months in a one-shift operation. Also, it's a clean construction. Mainly, its assembly, so no environmental pollution, no health and safety issues,” Kottikollon said.
While the company announced plans for a similar prefabrication facility in Jebel Ali back in 2015, he said this will now not commence until next year, at the earliest.
"The (Jebel Ali) factory is not yet started because we wanted to stabilise in India and then come over here," Kottikollon said.
When asked about a potential start date for any Gulf factory, he added "maybe 2019".
The McKinsey report published last year argued that the construction industry "has an intractable productivity problem".
It said that about $10 trillion was spent on construction-related goods and services every year, but that digitisation and labour productivity improvements could boost value in the sector by $1.6 trillion, which is equivalent to adding 2 percent to global GDP.
It also said the average productivity growth per worker of 1 percent per year in construction, compared with the 2.8 percent per year achieved in the wider global economy, and 3.6 percent per year in manufacturing, where automation has played a much greater role.
With innovations such as those being developed by KEF Holdings, hopefully by the time the next McKinsey report is commissioned, things will have improved.
(Reporting by Michael Fahy; Editing by Shane McGinley)
(michael.fahy@thomsonreuters.com)
Our Standards: The Thomson Reuters Trust Principles
Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.
© ZAWYA 2018
