Over recent weeks there have been two articles in relation to prefab/modular construction.
The first is a positive one about the increasing use of shipping containers as housing and retail options, much to the delight of container companies like royal Wolf (article here). The second is a less positive piece on the collapse of ABT Construction, a prefabrication company that had performed significant projects in Auckland but appear to have ceased trading and paying bills mid-way through last year (article here).
There will always be other factors contributing to a company’s success or otherwise, but what stories like these indicate is the need for future planning in times of construction boom. One of the greatest risks facing companies in our industry is the risk of over-committing without having fully considered the implications.
While the old adage of ‘make hay…’ is still true it is also just as important to consider the:
- type of hay you are making;
- costs to make that hay;
- retail value of the hay; and
- timing of the cashflows from the hay.