The Chinese mainland's construction business is gaining momentum, riding on the worldwide bandwagon of construction industrialization.
The proliferation of industrialized construction, which involves extensive use of prefabricated factory-finished large-sized elements, a mechanized and continuously flowing process of assembly, and installation of structures made of prefabricated structures, has fired people's imagination of an environmentally-friendly method to increase labor productivity and construction efficiency, industry experts said.
Wang Xiaoguang, assistant managing director of China State Construction International Holdings Ltd, said the State-owned construction powerhouse has been pushing forward industrialization of construction on the mainland since 2013, especially in fast developing areas.
In a report on urban planning and construction management in December last year, the State Council said that, in the next 10 years, prefabricated building is expected to feature in more than 30 percent of new constructions.
The brainchild of Wang, a prefabricated plant of China State Construction in Hefei, capital city of Anhui province, currently is the only one of its kind in the country with a comprehensive industry chain, including research, design and manufacturing of prefabricated parts.
The chief advantage of construction industrialization, he said, is that it's environmentally friendly. Besides, the new model improves construction efficiency and quality, cuts at least 50 percent of labor at a construction site, and saves maintenance costs.
According to Wang, the construction cost of each square meter using the industrialization approach is 5 to 6 percent higher, but the total social cost is eliminated.
China State Construction invested in two phases of the Hefei plant for prefabrication, which can provide materials for areas within an economic radius of 200 kilometers. The first phase, with an area of 144 mu (96,000 square meters), is already in operation, with an input of nearly 600 million yuan ($88.2 million). The second phase, with a field of over 100 mu, is still being programmed and construction is expected to start in January next year.
The company plans to build more prefabrication bases on the mainland in the future.
Hefei, with a population of over 7 million, has been developing fast in recent years, with the average price of Hefei residential properties having plunged 40.5 percent in the past year, according to Citi Research and the National Bureau of Statistics.
Xue Shen, general manager at China State Construction International Investment (Anhui) Ltd, said their total investment in Anhui has reached 15 billion yuan, with housing projects of 3 million square meters and highway projects covering 60 kilometers under construction this year. He said Anhui is one of the critical pilot provinces for implementing the government's highly advanced public-private partnership (PPP) projects and the return on investment is usually less than the cost of funding. The group currently has PPP contracts worth more than 40 billion yuan.
China State Construction secured new contracts worth a total of HK$23.39 billion in the first half of the year, while the value of contracts yet to be completed amounted to HK$107 billion as of September this year.