Katerra Plant Buyer Acquires Modular Facility in Pennsylvania, Targets Multi-Family Construction

Diving brief:

• Volumetric Building Companies, the Philadelphia-based modular building company, recently acquired a manufacturing facility in Berwick, Pennsylvania to help expand its operations in the Northeastern United States, according to a company announcement.
• The facility, which was previously used by another modular builder but closed since 2017, has more than 356,000 square feet of space and is expected to generate more than 200 new jobs, according to the statement.
• VBC CEO Vaughan Buckley said production at the facility will focus on manufacturing steel and wood multi-family housing for use in buildings ranging from three to 20 stories.

Overview of the dive:

VBC merged with Poland-based modular steel builder Polcom early 2022 and also purchased the assets of Katerra in Tracy, Calif., for $21.25 million last year.

Multifamily markets are the largest and fastest growing segment of the modular industry, growing from 7% of production in 2019 to nearly 21% in 2020, according to the Modular Building Institute 2021 Annual Report on modular construction.

This is largely due to high rents and lack of affordable housing in the multi-family sector.

“There is a critical need to increase the availability of housing in high density urban areas where we are seeing soaring rental prices and complaints of poor quality due to intermittent construction and supply chain issues. during the pandemic,” Buckley said in the Release.

Buckley identified Berwick, Pennsylvania as a prime location to serve dense urban markets in the northeast, such as Philadelphia, New York and Washington, DC. The new presence in Berwick puts VBC within half a day’s drive of these major cities. Buckley declined to share the cost of the acquisition.

“The decision to make Berwick our newest factory location came after a detailed review of the strategic, logistical and environmental benefits of a central location for some of the nation’s most populous metropolitan areas,” Buckley said. “With the infrastructure already in place in a previous Modular Enterprise facility, we were also attracted to the fact that we would not be starting from scratch. We can quickly start production within the next 60 days.

The facility will help reduce transportation emissions, according to Buckley. Modular construction requires fewer machines to operate, and the new plant’s proximity to major urban centers translates to fewer emissions during the delivery process.

“We know that future emissions regulations are likely, but we don’t want to wait for them to be instituted and instead challenge ourselves to be innovative at every level,” Buckley said. “Durability and speed are at the forefront of our decisions.”

VBC focuses on multi-family modular construction and has completed more than two dozen projects in the US and UK, from a 237 apartment building in Philadelphia to a development of chalet-style townhouses and apartments. in Colorado, according to the statement.