After winning Western Australia Innovator of the year 2016, and gaining extensive media exposure across print, online and radio platforms for its technology; the question on most investors’ mind is whether there will be a return on investment while providing a material competitive advantage for builders deploying this kind of technology in their construction projects.
Under the banner of 3D Printing technology, Fastbrick is building a commercial bricklaying machine named Hadrian X; with a capability of bricklaying around 1000 bricks per hour. This technology is currently 30% built and is scheduled to be tested commercially in late-2017 by building 10 houses for a builder in Perth, Western Australia.
Initial ROI calculation
Hadrian X has been touted to revolutionize the way houses are constructed by bringing a new level of speed, accuracy, safety, cost and waste management. Based on an indicative price of $2M per robot, which is capable of bricklaying about 1000 bricks per hour, brick layers aren’t wrong in thinking that they could soon be out of the profession. Based on an estimated salary of $1000 per day to lay an estimated 500 bricks ($2 per brick labour charge), the $2M price tag is equivalent to hiring 2000 bricklayers for a single day.
While an average 4x2x2 single storey house project does not require 2000 bricklayers to lay an estimated 15,000-20,000 bricks per house, hiring around 40 bricklayers could lay 20,000 bricks in a day, or 20 brick layers in two days will cost around $40,000 in labour. This is far below the $2M price tag, excluding maintenance costs
This indicates that the robotic bricklaying technology (if proven on a commercial scale) is not for builders who may be building a handful of houses, but may be viable for those who can build 50-75 houses or more in a reasonably short time-frame.
Material competitive advantage
While Fastbrick has touted that it could deliver competitive advantage in the areas of: labour shortages, time sensitivities due to climate, human errors and inaccuracy, high material and labour costs, and stringent occupational health and safety regulation; ultimately the value proposition of delivering a more affordable, quality, and variety of house designs with a quicker build time to home owners remains to be seen.
Given Fastbrick has only built 30% of the Hadrian X technology, which is yet to be proven on a commercial scale to lay 1000 bricks with accuracy, it is highly speculative as the company has no customers, thereby no earnings and heavily relies on cash funding from investors. It is currently funded through to 2018 and therefore it is extremely crucial for the Hadrian X technology to be completed by the end of 2017, proven on a commercial scale and have at least one or two paying customer to ensure Fastbrick has a bright future in 2018/19 and beyond.
Wil Liam Lim holds no positions in any of the above mentioned companies