Founded in Dublin in 1989, ESS Modular is an industry leader in modern methods of construction (MMC) in the UK and Ireland. In this Q&A, Paul Tierney - CEO and Ronan Smyth - Managing Director of ESS Modular share their thoughts on MMC and the future of the construction industry.
The business has seen significant growth in the last 18 months in response to market demand from both public and private sector for MMC, group turnover has grown from €60 to €95million and staff numbers have increased from 150 to 280 in Ireland and the UK. In March 2022, the company announced a significant development, when global construction specialist ISG acquired a majority stake in the business, providing ESS with a solid platform from which to deliver an ambitious growth plan.
Q: Do you think MMC has been fully embraced by the industry?
MMC has grown hugely in the last 10 years as clients begin to recognise its major advantages. We have seen a big shift across the sector to adopt, embrace and actively pursue MMC. In the UK, the Government have indicated a preference for MMC through the establishment of a number of dedicated MMC frameworks for education and healthcare projects, with the DfE alone investing £3billion in their UK framework.
Q: Can MMC and traditional construction co-exist?
Yes. In 2020, the annual turnover in construction from the EU-27 countries amounted to almost €1.7trillion, and will continue to rise, mostly driven by government spending on planned infrastructure projects. As a whole, the industry genuinely can't build fast enough. Our projects are focused around driving high levels of premanufactured value, but we still use a network of traditional subcontractors in our controlled factory environment, as opposed to transient labour moving between sites. We strongly believe that we need to stop looking at MMC as a separate industry, we should see it as a natural evolution of the construction industry.
Q: Do you think that the recent investment from ISG will help facilitate that?
Without a doubt it will. ISG is a leading global construction specialist and their investment in ESS makes a statement to the industry around the serious need for Tier One contractors to develop their service lines to include mmc. Our third manufacturing facility in Warrington is now up and running and once that's at capacity, we'll be looking for a further facility in the Southern region of the UK too. Alongside this, we're investing heavily in automation technologies in our two existing production facilities in Ireland. We've also recruited a record number of 150 people in the last 18 months, enhancing manufacturing, IT, marketing, design, people, and procurement teams, recruiting talented individuals, all driven by the same purpose, to find the better way of doing things.
Q: It all sounds very positive, but what challenges are you facing in the short/medium/long term?
There are challenges which we experience in the same way as traditional contractors. Hyper-inflation of costs is a very real issue, as are soaring costs in labour, building materials and transport, with the highest inflation seen on imported materials – the industry cannot simply just swallow the cost, nor can we move the costs onto our supply chain partners.
The restrictions around movements of materials and labour, initiated by Brexit, were exacerbated by the pandemic, but we have been working to mitigate them, by building supply chain frameworks, and providing our trusted partners with visibility of order book, to help facilitate continuity of supply. Despite the above we remain optimistic: increased public sector spending in MMC is really shining a light on the benefits of our industry and we're being approached by an increasing number of private sector clients who are looking at alternative method of delivery.
For more information visit: www.essmodular.com
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