"Fast Construction and Recycling... The Era of Modular Building Arrives"

Alleviating Aging Population, Improving Productivity, and Shortening Air Time Effects Are Significant
"Direction to Aim Considering Skilled Technician Supply, etc."
Calls for Establishing a National-Level Mid- to Long-Term Strategy

[Asia Economy Reporter Yuri Kim] Modular construction, which has recently regained attention mainly in the housing sector, is being recognized as one of the innovative methods in the construction industry. In particular, interest in its applicability is growing as it is known that the modular construction method was applied to the large-scale emergency specialized hospital in Wuhan, China, which was built in just ten days and became a hot topic.

Modular construction refers to a method of assembling panels and block-type structures manufactured in factories on-site. It is expected to reduce on-site labor, improve productivity, and shorten construction periods.

On the 6th, the Korea Construction Industry Research Institute released a research report titled "Modular Construction and Directions for Building Business Models for Companies," stating, "Modular construction is one of several alternatives that can be chosen to improve productivity and innovate procurement processes in the construction industry. Considering the aging of skilled workers, the decline in youth inflow, and productivity stagnation faced by our construction industry, it is a direction the industry should aim for in the mid to long term."

The report analyzes that benchmarking overseas cases is necessary in areas such as securing capabilities required for modular transition, inducing investment in production facilities through education and tax benefits, and presenting mid- to long-term procurement plans.

In Singapore and the United Kingdom, recognizing the importance of modular construction to improve productivity in the construction industry, national-level policies for "modular transition" are being promoted.

Singapore is fostering the modular sector as part of its "Construction Industry Transformation Plan," aiming to procure 40% of public construction projects through modular methods by this year and to cultivate 35,000 related professionals.

The UK is also actively utilizing modular construction for rapid housing construction and infrastructure supply. To facilitate construction companies' transition to modular, it supports the use of housing construction funds, provides tax benefits to companies investing in modular technology development, and promotes improvements in existing construction guarantee systems, procurement methods, and business models that act as obstacles to the spread of modular construction.

As modular construction transforms the construction production process, overseas companies have established various business models expanding along the value chain of planning, design, procurement, and construction. However, current domestic procurement systems, contract methods, and design standards impose many restrictions on the introduction of modular construction.

Citizen M, a global hotel chain based in the Netherlands, has adopted modular construction methods to shorten construction periods, reduce costs, and improve on-site inspection and maintenance efficiency for new hotel construction. It has digitized the entire supply chain to maximize procurement efficiency. Polcom Group, a Polish hotel modular specialist company, produces customized hotel modules for clients and has established a global supply chain.

The Korea Construction Industry Research Institute expects that with the spread of modular methods, companies performing modular construction projects will pursue internalization of capabilities for process efficiency and optimization, as well as strategic alliances. The institute categorized and presented business model types that procurers, design firms, module manufacturers, construction companies, and material producers can choose in the mid to long term from the perspective of value chain expansion, based on the expansion of modular construction application and the accumulation of companies' experience in modular construction projects.

Domestically, although there is a recent push to expand modular apartment supply led by the public sector, improvements in existing design standards, procurement methods, and other conditions are necessary to revitalize the market including the private sector. In the short term, construction companies should gradually strive to acquire modular construction capabilities to respond to industry conditions and achieve efficiency and optimization in production and procurement processes, according to the institute. Currently, related systems such as design and performance standards associated with modular construction are insufficient domestically. There are procurement systems centered on design and construction separation that are unsuitable for modular application. The institute diagnoses that institutional issues restricting the spread of modular construction need to be improved.

Heedae Park, a senior research fellow at the Korea Construction Industry Research Institute, said, "Currently, modular construction in Korea is focused only on the apartment sector using block-type structures," and emphasized, "A national-level mid- to long-term strategy is necessary for the industry's modular transition." He added, "Along with improvements in systems and standards to activate individual technologies, policy establishment and support from the perspective of building an ecosystem for smart construction industry should accompany this."

This content was produced with the assistance of AI translation services.