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All posts for 2011

A new language for long term investment

Posted on:  15 December 2011
By:  Colin Yeates

After many challenging and enjoyable years working within the roofing business I find myself discussing the subject of 'warranty' more and more. Never has this word been more poignant in our day-to-day discussions, or for investors' pockets.

Colin Yeates

Gone are the days when we used to supply mainly carbon steel fixings, maybe with a SELA head. Rarely was life expectancy asked about, "10 years will do" was the norm, and we shipped millions without question. Post recession things have changed, 25 years plus is now very typical for a building's design and "costing" life, and for this, a warranted product is essential.

There is no doubt that this has been driven by the increasingly onerous Building Regulations and the concerns of the building owner and/or landlord whose asset value, and/or rental value, is closely tied to regulation compliance. Too many have paid high prices for a poorly performing building; lessons sadly are still being learnt. The investor and developer are increasingly looking for assurance that the structure will perform within Building Regulations and at least achieve its investment and cost plan throughout its lifetime. Therefore, it is increasingly vital that the products being installed combine to facilitate Part L criteria such as reduced air leakage, and be able to stand the test of time and perform structurally and aesthetically for the full 25 years investment period.

It is then no surprise that the demand for a genuine performance warranty from contractors is drastically on the increase and will influence tender acceptance. This is becoming a part of the pre qualification process. While some contractors may be happy to offer any warranty in order to gain advantage, street wise developers will probe to ensure that the warranty is valid and securely backed, not just a simple headline.

So, what can the responsible contractor do? My advice is to seek detailed equivalent warranties from the manufacturers; the devil is in the detail, we all know this! Taking just a few minutes to go over a short check list will minimise potential liabilities for the solid and successful contracting business.

  • Is the product and warranty supplied by a manufacturer or a re seller?
  • Check who is really manufacturing your purchase and to what quality standards and warranty term? 
  • A number of re sellers "manufacture" a very limited range in the UK and source the bulk of their products from lower cost sources around the globe. Dig deep and check the paper warranty from a UK manufacturer really covers product that is out sourced. 
  • Which business is responsible for the warranty liability?
  • What is the "full" warranty term? Is it decreasing liability?
  • Does the issuing business really have the financial strength to support the warranty? If not is it really worthless?
  • Are there limitations in the event the warranty is invoked? E.G. claims are limited to the value of product supplied on the project. Claims are limited to the free issue of replacement fasteners or sealant only. There is some sort of excess due by the contractor?
  • Are consequential costs covered in any way?
  • Beware insurance backed warranties, this is a minefield, most companies fall back on product liability insurance, very, very few have specific insurance for a warranty and those that really do have cover for a max of 10 year periods.

I appreciate that small components such as fasteners are often seen as an insignificant part of the total value of the materials purchased, yet I cannot reiterate enough the essential role they play in sustaining the building's long term integrity.

It remains bewildering therefore, given the lesser value of these components, that contractors significantly increase their total risk in order to save only a few pence short term. The pursuit of profit for further investment in any business is an obvious driver, but one that must be balanced with common sense risk management decisions. Investors are trying to find ways to minimise their risk and building component warranties are a tool here to stay.

So even when times are tight and contracts are fiercely contested, we all need to think carefully about critical product specification compromise. Developers and management contractors will be scrutinising contracts and tenders ever more carefully, looking for unacceptable corner cutting; that competitive edge you think you hope to get may cost you much more than you save.

Have you had any similar experiences with warranties or building failures? It would be great to hear feedback on the challenges others face when matching Building Regulation criteria and cost so please share your thoughts below.

The envelope of survival

Posted on:  11 November 2011
By:  Colin Yeates

Just wondering, as I look down from my office window at the builders merchants yard next door which is half empty, what we have to do to get the industry back constructing again, and what contractors (and us) need to look at to meet the challenges of these times.

Facade - Envelope of Survival

While the metal roofing and cladding industry remain in the current change mode, it's adapt or die in many cases. This has been forced by the decline in demand for traditional metal roofing since the 2008 recession, so many contractors are turning to wider building envelope applications.

All of us should make the effort to evolve with the shifting market. Materials and architectural designs are becoming more complex as demand has become more sophisticated and manufacturing has developed to accommodate for a new era of design, and all with impressive aesthetic results. We are seeing the rise of the "envelope contractor".

Shed construction used to be our bread and butter. No longer – schools, hospitals, offices and larger domestic construction have filled the demand hole. Materials like glass are being specified more regularly due to its visual appeal and ability to add new dimensions within construction, including rainscreens.

Terracotta materials, used worldwide for many years are now much more in demand across the UK. Their aesthetics and durability are valued, specifically in façades and rainscreens. Many lead OEMs have innovated in this sector bringing a wide range of façade choice.

So as well as protecting the direct exterior of a building from weather and other extremities, trends in modern architecture have made rainscreen systems as fashionable as they are functional. This has resulted in their increased specification, particularly within the growing retrofit market.

More of us than ever have been involved in refurbishment than new build projects during the last 12 to 18 month. This is because there are many advantages: greater cost savings; increased speed to market due to the reduced demolition time; fluid cash flow as the building can usually remain open and functioning during work; original building features can be retained; and projects are usually more sustainable with a lower impact on the environment.

Those roofing contractors who have benefited from this shift have done so by expanding their knowledge. The latest generation of systems, with more skills to design and install them correctly, are required to deliver an increasingly complex outer shell. The contractor must ensure a building performs and functions efficiently and meets the necessary standards and regulations.

We know that EPCs (Energy Performance Certificates) and Building Regulations must be adhered to in any instance, but in a retrofit project the most likely area in which a building may fail is at the interface. So if you are an envelope contractor, you must become an expert not only in your specialist area but in all elements of the building envelope.

For example, the installation of a rainscreen façade, as opposed to a composite panel or typical built up construction, differs in application and requires a different skill set. Without the skills and knowledge required to deliver these progressively more complex specifications, you could lose out on vital business.

You are not alone. Organisations like The Rainscreen Association (TRA), which has very recently been launched, have been created to provide contractors and installers with guidance on industry best practice and training programmes to help them keep up to date. Constituted within the National Federation of Roofing Contractors (NFRC), the launch of the TRA training programmes will help contractors to qualify to an NVQ level.

You need this kind of formal training. If you install rainscreen and façade systems incorrectly, it can have a negative impact on your business.

For example, you must be aware that carbon steel fasteners must not be used with aluminium sheeting or structural elements. The likelihood of electrolytic reaction between the dissimilar metals may lead to rapid corrosion of the fastener; it is only austenitic stainless steel fasteners which can be used alongside aluminium. Get this wrong and the safety of the building could be at risk.

Alignment of façades is another installation discipline where you need the insight that training can provide. A poorly aligned façade can be an expensive disaster.

Only if you equip yourself with the proper knowledge and expertise will you be able to compete within the new total envelope business. Increasing sophistication and the need for improved quality of build is what is in front of our industry; knowhow and minimising the risk of getting it wrong through innovation and training will help.