Skylines filled with plyscrapers

timber_tower

Today, we’re looking at tall, wooden buildings – sometimes referred to as “plyscrapers”. However, they don’t use the type of plywood you’re likely to be familiar with. Modern, high-strength engineered timber panels can be used as an alternative to concrete and steel. In the last five years, 17 buildings between 7 and 14 stories have been built globally, using mass timber construction.  There’s even a giant, 80-storey one planned in London.

This is an industry with a strong investment case. Interest in mass timber is growing exponentially, and these highly-investable trends are just what we like to see in Exponential Investor.

Today, I’m interviewing Robert Glowinski, CEO of the American Wood Council (AWC) trade association.  AWC’s staff members are doing the research and development needed to update U.S. building codes and enable construction of tall wood buildings.  Robert has been at the American Wood Council for nearly 40 years.

AL – Hi Robert. Can you tell me why the American Wood Council is important? Isn’t it just another trade lobby?

RG – AWC is a national trade association for the wood industry. We are the one industry association where manufacturers of all the different structural wood products come together – so we’re basically representing an entire industry.  Bearing in mind how rapidly technology is changing in this area, this makes it a pretty exciting place to be. We work to make sure the wood homes we live in, and the buildings we work in and visit, are safe and appropriately recognized by building codes. That entails developing state-of-the-art engineering data, technology and standards for wood products to assure their safe and efficient design.

The future of plyscrapers?

AL – OK, I’ve got it – you’re basically working to unlock the future of plyscrapers, right?  So, help me understand. what does a tall wood building look like?

RG – Depending on the design, you might not be able to distinguish a mass timber building from a concrete-and-steel skyscraper, because the exterior wall design may be identical with all the timber on the inside. In other cases, designers want to showcase the beauty and warmth of wood, and find ways to make sure it stands out.

AL – So why the attention on tall wood buildings?

RG – The simplest answer is the environmental benefits. There are all sorts of environmental advantages that come with building with wood – notably including removal of atmospheric CO2. By contrast, the International Energy Agency says that cement production is responsible for approximately 5 percent of the human-caused CO2 emissions annually. US and global population is increasing and, therefore, so are our needs for housing. As people are becoming more environmentally conscious, they’re looking for more sustainable building solutions. The use of wood products, including innovative mass timber, encourages sustainable forestry which captures large amounts of carbon, thereby reducing greenhouse emissions through sequestration and the substitution of wood for more carbon-intensive products.

AL – Cutting down our emissions sounds great. But are mass timber buildings as safe as concrete and steel buildings?

RG – Well for starters, Europe and Canada have been successfully building mass timber buildings for at least a dozen years that we can look to as examples.  There’s a block of flats in Hackney, UK that provide a great example. Through their years of research and real-life experience, these architects and developers have shown that wood buildings are structurally quite sound, safe and ductile. This characteristic means wood buildings can be designed to withstand the effects of major wind and seismic events. However, the most obvious concern is of course fire. It’s important to understand that for these taller buildings, mass timber is not the same as lightweight wood construction, which is used in traditional buildings. Mass timber buildings, like their large log-framed predecessors, are much more resistant to flame.  When they do light, they actually withstand fire very well.  This is because they develop a char layer on the outside, while retaining structural strength. Initial fire tests show that mass timber easily meets and exceeds the two-hour fire ratings required of all materials in these types of buildings.

AL –Some people are going to be worried about an increased demand for wood putting pressure on forests.

RG – It would be a terrible business model if manufacturers didn’t ensure the availability of their most basic resource for the long term. In the United States, twice as much wood is grown than is harvested, and what is harvested is a very small percentage of the total number of growing trees. Only 2.4 percent of all U.S. trees were harvested in 2014, and between 2008 and 2013 approximately 40% more wood was grown than was harvested. Actually, the biggest deforestation threat in the U.S. comes from the loss of markets for wood products when working forests are converted to non-forest uses, such as from commercial development and encroachment. Demand for wood products encourages forest owners to keep their lands as forests, rather than selling it off for development. This is important because U.S. forests offset about 15 percent of all U.S. carbon emissions each year and that continues to increase. North American forests are sustainably managed, providing good controls for when demand for forest products increases.

Pros and Cons of Plyscrapers

AL – What are the pros and cons of using wood?

RG – A constraint right now in the United States is that there is only one company manufacturing structural mass timber panels, with another moving toward certification. While we’re seeing more companies express interest in developing a production capability, we’re not there yet. As availability increases, we expect the cost of mass timber construction to be equal to, or considerably less than, other building alternatives. However, there are other factors when considering costs for a project. For instance, mass timber buildings can be constructed on a significantly shorter timeline because of prefabrication and quick on-site assembly time. This is a big advantage when land costs are high – because developers get a faster return.  The speed differences can be very big – we’ve seen a floor a day erected with mass timber buildings on some construction sites. One alternative, depending on design, is use of nail-laminated timber (NLT). As one type of mass timber construction, NLT provides many of the same advantages as prefabricated mass timber panels, but can be constructed using ordinary lumber.

AL – Why haven’t we seen plyscrapers before?

RG – Until now, we didn’t have the technology to construct mass timber buildings. Now, we have the technology – and some high-profile advocates.  For example, architects Michael Green, Joe Mayo and Susan Jones are interested in pursuing this kind of construction – and we’re seeing increased interest.

AL – So you see a future with skylines filled with plyscrapers?

RG – Wood is one of the oldest building materials available, but with these innovative products, there is no reason to relegate it to rural and suburban construction. Tall wood building construction will benefit sustainability in our urban areas, and at the same time promote rural prosperity through jobs in small towns where our industry is most active. In fact, many of these areas of rural America have yet to recover from the recession. With the many benefits of tall wood buildings, that now dot the skylines of Europe, Canada and Australia, we have every reason to look forward to these buildings doing the same in the United States.

AL – What are other cool technologies you think will disrupt construction?

RG  – Well firstly, I think that modular construction is a really exciting area.  We’re increasingly seeing building manufactured off-site, then brought in for final assembly from prefabricated components.  Some tall wood buildings are built this way, but that’s just one application of this approach.

Secondly, IT is really making waves in the construction industry.  Of course, building sites are embracing digital technology – but also there are many exciting new applications of integrated software for building operations, after construction is complete.  This is becoming more notable in the residential space, and some of these applications we are just starting to see. Homeowners will be soon be able to control everything in their space from their smart phones – not just heating, but lighting, water usage, security, windows, shading, and a host of other things.

I hope you found the idea of a future skyline filled with wooden towers as eye-opening as I did.  Do you think this vision is realistic?  My personal view is that this is the thin end of a very thick wedge – and we can expect real, sustainable growth in this sector.

Category: Commodities

Copyright © Southbank Investment Research 2017. All rights reserved

Southbank Investment Research. Registered office: 2nd Floor, Crowne House, 56-58 Southwark Street, London, SE1 1UN. Registered in England and Wales with company no. 9539630 and VAT no. GB 629 7287 94.

Privacy & cookie policy | Terms and conditions | Top ↑