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Homes for export; assembly required

A Chinese builder hopes to move his prefab, energy-efficient product into the U.S. market.

February 17, 2007|Evelyn Iritani | Times Staff Writer

BEIJING — In a dusty field on the outskirts of China's capital, Fan Zhi has built the American dream. The two-bedroom cottage comes with a front porch. The rocking chair is not included.

By capturing the attention of Americans weary of high heating bills and soaring construction costs, Fan hopes to turn this prefab home into the McBungalow of the home-building world. He says his energy-efficient product, which can be assembled in less than three hours, can withstand hurricane-strength winds and Southern California wildfires.

Fan shouldn't have to go overseas to seek his fortune. Burdened with some of the world's most polluted cities and a skyrocketing bill for imported fuel, the Chinese government has launched a multibillion-dollar energy-conservation campaign that includes tough restrictions for new construction.

But last week, Qiu Baoxing, the vice minister of construction, acknowledged that the government's efforts were failing because local officials weren't enforcing the laws. A survey by the Construction Ministry found that only 53% of new buildings were in compliance with the new energy-efficiency regulations, according to the local media.

Qiu ordered developers to reduce energy consumption for heating, lighting and air conditioning in all new buildings by 50% or they would risk losing their business licenses.

Fan, the founder of Beijing Taikong Panel Industry Corp., isn't optimistic that the government will win this battle. He estimated that it would be at least five to 10 years before there was a large market in China for his product, which costs about 20% more than those using traditional building materials. Since launching his home division last year, he has sold only a couple dozen units.

"Look at all those homes," he said, pointing to a skyline filled with high-rise buildings and construction cranes. "If you moved them to the United States or Britain, none of them would meet energy-efficiency standards."

That's why Fan is looking to America, where rising energy costs and growing environmental awareness have spurred interest in eco-friendly architecture. Employment costs also are high, increasing the attractiveness of prefabricated homes, which can be built quickly using minimal labor.

"Our major aim is to build a few world-class brands, just like BMW or Mercedes-Benz," said Fan, who has been playing host to a steady stream of foreign visitors since the state-run China Daily published an article about his company several weeks ago.

During a recent visit by a delegation from Mississippi and Florida, a crew of nine blue-jacketed workers at Fan's factory built a 680-square-foot home in less than three hours. A giant crane was used to swing the steel-framed panels into place, which were then bolted onto a concrete foundation. That home, sold for $31,500 to a Chinese buyer, will be dismantled and rebuilt in another part of Beijing.

Fan faces huge hurdles, including securing foreign government approvals for his unusual product. In the U.S., for example, homes must adhere to dozens of federal, state and local building codes.

Fan's homes are produced using a patented technology that layers foam cement and fiberglass netting to create a strong but relatively lightweight material.

Fan started out in commercial construction in 1993, but shrinking profit prompted him to move into home building last year. Residential real estate prices in China are exploding in spite of the government's efforts to slow the market by raising property taxes, placing restrictions on foreign home buyers and other measures. The average price of a single-family home in the capital last year topped $600,000, according to Beijing news reports.

Fan's finished homes aren't the cheapest on the market, selling for $37 to $49 a square foot in China, excluding land. He estimates that the price will double in the United States after taking into account shipping and some assembly costs.

But he pointed out that his building material offers substantial energy savings: A 7-inch-thick panel provides the same insulating capabilities as a 6-foot-thick brick wall. At an agricultural trade show in Beijing last summer, he built a zero-energy demonstration home using solar and wind power.

Homes made of concrete are gaining popularity in America, accounting for 17.9% of the overall market in 2005, an increase from 3% the previous year, said Jim Niehoff, an official with the Portland Cement Assn., a trade group based in Skokie, Ill. But precast concrete panels make up less than 1% of the total.

Niehoff said concrete homes might cost 3% to 5% more than conventionally built houses, but homeowners can save a significant amount in energy bills and insurance. In some areas, however, it can be difficult to find contractors skilled in this type of building, he added.

Fan's factory, which employs 400 people, is located in a suburb south of Beijing, where farmland is quickly being replaced by factories and high-rise apartment buildings.

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