Novabuild eco-construction cluster

Olivier CORALLO Tanguy LE FLOC’H

BI  Norwegian  Business  School  Oslo  14-­‐04-­‐2015  

GRA 6829 Strategies for Industrial Competitiveness  

Founded in 2003

Eco-construction cluster

250 partners

French

Pays de la Loire

Eco-construction Cluster:

NOVABUILD

AGENDA

①  Economic context ② Construction: a sector in crisis ③ Competition in construction industry ④  The Eco-construction industry ⑤ Novabuild Cluster presentation ⑥ Novabuild: Missions and Services ⑦ Actors involved: Cluster Map ⑧  Report of activities ⑨ Diamond Model

Economic Context

66M

€ 2052 Bn

+ 0.4% (2014)

10.4%

3%

92.2% debt

+0.7%

>  Representing 5% of the country GDP >  1.3 million of workers >  513,000 firms >  25% of the overall investments in France

over the 2014 year >  Global turnover of €282 billion

French Construction Sector

Acrtivities breakdown: part of construction turnover Buildings construction

Civil engineering

Demolition and site preparing

Electric installation, plumbing and other installation work Completion work

Other specialized works

>  53.9% of public contracts

>  24.6% of residential

>  21.5% of non-residential

Construction: a sector in crisis

80

90

100

110

Production index in French construction (2005 = 100)

Production index (2005 = 100)

French concrete production index (2010 = 100)

1990 2000 2010

Deep  sector  crisis  

2008

Growth   Crisis   Forecasted  upturn  

Historic trend of the sector … In crisis since 2008 but with some signs of upturn

>  Sector completely slowed down by the 2008 financial crisis: 8% of activity decrease on 2009 year

>  3 to 4% of decline in public supply >  1/3 of french failures in this sector

>  Massive investment plan designed by the government in 2014 >  4.4% of CAGR forecasted between 2013 and 2018 >  Stabilized margins

Competition within the construction industry Threat of New Entrants >  Barriers to entry:

-  Public and non-residential construction (important groups): very high due to need for expansive equipment and expert workforce

-  Very small for SME wanting to compete with the artisans of this industry

>  Very difficult for new firms to survive

Threat of Substitutes >  No real threat of substitutes for the

construction sector

Bargaining Power of Buyers >  Local demand for SME: weak bargaining

power as the buyers are small and numerous

>  Call for tenders (important projects): Important bargaining power of buyers which are very price sensitive and have several suppliers

Bargaining Power of Suppliers >  Raw material suppliers: hard competition that

makes their bargaining power weak >  Specialized markets (ex: machinery): few

suppl iers that benefit f rom a bigger bargaining power

>  Subcontractors: weak bargaining power due to numerous actors

Competitive Rivalry >  Market divided between big groups

(important contracts) and SME >  Lot of small companies: very dense

network >  Prices of raw material and exit costs rising >  Demand contraction since the crisis

Evolution of the number of firms in the sector

€M Turnover Profit Employees European

rank Vinci 38,703 1,906 185,300 1 Bouygues 33,100 807 127,470 3 Eiffage 13,987 1,347 66,022 6 Colas 12,396 604 62,800 8

Principal french construction firms

Evolution of gross margins in the sector

The eco-construction subindustry

An ecological way of building: >  Use of biosourced and local

materials >  Optimal use of renewable

energies >  Better management of

water resources

Several activities: >  Project managers >  Architects >  Builders >  Product manufacturers >  Maintenance professional

? How to define the eco-construction sector?

>  High environmental quality buildings

>  Bioclimatic buildings

>  Low-consumption buildings

>  Passive energy buildings

>  Positive energy buildings

Specific buildings and green projects

A bumping market

Rising demand in the United States: >  A jump of 50 % over the 2010 year >  A market more than $135 Bn worth for the

residential sector, $120 Bn to $145 Bn for the non-residential

>  25% of new buildings are greenly constructed

A market with a great potential in France: >  2/3 of the houses constructed before

1975: an important renovation potential >  Strong regulations that makes green

building necessarily for those renovations representing €600 Bn for the next 40 years

Novabuild  Cluster  Presentation  

Novabuild Cluster Presentation

Novabuild

•  Created in 2003, new division

and renamed in 2012

•  Region Pays de la Loire Ø  3,6M inhabitants

Ø  5th french Region in GDP rankings

•  Public initiative: PRI Program

•  ADEME

•  Key Figures

•  History

•  Network « In’Novabuild »

Ø  + 250 members: companies,

associations, institutions, universities)

•  Permanent team of 5

•  Board of Directors from the business

area

Ø  President Laurent ROSSEZ

Ø  7 Vice-Presidents

•  Location

Cluster’s  Missions  

Mission: Gathering the actors of the industry to share their skills, experience and knowledge and face the future

challenges

• Issues & Challenges

•  Innovation

•  Change Management

•  Skills & Knowledge

• Key Strategies / Themes

•  Modeling & Digitizing the process

•  Health & Wellbeing

•  Evolving facilities

•  Products life cycle Optimization & Industrialization

•  Circular Economy

•  Collaboration with local marine cluster (St-Nazaire)

•  Improving the identification of needs & trends

In’Novabuild: Services Provided

> The members directory

> Reports related to the industry

> Technical guidelines or tips

> Newsletters, Media reviews

> Conferences, Fair trades, Traineeships

> Different themes and formats

> Job offers publications

Cluster  Map  

>  Raw material manufacturer >  Architects/designers >  Specific equipment distributors >  Constructors- artisans >  Real estate developers >  Certifications/Label agencies

Novabuild’s eco-construction firms

>  State – French Government >  Regional council >  Municipalities (urbanism dpt.) >  Social landlords >  CCI (Chamber of Business and

Industry)

Public authorities

>  Transportation services >  Banks – private investors >  Insurance companies >  Consulting and audit firms

Related Industry

Partner universities - schools >  Nantes University >  Ecole Supérieure du Bois >  ICAM, IUT Nantes St-Nazaire >  Polytech Nantes

+ Praxibat program

Education

Private labs >  CERIB, CSTB, Ocean Vital, LASIE,

IRSTV, INNOBSYS, GEM, IFSTTAR

+ public research reports

Research

>  Regulation >  Collaboration for

development >  Tender call

>  Projects, programs >  Jobs offers >  Knowledge >  Innovations

>  Services >  B2B >  Strategy

>  Innovation >  Material >  New solutions >  Energy perf.

Regulations

Grants

Grants

Collaboration/sharing facilities

Collaboration

Dynamic and evolution

31 events à 970 participants

60 professional consultants

20 scientific advisors: research labs

70 new members

Innovative Projects Contest

TIPEE ID+

Nova’TP >  Activity report 2013 >  Current projects &

programs

Projects in collaboration with universities, high schools,

private schools…

Summary  of  Novabuild  Framework:  Diamond  Model  

Demand •  Landlords (social

housings) •  Public/municipal projects •  Main criteria are first

price and location •  Economic yield >

Ecologic yield for many customers

Competition •  Industry less impacted by

the crisis than others •  New companies are still

entering the market •  Nantes ≅ 100 real estate

developers

Cluster conditions •  Public: ADEME + Region •  Linked to other clusters •  Strong links with labs and

education •  Various types of

members

Factor conditions •  Expensive raw material •  Importance of:

§  Knowledge §  Innovation §  Skills §  Regulations, norms §  Certifications/labels

Government

≠ level of public authorities

Grants for buyers + searchers

Building permit

Investment, public exp.

Chance

Timing:

Expansion of the industry + Ecological transition

Projects like mini power plants grids

Society

Ecology as a political issue

Trendy ? Experimentations, not a praxis

¾ houses < 1975 = mature Mkt.

Culture

Not as important as in other countries (Holland, Scandinavia…)

Future perspectives and recomendations

A market full of opportunities

>  75% of french houses will need to be repaired in the years to come: green solutions should be adopted

>  Help to homologate innovations: a decisive competitive advantage

>  Novabuild is pioneer in numerical technologies of construction

>  Houses will become micro-energy-generators

>  They will be integrated in a peer-to-peer network of energy (smart grids technologies)

>  Positive-consumption houses will be needed

Novabuild should be a provider for all the solutions of those energy networks

One strategic turn: the participation in the « third industrial revolution »

Thank you for your attention !