Chinese builders pitch modular tech for giga-projects

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• Modular is offsite construction
• China has expertise in technique
• Middle East offers opportunity

Chinese contractors are leveraging their size and access to innovative construction techniques to lay claim to increasing numbers of projects in Saudi Arabia, as the kingdom’s massive development push puts pressure on resources.

Some $1.25 trillion in giga-projects, spanning the residential, commercial and hospitality sectors, are in the pipeline across the vast and arid Saudi landscape. 

The scale and ambition of the giga-projects are increasing pressure on prices and making it difficult for contractors to procure all the necessary materials. Hiring skilled labour and transporting the materials to the remote locations of the developments is also proving challenging.

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Modular, or offsite, construction in particular is no longer just an option for Saudi Arabia, according to Mansour Faried, chief engineer for China State Construction Engineering Corporation Middle East. Faried says it is essentially “mandatory” because of the efficiency it can bring to the construction process through standardisation and industrialisation.

Modular technology is one of the avenues that CSCEC, the world’s largest construction company, and other Chinese contractors are exploring as they expand across Saudi Arabia, the UAE and the wider Middle East.

Data shared by Faried at a CSCEC-hosted conference last week in Dubai showed that the Middle East represents 17.5 percent of the global construction market this year, with an estimated $2.8 trillion in volume, out of a total of nearly $16 trillion. 

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The boom in the kingdom, plus continued growth in Dubai and Abu Dhabi, are driving the regional industry, Faried told AGBI.

“This is also an area of the world where they are striving and craving for innovation and technology,” Faried said.

“It’s pushed by governments, it’s been written in policies. So this is where you can make something different, where you can make something new.

“So, from one side there is a market demand, there is a volume. There are also technology drivers. That’s why this particular area of the world is a huge focus for our company.”

Modular technology is already in use across many Saudi giga-projects, including at the Red Sea Global resorts, Qiddiya and Neom.

There’s a lot of push from Chinese contractors for innovative ways of delivery, including modularisation

Anas Bataw, adviser, PIF

Anas Bataw, an adviser to Saudi Arabia’s Public Investment Fund, who heads the fund’s committee for modular construction, said: “There’s plenty of modular projects, just not as many as we would like there to be.” 

Bataw, speaking to AGBI at the CSCEC conference, said that Chinese contractors were well established across the Middle East and in Saudi Arabia, and looking to grow further here.

“They have a vested interest in investing and creating an ecosystem, to bring in the experience that they’ve had from China and other places into the region, because they see the benefit of it,” Bataw said. 

“So, regardless of whether there are formal incentives from Saudi Arabia, or partnerships or collaboration, we see there’s a lot of push from the contractors who are Chinese for innovative ways of delivery, including through modularisation.”

The figures shared by CSCEC’s Faried at the conference showed that while the Middle East represents nearly a fifth of the global construction market, it makes up only 3 percent of the $103 billion modular industry. 

Both Faried and Bataw listed a lack of well-developed rules, specialised expertise, ad-hoc infrastructure and the regional construction industry’s traditional reluctance to embrace new technologies among the constraints to a more widespread embrace of offsite construction.

“PIF acknowledges the challenges that exist in modular and acknowledges the benefits modular can bring, and hence why there are efforts internally within PIF working very closely with the PIF entities to find ways to address these challenges,” Bataw said. 

“There are different strategies being rolled out. And yes, the aim is to grow, acknowledging the challenges that exist. So it’s not just rushing towards modularisation. We need to address things at a foundational level, in order for us to achieve modularisation the way we want to. “