SINGAPORE – Some weeks in an industrial area in Singapore, a public road fills up with as many as 20 illegally parked trailers loaded with building components.
These concrete components are meant for a construction site, where they will be stacked like “Lego pieces” to build homes and offices.
But contractors who ordered them have refused to take delivery because of building delays.
The factory that makes these concrete parts – known as an integrated construction and prefabrication hub (ICPH) – leaves them outside on the road at the risk of fines because it is cheaper to store them there.
“We used to get fined quite often (for the illegal parking),” said an executive from the ICPH, who added that the fines typically amount to about $100 per trailer.
“But we figured it was cheaper to be fined than to try and rent land on a temporary occupation licence, given how expensive and scarce land is here.”
Dealing with delivery bottlenecks and finding room for storage are some of the various challenges that come with running an ICPH here.
These multi-storey, high-tech factories use automated systems to produce precast components – concrete parts of a building like walls, facades, bathrooms and household shelters that are made off-site, delivered to construction sites and assembled there.
ICPHs can produce precast components two to three times faster than traditional open precast yards, where workers manually pour concrete into moulds.
But despite an ongoing construction boom, firms that run these ICPHs – which can cost over $100 million to build – say storage issues, competition from Malaysia and changes to government policies have made it difficult to turn a profit.
Their struggles illustrate some of the difficulties Singapore faces in boosting productivity in construction, which has long been dependent on foreign labour.
ICPHs were first launched in 2012 under the Government’s push to improve productivity in the construction sector and develop the local supply of precast components.
The Government had planned to have 10 of these facilities here by 2020.
But it has fallen short of its target, with only six ICPHs built here so far.
Industry enthusiasm to run these facilities also seems to have waned.
An ICPH in Kaki Bukit Road 6 had until recently been vacant for nearly two years, after two consecutive operators were wound up. A new operator was appointed in 2025, and the facility is expected to be operational by the end of the year, said a Building and Construction Authority (BCA) spokeswoman.
The last known public tenders for ICPH sites – for two such facilities in Jalan Gali Batu – were released by BCA in December 2019.
In response to queries, the BCA spokeswoman said there were no bids for the land tenders when they closed in 2020.
She added that this coincided with the economic uncertainty arising from the onset of the pandemic, which generally led businesses to be more cautious with major investments.
The integrated construction and prefabrication hub in Kaki Bukit Road 6 had until recently been vacant for nearly two years, after two consecutive operators were wound up.
ST PHOTO: KEVIN LIM
Asked if BCA intends to call any new tenders for ICPHs, or whether it has put such tenders on hold, the spokeswoman said the authority is monitoring the demand and supply of precast closely, and will work with other government agencies and the industry to release additional land resources if needed.
When ICPHs were first launched, precasters said they had the confidence to shell out hefty sums to build these factories because the gains they promised – greater productivity, fewer workers, better quality control and more efficient land use – dovetailed with the Government’s plans to transform the construction sector.
But some of them, such as Mr Lim Siew Howe from Greyform, a subsidiary of local construction giant Straits Construction Group, are less sanguine now.
“I think we might even go 30 years without breaking even by the end of our lease, if we’re just talking about the ICPH part of our business,” said Mr Lim, Greyform’s chief executive.
Besides operating an ICPH, Greyform also operates a precast plant in Malaysia and a smaller open precast yard in Singapore built on land it had acquired on a short-term lease from the Government.
A mock-up of a prefabricated bathroom unit at Greyform’s ICPH in Kaki Bukit.
ST PHOTO: KEVIN LIM
Precasters declined to share specifics when asked about their losses, citing business sensitivities, but four of them told The Straits Times that their production output in 2024 was below capacity by between 20 per cent and 50 per cent.
This low production rate impacted bottom lines, and was largely due to storage issues, these companies said.
Mr Lim Han Ren, group chief executive of Soilbuild Construction Group, said the firm’s ICPH in Paya Lebar averaged an annual output of about 30,000 cubic m of precast components in the past two years, between 20 per cent and 25 per cent below its actual production capacity.
Delays to construction timelines – caused by anything from inclement weather to site constraints – meant his firm was often not able to deliver its precast components from the ICPH to construction sites as per the originally agreed master schedules, said Mr Lim.
It meant that ICPHs were unable to tap one of their main strengths: a higher production capacity.
Mr Lim said firms like Soilbuild, which were among the first to tender for ICPHs, had viewed these facilities as the “future of construction” and thought they would bring higher production volumes.
“The reality is that this ‘future’ as we see it takes a longer time to materialise than we thought.”
Mr Vincent Ang, who in June stepped down after four years as president of the Prefabrication Association of Singapore for Precast and Steel (PFAPS), said these delays leave ICPHs with more stock than they have available storage space for. This often forces them to stop producing components for the delayed project, sometimes for as long as one or two months.
Mr Vincent Ang, who in June stepped down after four years as president of the Prefabrication Association of Singapore for Precast and Steel Limited, said these delays leave ICPHs with more stock than they have available storage space for.
ST PHOTO: LIM YAOHUI
The BCA spokeswoman said the agency has implemented both immediate and long-term solutions to help ICPHs with inadequate storage space, such as by allocating them temporary occupation licence land plots that they can rent from the state, typically for a period of three years.
She said ICPHs should coordinate and plan the production and delivery of precast components with construction sites.
Another issue that ICPHs raised was competition from across the border.
In Malaysia, open precast yards have lower overheads and more storage space, and can price their components 15 per cent to 20 per cent lower than ICPHs here, said Mr Ang, who is also general manager of sales at R3 Precast, the precast arm of HL Building Materials.
The firm’s ICPH in Pulau Punggol Barat, which it runs as a joint venture with Malaysia’s Sunway Construction Group, began operating in 2023.
There is also competition from Singaporean firms that operate conventional precast yards here. Some of these firms maintain a small operation in Singapore, while producing the bulk of their components at large open yards in Malaysia, said Mr Ang.
They do this to qualify as HDB-approved suppliers, because the agency requires its precasters to have a presence in Singapore, big or small, he added.
There are 14 HDB-approved precast suppliers, and they operate 21 precast plants here in total, including the six ICPHs, said the Housing Board.
Precasters ST spoke to also cited changes to government policies as another reason their ICPHs have hit a snag.
Restrictions on the proportion of components that main contractors can source from outside Singapore used to be tighter, they said.
Previously, contractors for HDB projects had to obtain a sizeable portion of their precast components – including building facades, household shelters, bathroom units and floor slabs – from local suppliers. This requirement was introduced in February 2022.
This proportion has since been reduced, precasters said.
Now, precasters said HDB imposes conditions in their tender documents that would effectively require precasters to source fewer types of components from Singapore.
In response to queries, HDB said demand for building materials, including local precast components, will increase as the agency ramps up the supply of flats, with some 55,000 BTO flats to be launched from 2025 to 2027.
Since April 2024, it has changed the project-level requirement for local precast components so that suppliers can have more flexibility to tap both their local and foreign precast plants.
“With ICPHs operating at near optimal, or at optimal levels of production, solely relying on local supply might not be sufficient to keep up with HDB’s higher demand for construction,” said HDB.
Changes to the Government’s approach to prefabricated prefinished volumetric construction (PPVCs) have also hit some ICPH operators.
PPVCs are a type of 3D precast component that are fully assembled off-site in a controlled factory setting, complete with internal finishes, fixtures and fittings.
In 2016, HDB began a push to use PPVCs as a method of construction that would be more productive and safer than the conventional way of building such structures at construction sites.
From 2019 to 2022, about 35 per cent of new public housing projects launched each year were primarily built using PPVCs, said HDB.
However, precasters said HDB’s earlier enthusiasm towards PPVCs has waned in recent years. They were told a tender for a PPVC project awarded in early 2025 would be HDB’s last such project for the time being.
A prefabricated prefinished volumetric construction (PPVC) module being hoisted into place at the Norwood Grand construction site in Woodlands on Aug 14.
ST PHOTO: AZMI ATHNI
These details were communicated by HDB in close-door dialogues with precasters, the precasters said.
HDB said in response to ST’s queries that the latest PPVC project construction tender was called in August 2024 and awarded in February.
While HDB did not confirm if it has stopped releasing tenders for such projects, it said HDB projects tendered for construction since 2022 are largely Advanced Precast Concrete System (APCS) projects, which are primarily built using 2D components.
Precasters who had designed their ICPHs to build PPVCs said the official U-turn towards the use of such components in HDB projects was a big blow.
PFAPS’s immediate past president Mr Ang said PPVCs, which typically weigh between 25 and 40 tonnes, are significantly larger and heavier than other precast components like 2D structures that may weigh up to 15 tonnes.
This means firms that had embarked on producing PPVCs had invested in large cranes capable of lifting heavier loads that cost about $250,000 each – around twice the cost of smaller cranes for conventional precast components, he said.
Mr Ang added that dealing with PPVCs also requires the ICPH’s superstructure to be able to withstand a heavier load and necessitates a greater floor-to-ceiling height, making such facilities more expensive to build.
He said: “When the Government told precasters to support their push for PPVCs, some firms built ICPHs that were catered to them. But shortly after the ICPHs were completed, (HDB) reversed gears, so obviously those ICPHs are disappointed.”
When contacted, HDB said it has observed over the years that projects primarily built using conventional 2D precast components have helped to better manage land needs and construction costs.
The overall costs for PPVC projects piloted by HDB were, on average, as much as 20 per cent higher than APCS projects primarily built using 2D components, due to factors such as production, storage and transport, added HDB.
The agency said the precast supply chain for such projects is also more resilient than that of PPVC projects as moulds to build 2D components are cheaper and faster to produce and replicate in an emergency compared with 3D moulds.
The spokeswoman for BCA said the agency has provided financial support to defray the high upfront cost of setting up ICPHs.
She said all ICPHs have tapped the Productivity Innovation Project (PIP), a grant that co-funded up to 70 per cent of the qualifying costs for adopting technology that improves productivity, capped at $10 million for solutions that meet a minimum productivity improvement of 40 per cent of the trade activity or process.
The PIP ended on March 31 and was replaced by the Built Environment Technology and Capability Grant.
BCA had also extended the Land Intensification Allowance (LIA), a scheme that gives tax allowances for the building of construction facilities that ensure efficient use of land, to ICPHs in 2017. Most of the ICPHs were developed prior to this, said the BCA spokeswoman.
Only one ICPH operator has tapped the LIA since then, she added.
At Budget 2025, the LIA was extended by another five years until the end of 2030.
The BCA spokeswoman said the financial viability of ICPHs depends on various factors, including their market positioning, product offerings and pricing strategies.
BCA will continue working with key procurers like HDB to provide ICPH operators with visibility of upcoming precast demand and specific product requirements to help them make informed business decisions, she added.
“As with any industry, some operators may face business challenges while others have demonstrated sustainable operations,” she said.
Construction and project management consultant Colin Bullock, former director at TBH, said firms’ investment decisions are directly related to their confidence in the continuity of government policies.
However, he added that such policies are unlikely to be consistently favourable to any particular group.
Despite the challenges ICPHs have faced, those in the industry do not believe it is the end of the road for such facilities, or for automation or productive technologies at large.
Robin Village Development, which runs Tiong Seng Prefab Hub – the first ICPH to open here in 2012 – said that while profitability has varied with market cycles, its ICPH has allowed it to serve major projects consistently and reliably, and positions it well for future growth.
Unlike the ICPHs that came later, Tiong Seng Prefab Hub was not built through a BCA land tender, and cost about $36 million to develop. It did not reveal why its costs were much lower.
HDB said leveraging advanced technology at these factories since 2022 to automate the entire precast process for components like floor slabs has achieved up to 2.5 times in man-hour savings, reduced human error and ensured consistent quality.
ICPHs developed under BCA land tenders have a 30-year lease term.
Precasters and experts said they welcome HDB’s move to explore greater standardisation of precast components, which then National Development Minister Desmond Lee had announced in 2023.
BCA said it is working with HDB on this front, such as by standardising prefabricated bathroom units and household shelters.
Mr Kevin Soh, director of Integrated Precast Solutions, which opened its ICPH in 2019, said further standardising the design of precast components will allow automated technologies to be tapped more efficiently, since the moulds and processes used to produce them can be kept more constant.
This will also likely incentivise more firms to invest in ICPHs as their products can be used across more projects, added Mr Bullock.
Mr Soh said he hopes the Government can consider extending the 30-year lease for ICPHs “as a gesture of goodwill” in recognition of the opportunity cost of the Covid-19 pandemic, when construction was disrupted for one to two years.
“This would allow the substantial investments we have made to have a longer runway to generate returns,” added Mr Soh.
Encouraging more firms to invest in automated facilities like ICPHs is a work in progress, Mr Ang said.
He added: “If the authorities and developers can standardise more components and level the playing field (between ICPHs and non-ICPH precasters) a bit more, it will be more sustainable to run an ICPH. As things stand, it is not a beautiful sight.”
