Periodic Reporting for period 1 - IPAC (The first insulating, loadbearing cardboard material for construction applications)
Berichtszeitraum: 2018-11-01 bis 2019-02-28
The construction industry contributes to 13% of the world’s GDP and is currently growing at the highest rate since 2008 - even faster than the global economy. Nonetheless, this sector underperforms in terms of productivity and is one of the most intensive areas of human intervention in the environment, with the traditional materials and methods employed carrying a very high impact in terms of CO2 emissions, natural resource mining and water usage. For these reasons, plus the rapid growth of the world’s population, migration of asylum seekers to developed countries and urbanization in the developing countries, there is a critical need for faster and more sustainable construction methods. Reflecting this reality, the global sustainable construction market was worth of €154 billion in 2016 and is forecast to grow at a CAGR of 11.6% until 2026.
BAT’IPAC was founded in 2012 to bring a green and innovative material to the construction market. IPAC, the “Isolant Porteur Alvéolaire Cellulosé”, was first developed by Hubert Lé in 2009, who aimed to repair his own house’s roof following a natural disaster. This first empirical observation of the advanced performance of corrugated cardboard marks the beginning of a journey that brought together a team of socially and environmentally conscious entrepreneurs and led already to the realization of 54 projects in France, carrying out IPAC’s brand name. Throughout this process, we have been able to demonstrate that IPAC can be used also as structural material, attracting a lot of attention from French press and important national and international stakeholders.
Our company aims to innovate both through technology and business model. We have already implemented with success a mix of commercial and social entrepreneurship in France, which was only possible thanks to our partnership with French help centres. One of our future goals is to certify IPAC not only as an insulating material but also as an structural material and replicate the business model in other countries.
BAT’IPAC was founded in 2012 to bring a green and innovative material to the construction market. IPAC, the “Isolant Porteur Alvéolaire Cellulosé”, was first developed by Hubert Lé in 2009, who aimed to repair his own house’s roof following a natural disaster. This first empirical observation of the advanced performance of corrugated cardboard marks the beginning of a journey that brought together a team of socially and environmentally conscious entrepreneurs and led already to the realization of 54 projects in France, carrying out IPAC’s brand name. Throughout this process, we have been able to demonstrate that IPAC can be used also as structural material, attracting a lot of attention from French press and important national and international stakeholders.
Our company aims to innovate both through technology and business model. We have already implemented with success a mix of commercial and social entrepreneurship in France, which was only possible thanks to our partnership with French help centres. One of our future goals is to certify IPAC not only as an insulating material but also as an structural material and replicate the business model in other countries.
The present study aimed to clarify if the IPAC project can be completed within the time and budget limits of the SME Instrument Phase 2, and to demonstrate its potential for the creation of more jobs and value for our company, business partners, society and environment. Thus, we performed a thorough assessment that included the technical, commercial and financial aspects of the project.
The technical assessment covered the final product specifications and design methodology, technical roadmap for the Phase 2 project, regulatory issues and a Freedom to Operate analysis.
In order to prove the commercial feasibility of our project, we carried out the following activities: (i) in depth analysis of the sustainable construction market and competitors; and (ii) definition of strategies to best position our product, expand our value chain, and successfully engage with prospective international representatives and customers. The best market opportunities identified were in the prefabricated and social housing, as well as in commercial and public sector building. These promising niches have a high demand for products like ours, as confirmed by the success that some of our competitors have reached in these markets.
The analysis of the financial feasibility of the project included the calculation of the budget required for its implementation and the definition of a pricing strategy for the different types of IPAC panels (for walls, roof, floor and partitions). Combining this and the previous commercial assessment, we were able to estimate the number of IPAC sales (house equivalents) in the five years after the Phase 2 and potential revenues and return on investment.
Finally, to complete the study we performed an analysis of potential risks and established mitigation measures to minimize their impact.
We concluded that the Phase 2 project can accelerate the deployment of IPAC as structural construction material and have a significant impact in our company’s growth and expansion.
The technical assessment covered the final product specifications and design methodology, technical roadmap for the Phase 2 project, regulatory issues and a Freedom to Operate analysis.
In order to prove the commercial feasibility of our project, we carried out the following activities: (i) in depth analysis of the sustainable construction market and competitors; and (ii) definition of strategies to best position our product, expand our value chain, and successfully engage with prospective international representatives and customers. The best market opportunities identified were in the prefabricated and social housing, as well as in commercial and public sector building. These promising niches have a high demand for products like ours, as confirmed by the success that some of our competitors have reached in these markets.
The analysis of the financial feasibility of the project included the calculation of the budget required for its implementation and the definition of a pricing strategy for the different types of IPAC panels (for walls, roof, floor and partitions). Combining this and the previous commercial assessment, we were able to estimate the number of IPAC sales (house equivalents) in the five years after the Phase 2 and potential revenues and return on investment.
Finally, to complete the study we performed an analysis of potential risks and established mitigation measures to minimize their impact.
We concluded that the Phase 2 project can accelerate the deployment of IPAC as structural construction material and have a significant impact in our company’s growth and expansion.
We demonstrated that IPAC innovation can help in mitigating the environmental and health problems of construction with “conventional” materials, while creating social inclusion through employment. Below, we list some of the socio-economic and societal benefits and implications of the current project. Some of them coincide with the core values of BAT’IPAC.
• Utilization of recycled, recyclable and non-toxic materials that have low embodied energy;
• Limiting water and sand consumption, among other resources;
• Improving the health and well-being of workers and houses/buildings’ inhabitants;
• Having local production facilities to minimize waste, reduce CO2 footprint and accelerate local economies;
• Creation of unique work opportunities for socially-excluded members of our society, in tight cooperation with local or regional help centres.
• Faster construction and increased productivity, because most of the work is carried out off-site;
• Reducing buildings’ energy consumptions and emissions through increased thermal resistance of the walls.
To ensure that all the above referred goals are achieved, our commercial strategy will start with the consolidation of our business in France. This will serve as a model for its gradual replication in the rest of Europe and, later, in Asia and Africa. Business replication will proceed preferentially through a franchising arrangement that has in mind preserving BAT’IPAC social and environmental values and goals, while increasing IPAC’s market share. According to our financial forecasts, we will be able to generate cumulative revenues of €54.8 million during the first five years of commercialization after the Phase 2 (2022-2026), which represents an ROI of 3.8 and a share of only 0.013% of the forecasted market value for the structural materials for sustainable construction in Europe, by the end of that period. This is an evidence of the huge potential market available.
• Utilization of recycled, recyclable and non-toxic materials that have low embodied energy;
• Limiting water and sand consumption, among other resources;
• Improving the health and well-being of workers and houses/buildings’ inhabitants;
• Having local production facilities to minimize waste, reduce CO2 footprint and accelerate local economies;
• Creation of unique work opportunities for socially-excluded members of our society, in tight cooperation with local or regional help centres.
• Faster construction and increased productivity, because most of the work is carried out off-site;
• Reducing buildings’ energy consumptions and emissions through increased thermal resistance of the walls.
To ensure that all the above referred goals are achieved, our commercial strategy will start with the consolidation of our business in France. This will serve as a model for its gradual replication in the rest of Europe and, later, in Asia and Africa. Business replication will proceed preferentially through a franchising arrangement that has in mind preserving BAT’IPAC social and environmental values and goals, while increasing IPAC’s market share. According to our financial forecasts, we will be able to generate cumulative revenues of €54.8 million during the first five years of commercialization after the Phase 2 (2022-2026), which represents an ROI of 3.8 and a share of only 0.013% of the forecasted market value for the structural materials for sustainable construction in Europe, by the end of that period. This is an evidence of the huge potential market available.