Katerra, a self-described end-to-end provider of building services that is valued at over $3 billion, today announced plans to open a new advanced manufacturing factory in Tracy, California. The factory is expected to begin production in 2019 and to employ 500 people.
The company’s goal is to make the building construction process cheaper and more efficient by handling everything from the architectural design of the building to the construction of walls to the installation of appliances, eliminating the need for subcontractors. In order to fulfill this vision, Katerra needs its own domestic factories. In addition to the soon-to-be opened Tracy factory, Katerra has a facility in Phoenix that employs 300 people. The company also announced in September that it is opening a mass timber production facility in Spokane, Washington that will eventually employ 150 people.
The Tracy factory will produce a wide array of building components, including wall panels, floor systems, windows, cabinets, and finishes.
In a phone interview with VentureBeat, Katerra’s head of manufacturing, Matt Ryan, explained that in order to keep logistics costs low, Katerra’s factories need to be within 500 miles of projects. Tracy, located just an hour’s drive from San Francisco in California’s Central Valley, allows the company to reach customers from Southern California up to Seattle. A Katerra spokesperson said that Katerra was also awarded a $10 million tax credit from the California Competes state program in order to build the new factory.
“We had what we called semi-automation in the manufacturing of a lot of the key components [at the Phoenix factory]. As we transition to Tracy, we have worked diligently with suppliers around the world to provide a much higher degree of automation,” Ryan told VentureBeat. He explained that with the Phoenix factory, his team’s focus was on figuring out how to optimize Katerra’s end-to-end production line — how to ensure that all of the building components hit the production line at the right time — and have the right software to integrate. He said many of those kinks have been smoothed out as the company prepares to break ground on the Tracy factory. When it is fully built out, Katerra claims the factory will be able to produce the equivalent of 12,500 multifamily units annually.
Of the 500 roles Katerra plans to hire for, 440 will be in manufacturing — assemblers and production line leads — and 102 will be operational support positions, like general managers, HR, and IT. Ryan said that Katerra also hopes to open an R&D lab at the factory — luring nearby talent from Silicon Valley.
Within the next three years, Katerra hopes to open three more building components factories in the South and East Coast markets, as well as another mass timber production facility in the Southeast to serve its footprint of customers across the U.S. Right now, the majority of the company’s bookings are on the West Coast and in the South and Northeast regions of the U.S., according to a Katerra spokesperson.
To date, Katerra has accumulated more than $3.7 billion in bookings for new construction projects, and it currently employs about 3,500 people. The company has completed construction on two projects so far — a 386-unit apartment complex in Anaheim, California and a 132-unit apartment complex in Spokane, Washington.
Correction, 7:36 a.m. This article has been updated with the correct number of bookings Katerra has accumulated to-date, as well as the number of people Katerra employs.