Ryland thinks Siberia might be a hot market Homebuilder seeking $10 million contract

October 22, 1991|By Ellen James Martin

Could prospects for home building be better in Siberia than in the United States? The Columbia-based Ryland Group thinks so.

The company hopes to win a $10 million contract to retrofit and expand a Siberian homebuilding plant that could provide 3,000 to 4,000 frame houses a year for peasant families in rural Russia. For centuries, many such families have lived in dachas -- rustic log or frame houses made with their own hands.

As part of its attempt to keep rural families on the farm by providing better housing, officials of the Russian Republic last year contacted Ryland Trading Ltd., the foreign trading arm of Ryland Group, one of the nation's leading firms in the panelized housing field.

Panelized housing, 30 percent complete in the factory, involves factory production of walls for a home. The walls are joined at the site. Ryland also makes modular housing, which takes the concept further; three-dimensional units are made at the factory, then transported to the building site for assembly.

Ryland officials believe they can win the contract. "It's not a sure thing. It's more of an opportunity for us," said Vaike O'Grady, C Ryland spokeswoman.

And others who have studied the Soviet market for panelized and modular housing -- which is built largely in a factory and then erected at a building site -- believe Ryland is well positioned to capture a piece of the burgeoning and potentially lucrative market.

"Ryland is coming at the perfect time, both to meet Soviet needs and to do well for Ryland. It could be a very, very large and profitable market," said June Koch, president of Construction Marketing & Trading Inc., a consulting firm to U.S. companies seeking a piece of the Soviet or Eastern European market.

Demand for housing in the Soviet Union is growing strong at the same time the U.S. homebuilding market finds itself in a slump, said James Birdsong, executive director of the Building Systems Councils, which represents 250 companies in the panelized or modular housing field.

"The U.S. homebuilding market is terrible," said Mr. Birdsong, noting that a decade ago, the domestic industry could count on 2 million single-family housing starts a year. Today, the number has shrunk to 1 million a year.

"There are needs for housing all over the world," he said. Even though in many countries the prevailing type of housing is masonry, there are markets like the Soviet Union where wood is abundant and panelized building methods could be employed, he said.

The $10 million contract would require Ryland to re-equip and expand the homebuilding plant in the Siberian city of Barinoul. Ryland-designed technology would replace Swedish technology at the plant. The goal is to make the factory capable of producing more than 3,000 frame homes a year, most of them four-bedroom houses.

The reworking of the plant could begin early next year if Ryland wins the contract.

"Contracts of this magnitude take a large amount of time to negotiate and complete. What we're doing is advancing a new concept of building," said Joseph Barker, the vice president in charge of Ryland Trading, who has made four trips this year to the Russian Republic to iron out details of the contract.

Since last year, Ryland has done an active business providing panelized housing for Soviet Jews who have emigrated to Israel. By the end of 1991, it will have shipped 1,300 houses into Israel, and 900 of those should be "under roof" by year's end.

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