ModnPods upsizes manufacturing base after securing QIC investment to tackle housing crisis

Gold Coast innovator ModnPods, a company that has made headway in building prefabricated cabins for holiday parks, is ramping up production at a new upsized facility to meet the housing crisis in Queensland.

ModnPods, founded by Texan John Christie while he was studying an MBA at Bond University in 2015, has relocated to a 6,200sqm factory at Arundel where the company now has capacity to build up to 200 modular pods a year.

The upgrade, which is expected to generate an additional 80 jobs, has boosted the company’s turnaround for manufacturing pods from 32 days to just three days.

The purpose-built factory is more than four times larger than its previous Arundel facility with the company’s growth aided by a strategic shareholding secured from the Queensland Investment Corporation, the state government’s investment arm.

The massive expansion comes just two years after ModnPods announced its first commercial deal when it was contracted by Ingenia Communities (ASX: INA) to install five premium pods at its Ingenia Holidays Byron Bay Park.

“We’re still working with Ingenia,” Christie tells Business News Australia, adding that the company has expanded its holiday park client base to include Discovery Parks, Tasman Holiday Parks, Reflections Holiday Parks and NRMA.

“Now with social housing we are focusing on government employee housing in Coen and working with the Queensland Department of Education for housing for teachers in Croydon.”

Through the new facility, ModnPods’ pre-fabricated homes of up to three bedrooms are built using the lean manufacturing model that Christie describes as similar to a vehicle or boatbuilding assembly line rather than the static manufacturing system the previous factory could only facilitate.

“The lean manufacturing model helps us improve production time and quality,” Christie.

“With the social housing, we work directly with QBuild who will call us to order a two or three-bedroom pod which is bult to the same standard we have always built to which has helped build our brand.”

ModnPods also works in conjunction with Queensland’s QBuild Rapid Accommodation and Apprentice Centre at Eagle Farm in Brisbane, as part of the Methods of Modern Construction program.

“By using prefabrication facilities, Queenslanders get the triple benefit of mitigating issues with traditional builds like weather, scheduling and workforce availability,” says Mick de Brenni, Queensland’s Minister for Public Works.

“Through this initiative, we can deliver homes more quickly with better value for money, while tapping into existing hubs of highly skilled tradespeople and training the next generation of construction workers.”

The lean manufacturing system represents a significant uptick in production capacity which originally was 16 weeks, reduced to 32 days at its former facility.

“In our new factory now, a pod moves every three days, which is about 80 pods a year and by early next year capacity will ramp up to 120 pods a year before reaching capacity of 200 per year.”

ModnPods’ current client base is heavily weighted towards the booming holiday park market, which has enjoyed a post-pandemic resurgence amid the popularity of drive holidays, with just 20 per cent of the business currently sourced from government contracts.

Christie says this is expected to increase once ModnPods moves beyond the prototype stage with the social housing contracts.

“We do see significant potential in social housing where that will potentially become an important part of our business,” Christie says.

The QIC investment in ModnPods and its new Gold Coast factory has been facilitated through the Queensland Government’s $100 million Business Investment Fund.

ModnPods managing director Stuart Giles, who has an extensive background in healthcare, is understood to have been the driving force behind the investment which he describes as critical to improving housing availability.

“We’re delighted that ModnPods is contributing to the provision of solutions in the housing affordability space whilst supporting growth in local employment opportunities across the manufacturing and tourism sectors,” Giles says.

“We are excited to see what the future will bring as further innovations and initiatives see us move to full capacity in this new factory and begin exploring where our next great Queensland production facility might be located as part of our ongoing commitment to be part of the provision of housing affordability solutions.”

Giles made his fortune through the Epic Pharmacy chain and Icon Group, Australia’s largest cancer care provider which has since become majority owned by QIC.

Christie describes QIC as an ‘active investor’ in ModnPods.

“They’re extremely hands on and help us leverage relationships they have through their investment fund with other businesses,” he says. “They’re fantastic to work with and they believe in our vision.”

Christie, a former search-and-rescue operator for the US Navy, founded the ModnPods business in 2015 with the pod concept originally based on building tiny homes from shipping containers.

“In 2017 we moved to prefabrication and in 2019 I decided to make another strategic move, and that is to source as much Australian product as I can for production.

“There’s a lot of longevity with our product. We do everything in-house and there is a lot of detail put into every aspect of the business from the first client contact and design, all the way to procuring the materials and project management with the client.

“We also have a great team that has helped us get to this point,” Christie says. “With Stuart leading ModnPods, he not only makes the business more enjoyable and fun, but he also keeps it extremely simple with a clear direction.”