FNB and Sasol plot housing iPad

FNB and Sasol plot housing iPad

Formerly-listed Enviroserv’s subsidiary to build houses but not from bricks and mortar.

First National Bank (FNB) believes it has identified an opportunity to lend hundreds of millions of rand via green housing loans in a bid to deal with the shortage of houses in the affordable space, while on the other side giving entrepreneurs an opportunity to benefit from this initiative.

According to Marius Marais, FNBs CEO of Housing Finance (a unit of the bank offering home loans to people earning R3 500-R16 000) there is a need of about 600 000 units, based on a survey done in 2007. Marais added that its book in affordable housing space is heading close to R9bn, with loans of about R2bn on an annual basis. Because of the shortages, Marais says there is more room to grow.

“Where are these families staying at the moment, they earn that kind of income, they either rent rooms or leave in a backyard room ... We need to find the housing iPad in Africa ... the piece of technology that can be working across the whole of Africa and can meet the housing needs that are out there.

“The biggest issue at the moment is to find sufficient supply to fund, meaning new houses coming into the market place. My clear cut measure is... how many families did we actually enable home ownership for in a decent home,” Marais said.

To work around this “housing iPad” which is meant to come up with an innovative way of meeting housing needs, Marais said FNB has partnered with petrochemicals giant Sasol and Tower Technologies, a subsidiary of formerly-listed Enviroserv involved in what it calls “alternative building system”.

With the “alternative building system”, the houses are not made out of bricks and mortar, but have quality equal or exceeding that of a brick, according to Tower Technologies. The houses are made from mining, manufacturing by products and have pre-built panels derived from waste streams like fly ash and gypsum. Fly ash is a by-product of Sasol’s power production, while gypsum is a by-product of industries, such as paper making, fertiliser production, desalination of acid mine water.

CEO of Tower Technologies Mike Symons said the houses had a “look and feel of traditional brick and mortar with many superior attributes in that the walls are guaranteed straight, solid and are incombustible”.

FNB’s Marais added that “conventional building methods are becoming increasingly expensive, and impact directly on the ability of banks and developers to meet the need for affordable housing, because of this, and continued increases in labour costs, we have been compelled to consider alternative technologies that will enable us to deliver affordable quality houses to the emerging middle class.

“What we would like to do is to provide the finance for the commercial entity [involved in building] and the end-user, but our primary driver is to enable primary home ownership.”

Bridgitte Backmann, MD Sasol Chemcity, Sasol’s enterprise development vehicle supporting SMMEs in the chemical, energy and related sectors, said the affordable housing solution does not have to be inferior nor should it be more expensive than bricks and mortar.

“We have joined forces as the private sector and we believe that we found a ground breaking and innovative way of dealing with shortages,” Backmann said.

Currently three housing units have been built in an emerging middle class suburb known as Cosmo City in Johannesburg, where market acceptance is believed to be very high.

“Taking this innovation from idea to market has been particularly rewarding. By supporting the development of this technology, Sasol is showing its ongoing commitment to reducing its environmental footprint. A number of entrepreneurs and private institutions are additionally starting to explore the affordable housing space, identifying it as a market which is ripe with potential. Most significantly, it has the potential to create jobs for South Africans,” said Backmann.

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Denny Crane

Denny Crane
It's not me ... yet. Denny Crane from the TV series Boston Legal. Click on picture if you're not sure who he is!