August 15, 2024 • 26 mins
Can a mix of modular housing and panelized solutions be the key to solving the UK's housing crisis? DJ, co-founder and COO of Sano, a UK-based team of innovators dedicated to rethinking the possibilities of housing technologies, believes they can.
Set against the backdrop of government transition and new UK housing goals, DJ shares how Sano is empowering stakeholders with tools and information to build better housing, as well as how Sano's revolutionary modular construction system, M-DOCK, is designed to create new housing opportunities quickly and affordably, all while prioritizing healthy homes and efficient processes.
Lastly, DJ explores the potential for Sano's global expansion, particularly in the US market, and the crucial need for government clarity on standards and funding.
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Episode Transcript
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John McMullen (00:00):
Hello and welcome to Inside Modular, The Podcast
of commercial modularconstruction brought to you by
the Modular Building Institute.
Welcome everyone.
My name is John McMullen.
I'm the Marketing Director hereat MBI.
Today I'm joined by DJ,co-founder and COO at UK-based
Sano.
DJ is here to talk about thecurrent housing challenges
(00:22):
across the United Kingdom andthe potential for his company's
systems to make a difference.
D welcome.
DJ (00:29):
Hi, John.
It's my pleasure.
John McMullen (00:32):
So, tell Dm about yourself, dj.
What's your background and howdid Sano come to?
Tdefinitely not from thisindustry.
So my background was chemistry,did a degree in chemistry and
then a PhD in nuclear chemistry,so very much not from the
industry.
I then joined a startup lookingat vaping and tobacco
technologies and that's where Imet Sano's co-founder Ross, and
(00:53):
between us we had various roles,looking from product design,
product development, productinnovation, looking at
manufacturing.
So how do we manufacturedevices?
How do we manufactureconsumables?
Where do we manufacture umdevices?
How do we manufactureconsumables?
Where do we manufacture them?
So this involved finding abuilding um, and it was an
ex-pharmaceutical site.
So 100,000 square feet, uh, 15grade d clean rooms.
(01:16):
It was all about, you know,understanding about air handling
in a pharmaceutical site andhow do we switch the building on
, and there was a whole raft ofideas.
And this startup then gotacquired by a big ftse 30
company and then becameresponsible for the vision team,
which was a team that wasreally looking forward five, ten
years ahead into the future togo actually, what does the world
look like in terms of products?
(01:37):
And from that then workingbackwards to go what sort of
patent and ip should we befiling today so that that in
5-10 years time, when the worldhas moved on and consumers have
moved on, we've got the patentsewn up, ready to go and become
market leaders.
And then there's an opportunity,over this sort of weird COVID
period, for me and Ross toescape and we thought, well,
(02:00):
what should we do next?
And it was about well, we'reall at home.
At that time as well, wediscovered that Ross had a
massive mold sensitivity.
So we thought, actually this islinked back to some
accommodation that he lived in20 years ago, and then this was
just before mold became a bigthing in the UK.
So we were thinking, actuallythere's got to be a better way
(02:21):
to build and live in houses.
So we thought, well, how do wecreate healthy homes for
everyone to live in?
From that then, sano sort ofstarted focusing on healthy
homes, healthy materials,healthy living, fundamentally
looking after how should we belooking after the occupants?
Wow, that's quite a journey.
(02:42):
That's amazing.
I love your approach tothinking ahead and working
backwards and coming up.
That's smart.
So Sano is trying to buildbetter housing.
So tell me about yourorganization, how it's set up.
How are your days spent?
What do you do day to day?
DJ (03:07):
It's all about empowering the construction industry.
So we sit here, we identifyproblems, figure out how we fix
the problems, but by thinkingmuch more broader than sort of
thinking about the problem inisolation.
So we're all about stepping back, zooming right out, and because
we're not from the industry,you know we haven't got any sort
of baggage or super constrainedviews.
You know so we can be too superholistic, zooming right out, and
it's about you know so we canbe super holistic, zooming right
out.
And it's about you know Sano'sall about creating high quality,
(03:30):
efficient, healthy andsustainable housing for everyone
and massive, massive believersthat everyone deserves to live
in a house that does not impacttheir health negatively, and I
think that's some of the broaderchallenges that we're trying to
fix.
And so, as part of sano, it's asmall, diverse, multi
(03:51):
multidisciplinary team, so lessthan 10 people, but it's about,
you know, the, the collectivepower of the group of people
that makes sano special.
You know you don't need big of40, 50 people to have something.
That's really cool, and that,for me, is what Sano is about,
and it's about solving theseproblems.
And then the way we protect oursolutions is really interesting
(04:16):
that we file patents, which issomething that happens quite a
lot in the construction industrybut rarely spoke about.
John McMullen (04:23):
How would you and I want to get back to those
patents in a bit, but how wouldyou describe the housing
situation in the UK right now?
DJ (04:32):
Yeah, it's absolutely, really interesting.
So we are a couple of monthsinto a new government now as
we're recording this, so it's ata pretty critical turning point
.
And you know we're well into awell-documented housing crisis
and off the back of that there'san unprecedented demand for new
housing.
(04:52):
But the challenge is the numberof new house completions is
just stagnating and isn'tgrowing at the same rate, so
that demand is just looming farbeyond the capacity.
So last year, for example, inthe UK we built about 220,000
(05:13):
new homes, which on the face ofit sounds like a big number, but
the target has been about300,000 new homes.
There's always been that lagthere.
And then of that sort of backin 2017, about 9% were mmc, and
back in now in 2023, about 16percent was mmc.
(05:33):
And then some of the otherchallenges that are currently
faced in the uk is the temporaryhousing or temporary
accommodation crisis, of whichuk government is spending about
five million pounds per daytemporarily housing people.
I just haven't got anywhere tolive, which is just an
absolutely shocking stat and itjust shouldn't be a thing.
(05:54):
And then, with that as well,there was a.
There's been a few initiativesby local local governments where
tenants could purchase theirproperty at a heavily discounted
price, which is great, butthere's rarely been a plan to
replace the stock.
So I think there's just a bitof a perfect storm at the minute
(06:18):
, in that there's a massivedemand, massive need for new
housing, and we'll get onto it.
But MMC for me, or a modularconstruction, has got a big, big
role to play in that.
On the flip of that, there'ssort of one big watch out.
For me is that we need to makesure that we're setting and
(06:39):
building to the right standard,because we can very much open a
flood case and go we, we need tobuild, build, build, build,
build.
But actually building to thewrong or poor standard will only
exasperate the problem furtherdown the line.
John McMullen (06:54):
You mentioned before housing stats from last
year.
You mentioned local governanceinitiatives.
I know the UK recently wentthrough a larger government
transition.
What's being done by the newgovernment to generate new
housing possibilities and how,if at all, is this different
(07:14):
really from the last government?
DJ (07:16):
Yeah, really, really good question, and it's still early
days.
But there's loads of positivenoise coming from central
governments and honestly, Ireally think that they are
trying to do the right thing.
But for that to manifest thematerial itself, the whole
industry needs to get behind itand get cracking.
You know, we need to getbuilding as soon as possible and
(07:40):
there's loads of earlyinitiatives that they've started
talking about.
So, for example, changes to theplanning regulation, which
historically in the UK has beena bit of a massive blocker to
sites.
So these changes, coupled withunlocking more land, should
speed up the process, but alsoshould give developers more
(08:02):
confidence that actually, bygoing into a planning
application, they'll come out ofthe other end with a positive
outcome, whereas at the minutepeople are going into a planning
process expecting a two, threeyear, if not longer, journey,
whereas you know, quite frankly,there's just not enough time
now to go on that processAlongside that.
(08:26):
So I mentioned the 300,000targets that's now been
increased to 370,000 new homestarget to build every year.
That's a massive number, right?
So compared to the 220,000 thatwas built last year, it's a 70
odd percent increase and, as youknow, you just can't switch
that on overnight.
So there's a massive growthphase that needs to happen
(08:47):
pretty quick now to get us tothat target number.
Uh, alongside that, localauthorities so local, um, local
governments have now been givena housing target.
So they did have our nuggets,they got taken away.
We sort of relaxed the wholething a little bit, but now
they've been given a targetagain, so that should promote
(09:08):
people to get building again.
And also, local cities or localcounties have been given more
control and power over whathappens locally and also how
local funding is spent.
So actually historically it wascontrolled centrally, but now
that's being devolved more intolocal counties.
So actually they've got bettercontrol over what happens
(09:29):
locally.
But to sort of get this ballrolling, there does need to be a
significant section of cash toget it moving.
I think that that's going to bean interesting barrier to
overcome.
Now to support that, there issome relaxation of some of the
financial regulations thatshould make it easier for local
authorities localgovernment-based to sort of
(09:51):
borrow funds against some of theassets that they've already
disposed.
So that might just help bridgethat gap a little bit.
And what's really exciting isthat there is a commitment to
new homes being sustainable andaffordable and high quality.
So they're all the rightbuzzwords to sort of get mmc and
off-site constructionintegrated into this new housing
(10:13):
target, but there's no furtherdetail on that as of yet well,
as you said early days, earlydays.
right, there's a good journey togo on, and definitely early
days, but I think in the overthe last few weeks I there's a
good journey to go on, anddefinitely early days, but I
think in the last few weeks, Ithink there's some good,
positive noise and it's now justabout keeping the momentum on
top of that, not only from agovernment perspective, but also
as an industry.
(10:34):
Right, we just need to getcracking and go behind it rather
than sort of having this sortof infighting, debating over
what does this mean, what doesthat mean?
Let's just crack on and getbuilding.
John McMullen (10:51):
Sano has a tagline that I really like.
It's leading global housinginnovation from behind the
scenes, and you mentionedearlier in the interview forward
thinking, working back a lot ofpatents that you're filing.
Tell me about what your taglinemeans and how your work goes
into that.
What is what is Sano doing toinfluence how people live in the
UK now?
DJ (11:10):
Yeah.
So Sano is all about empoweringother people to make better
choices and better decisions,and we're about giving people
the right ingredients and givingthem, you know, the cake that
they should be baking.
Yeah, and that, for me, is thereally exciting part.
So we're not sat here going.
We must create the next biggestbrand in X, y, z.
(11:31):
So that's not what Sano's about.
Sano's about getting all thebits together, getting all the
science sorted, getting all theproduct development done,
getting all the technicalinformation sorted and aligned.
Staple that together as a packthat can then go out to the key
stakeholders, whether you're aproduct developer, a
(11:51):
manufacturing facility, anarchitect, a gc, and it's about
giving all these people theright information as early as
possible in the process.
And yeah, there's loads of goodexamples of products out there
that you know have been inventedand no one has any idea who
came up with that idea?
Right, you could be stood rightnext to them in starbucks and
you'd have no invented.
And no one has any idea whocame up with that idea?
Right, you could be stood rightnext to them in starbucks and
you'd have no idea.
And that is what's reallyexciting about sano coming up
(12:13):
with all these ideas are notactually being too fussed about
the fame and the glory that comeof it.
We're all about actually.
People should be living inhealthy homes.
John McMullen (12:24):
Let's just get there as quickly as possible
speaking of of products, I wason your website.
One of the most prominent oneson your website is a system
called MDOC.
Tell me about MDOC.
How does it work exactly andhow does it differ from typical
volumetric modular construction?
DJ (12:41):
MDOC was one of our very first products.
We were initially looking atthe US market and also looking
at built to rent funds and howcould they quickly deploy
capital to get a good return andwhat sort of products would
they be building?
If I was a built to rent fundand it was all about, actually,
I need a product that's of goodquality, good specification,
(13:04):
because if I'm going to own thisasset for 30-40 years, I need
to know that I haven't got to goback and fix any problems.
And so we started looking atoffsite manufacturing, looking
at bath and pods and again, notbeing from the industry, this
was all sort of new.
A few years ago I thought thisis really exciting.
But then we sort of quicklyrealized that actually,
especially for a UK market,building fully volumetric single
(13:28):
family houses was going to be abit of a challenge because of
various manufacturing reasonstransport issues, there's
challenging roads in the UK, sothere's not many sites that are
easily adaptable for a fullyvolumetric solution.
So we thought there's got to be.
But manufacturing the factorydoes make sense.
So we thought there's got to be.
But manufacturing in a factorydoes make sense.
(13:48):
So we thought there's got to bea better way of doing this.
So then we concentrated all ofthe sort of high service areas
your MEP or your air source heatpumps, your heating interfaces,
your consumer units, yourplumbing bathrooms.
We thought that actually, as amodule or a pair of modules,
does make sense to bemanufactured in a factory.
(14:09):
So we thought actually let'sjust focus on concentrating that
in a factory and then the purevolume of the house your kitchen
, living, dining, bedroom spacesactually there's a bit of a
misconception actually makessense for them to happen in a
factory?
We didn't think it did.
So we thought let's just use apanelized system to complement
and create them spaces.
(14:30):
And so that's where mcom camefrom.
So it's a hybrid buildingsystem where it's part modular
and part panelized and it'sabout creating the right product
in the right environments.
So it's taking a standardizedmodule that can be manufactured
in a modular factory and astandardized panelized element
that can be manufactured in amodular factory and a
standardized panelized elementthat can be manufactured in a
(14:50):
standardized way in a panelizedfactory, and then these come
together on site to create ahouse that can have flexibility
in size.
So the same module, for example, could work for a two bed,
three bed or a four bed house.
John McMullen (15:05):
The right ingredients for the right cake.
That's exactly it, exactly.
I like that.
So tell me about yourmanufacturing process.
What is that like?
Really interesting question.
DJ (15:15):
So, as Sano, we haven't got a factory and we have no
ambitions to open up a factory.
As I said earlier, we're allabout empowering the ecosystem.
So it's about Sano doing all ofthe clever and hard thinking
and solving all of the problemsso that, when it comes to
manufacture, the manufacturingfacility can focus on
manufacturing, which is exactlywhat they're really good at.
So how do they get the processbetter?
(15:36):
How do they improve the quality?
How do they get them out faster?
And it's just about gettingthat balance right.
And from me and from experiencein the UK over the last few
years, as we've seen some prettyhigh profile failures.
The challenge has always beenfactories having to diversify a
little bit from their corebusiness to try and keep the
(15:57):
factory busy, because the nextorder is a few months away and,
as you know, having a factorythat's not manufacturing
anything is an absolutenightmare.
John McMullen (16:06):
It is indeed.
So tell me about youraffordable housing solutions.
How do they work?
DJ (16:12):
So we developed a standard set of floor plans that are
destined for the affordablemarkets and the idea is
developed two core modules andthese modules have got all of
the complicated bits.
So your main entrance, all theMEP downstairs toilets and then
your upstairs family bathroom.
The idea is we've got somemanufacturing partners lined up
to manufacture these and we'vegot a range of panelized
(16:37):
partners that can alsomanufacture the panels, and so
the idea is that these are allstandardized, all ready to go,
all compliant with spacestandards and building regs in
the UK.
So it's a super slick copy,paste, drop and go model, and
the beauty of the way we've doneit is that everything doesn't
(16:58):
have to look the same.
So, historically, the challengewith modular is everyone wants
something different but they allhave to fit in that sort of box
, whereas we're saying, actually, if you want a house that's
slightly wider, that's great,let's order a slightly bigger
panel to make it bigger, but themodular bit can always stay the
same.
John McMullen (17:18):
What kind of feedback have you gotten so far
about your MDoc solutions?
About your MDoc solutions?
It's been a really interestingjourney.
DJ (17:25):
So we've started this a few years ago and at the time we
started, fully Volumetric wasthe show in town and everyone
was sort of spending a lot oftime looking at fully modular
houses.
But over the last 18 months, aswe've sort of seen the
challenges with some of theFully Volumetric factories,
we've seen a massive uptake inhow many people are talking more
(17:49):
of the hybrid language aroundbringing a pod or a module
together on site with apanelized system.
Now it started off withbathroom pods and kitchen pods
and you know, sano aredefinitely not the first company
to come up with a pod and panelapproach.
That's been around forever, butI think not the first company
to come up with a pod and panelapproach.
That's been around forever.
But I think we're the first tocome up with it in the way we've
done it, so that it's trying tokeep a standardized core
(18:13):
sitting with a flexible dock, aswe call it, which is that
site-built structure.
So the feedback has beenamazing and as we get sort of
further and further along, we'rehearing more and more positive
noise around.
Actually, hybrid is the way Iwant to do hybrid.
I can only see single familyhomes now being built in a
(18:34):
hybrid fashion.
So, yeah, super positive, and Ithink it's now time to just
supercharge that and getbuilding more houses.
John McMullen (18:41):
You mentioned developing MDoc in response to
the challenges of deliveringfully volumetric modular systems
in areas of the UK.
Do you see a potential for thistype of system working in the
US, or are you focusing strictlynow on UK and Europe?
DJ (18:59):
Yeah, 100%.
So we're to the point now whereactually we've got a really
good manufacturing supplyecosystem sorted.
We've got a number ofarchitects on board that can
deliver this.
We've got a few maincontractors or general
contractors that can deliver thesystem.
The whole technical pack, thewhole ecosystem is there, ready
to go for the UK and, given thatUK, with a challenging
(19:22):
environment, was a really goodtest market for us.
The next plan is to tackle theUS, because some of the work
that we've done and currentlydoing with a few smaller
developers in the US, actuallythe system, the hybrid approach,
works really well for biggerhouses as well.
So a lot of the UK is centeredaround about a thousand square
(19:44):
feet, whereas in the US a smallhouse is 1,500, 2,000 square
feet, and the work that we'vedone shows that this works
really good.
By incorporating some morevalue into the module, so we can
have a slightly bigger entrancehallway, we can now start
adding elements of the kitchenor a back entrance into the
(20:04):
module.
We can include more bathroomsin an upstairs module if it's a
two-story dwelling.
So there's definitely,definitely value in this in the
us.
And that's the whole beauty ofoff-site right.
It removes geographicboundaries.
The same system can happenglobally and, given that the
only sort of changes are localstandards, local codes, it's
(20:28):
purely minor adaptations thatneed to happen to get us going.
John McMullen (20:34):
That's very exciting, very exciting.
What opportunities do you seefor the greater offsite and
modular housing industry in theUK?
DJ (20:43):
Yeah, I think there's still a massive opportunity.
370,000 new homes a year is abig, big number, so I think
there's plenty of opportunitiesfor the existing players and
also new players in the markets.
So there's several high profilevolumetric factors that have
failed, but it's been clear whythey failed and I think a lot of
(21:05):
learning has happened.
And the challenge with that isthat has caused massive
instability in the offsitesector in the UK and there's a
general nervousness now,especially sort of geared
towards single family.
What's really interesting isfully volumetric solutions work
(21:26):
exceptionally well in othersectors.
So health, education,hospitality, students you know,
when it's a high rise or aschool, fully volumetric is the
perfect solution.
It's just not quite the rightsolution today for residential
Now.
In 10 years, 15 years, when themarket's settled, there's loads
(21:52):
more automation.
That's happening.
I think.
Yeah, fully volumetric will bethe way to build new houses and
full homes will come out of afactory in the UK.
There's no doubt about it.
But I think today, as we'rebalancing where we are in terms
of manufacturing capabilities,also, the skill shortage that's
a huge, uh huge challenge in theuk now and that's only going to
(22:12):
get worse over the next fewyears.
There's not enough people thatcan install the right mvp.
There's not enough people thatcan do some of the site labor
stuff, which is why we're seeingthat balance between actually
taking some of the laborintensive processes into a
factory that changes theecosystem a little bit.
So, yeah, there's definitely ahuge opportunity.
John McMullen (22:32):
For those interested in making an impact
on housing in the UK througheither building or providing
some other form of product orservice.
What advice would you offer?
DJ (22:43):
So I think the main thing at the minute is we're still
waiting on more clarity from thegovernment, right?
So what is this new standardgoing to be that's hopefully
going to be enforceable?
What is the funding situation?
Is there any more funding?
Is there a funding target?
So there's a few questions thatneed to land.
First, and I think you know, ukis a challenging market, right,
(23:04):
it's got probably some of thehardest planning regulations
globally, but there needs to bea degree of flexibility that
comes with the solution thatyou're thinking of, Because,
yeah, that planning is just achallenge.
The exciting part, though, is,as I mentioned, there's a
massive, massive, massive demand, but with that, we need to make
(23:24):
sure that the new ways ofbuilding homes don't devalue
what we do as an industry, right?
So this can't be a new race tothe bottom.
This isn't about building.
It can't be about building thecheapest house possible, because
we're just setting ourselves upto fail in five, 10 years time,
when we start seeing qualityissues manifesting themselves.
(23:47):
People are built to the wrongspecification, heating costs are
going through the roof, so wejust need to make sure that we
don't trigger that landslide,and, at the minute, the UK is
quite distinctive in thatthere's two hard really too hard
really.
There's a social housing,affordable and built to rent.
(24:08):
Developers who are currentlydefinitely focusing on building
higher quality, efficient,healthy homes that they own the
assets for 20, 30, 40, 50, 60years, who are going towards mmc
for the benefits of higherquality, higher standardization.
And the flip of that is yourbig volume house builders that
(24:29):
are more focused on building tocurrent building regulations and
have the challenge of they canonly build as fast as they can
offload, so as fast as they cansell them, so there's no real
incentive for them today tobuild faster.
So speed is not interesting.
However, the big benefit forthe volume house builders is
that there's a massive skillshort, as I've just mentioned,
(24:51):
and the only way to fix thatshort term is by using MMC and
offsite manufacturing.
John McMullen (24:57):
So tell me about what's next for you and what's
next for Sano.
DJ (25:00):
Yeah, so it's about keep on empowering the construction
industry and, more importantly,governments as well, to help
define what this specificationis, so that we're building
better, sustainable, healthyhomes.
Everyone deserves to live in ahome that is not detrimental to
their health, so it's aboutestablishing this manufacturing
ecosystem in the US as well.
(25:21):
And also, what does the rest ofthe world look like?
So the UK is a big market, theUS is a huge market.
Actually, this is a globalsolution.
What market should we bechallenging next?
And then, finally, we're alsolooking in the next few months
to bring in some externalfunding to support this global
(25:41):
rollout post, our sort of reallypositive UK validation period.
Well, very good, you mentioneda global rollout post, our sort
of really positive UK validationperiod.
John McMullen (25:47):
Well, very good, you mentioned a global rollout.
That sets up my next question.
Nicely.
You may have heard MBI iscoming to Europe.
It's bringing its World ofModular event to Brussels in
October.
Are we going to be able to seeyou there?
DJ (26:02):
Absolutely.
I'm super excited about it.
Actually, I think I definitelyattended the one that was long
ago in Florida and that washugely popular and gives a
really good insight into offsitein the US.
But super excited aboutBrussels, I think there'll be
some new partners that we've notspoken to before.
There'll be new connectionsThere'll be and I've seen the
(26:23):
program and it's looking superexciting.
John McMullen (26:26):
Well, excellent.
I'm excited.
Thank you for coming to thatevent in advance.
It's going to be a great event,so we're definitely looking
forward to that.
DJ, thank you so much for yourtime.
I really appreciate it.
You've got a lot of excitingthings happening.
I'm looking forward tofollowing you and following Sano
here in the near future.
(26:48):
Brilliant, thank you, John.
Thank you so much for having meon, really appreciate it.
My name is John McMullen andthis has been another episode of
Inside Modular, the Podcast ofCommercial Modular Construction.
Until next time.
.
Hello and welcome to Inside Modular, The Podcast
of commercial modularconstruction brought to you by
the Modular Building Institute.
Welcome everyone.
My name is John McMullen.
I'm the Marketing Director hereat MBI.
Today I'm joined by DJ,co-founder and COO at UK-based
Sano.
DJ is here to talk about thecurrent housing challenges
(00:22):
across the United Kingdom andthe potential for his company's
systems to make a difference.
D welcome.
DJ (00:29):
Hi, John.
It's my pleasure.
John McMullen (00:32):
So, tell Dm about yourself, dj.
What's your background and howdid Sano come to?
Tdefinitely not from thisindustry.
So my background was chemistry,did a degree in chemistry and
then a PhD in nuclear chemistry,so very much not from the
industry.
I then joined a startup lookingat vaping and tobacco
technologies and that's where Imet Sano's co-founder Ross, and
(00:53):
between us we had various roles,looking from product design,
product development, productinnovation, looking at
manufacturing.
So how do we manufacturedevices?
How do we manufactureconsumables?
Where do we manufacture umdevices?
How do we manufactureconsumables?
Where do we manufacture them?
So this involved finding abuilding um, and it was an
ex-pharmaceutical site.
So 100,000 square feet, uh, 15grade d clean rooms.
(01:16):
It was all about, you know,understanding about air handling
in a pharmaceutical site andhow do we switch the building on
, and there was a whole raft ofideas.
And this startup then gotacquired by a big ftse 30
company and then becameresponsible for the vision team,
which was a team that wasreally looking forward five, ten
years ahead into the future togo actually, what does the world
look like in terms of products?
(01:37):
And from that then workingbackwards to go what sort of
patent and ip should we befiling today so that that in
5-10 years time, when the worldhas moved on and consumers have
moved on, we've got the patentsewn up, ready to go and become
market leaders.
And then there's an opportunity,over this sort of weird COVID
period, for me and Ross toescape and we thought, well,
(02:00):
what should we do next?
And it was about well, we'reall at home.
At that time as well, wediscovered that Ross had a
massive mold sensitivity.
So we thought, actually this islinked back to some
accommodation that he lived in20 years ago, and then this was
just before mold became a bigthing in the UK.
So we were thinking, actuallythere's got to be a better way
(02:21):
to build and live in houses.
So we thought, well, how do wecreate healthy homes for
everyone to live in?
From that then, sano sort ofstarted focusing on healthy
homes, healthy materials,healthy living, fundamentally
looking after how should we belooking after the occupants?
Wow, that's quite a journey.
(02:42):
That's amazing.
I love your approach tothinking ahead and working
backwards and coming up.
That's smart.
So Sano is trying to buildbetter housing.
So tell me about yourorganization, how it's set up.
How are your days spent?
What do you do day to day?
DJ (03:07):
It's all about empowering the construction industry.
So we sit here, we identifyproblems, figure out how we fix
the problems, but by thinkingmuch more broader than sort of
thinking about the problem inisolation.
So we're all about stepping back, zooming right out, and because
we're not from the industry,you know we haven't got any sort
of baggage or super constrainedviews.
You know so we can be too superholistic, zooming right out, and
it's about you know so we canbe super holistic, zooming right
out.
And it's about you know Sano'sall about creating high quality,
(03:30):
efficient, healthy andsustainable housing for everyone
and massive, massive believersthat everyone deserves to live
in a house that does not impacttheir health negatively, and I
think that's some of the broaderchallenges that we're trying to
fix.
And so, as part of sano, it's asmall, diverse, multi
(03:51):
multidisciplinary team, so lessthan 10 people, but it's about,
you know, the, the collectivepower of the group of people
that makes sano special.
You know you don't need big of40, 50 people to have something.
That's really cool, and that,for me, is what Sano is about,
and it's about solving theseproblems.
And then the way we protect oursolutions is really interesting
(04:16):
that we file patents, which issomething that happens quite a
lot in the construction industrybut rarely spoke about.
John McMullen (04:23):
How would you and I want to get back to those
patents in a bit, but how wouldyou describe the housing
situation in the UK right now?
DJ (04:32):
Yeah, it's absolutely, really interesting.
So we are a couple of monthsinto a new government now as
we're recording this, so it's ata pretty critical turning point
.
And you know we're well into awell-documented housing crisis
and off the back of that there'san unprecedented demand for new
housing.
(04:52):
But the challenge is the numberof new house completions is
just stagnating and isn'tgrowing at the same rate, so
that demand is just looming farbeyond the capacity.
So last year, for example, inthe UK we built about 220,000
(05:13):
new homes, which on the face ofit sounds like a big number, but
the target has been about300,000 new homes.
There's always been that lagthere.
And then of that sort of backin 2017, about 9% were mmc, and
back in now in 2023, about 16percent was mmc.
(05:33):
And then some of the otherchallenges that are currently
faced in the uk is the temporaryhousing or temporary
accommodation crisis, of whichuk government is spending about
five million pounds per daytemporarily housing people.
I just haven't got anywhere tolive, which is just an
absolutely shocking stat and itjust shouldn't be a thing.
(05:54):
And then, with that as well,there was a.
There's been a few initiativesby local local governments where
tenants could purchase theirproperty at a heavily discounted
price, which is great, butthere's rarely been a plan to
replace the stock.
So I think there's just a bitof a perfect storm at the minute
(06:18):
, in that there's a massivedemand, massive need for new
housing, and we'll get onto it.
But MMC for me, or a modularconstruction, has got a big, big
role to play in that.
On the flip of that, there'ssort of one big watch out.
For me is that we need to makesure that we're setting and
(06:39):
building to the right standard,because we can very much open a
flood case and go we, we need tobuild, build, build, build,
build.
But actually building to thewrong or poor standard will only
exasperate the problem furtherdown the line.
John McMullen (06:54):
You mentioned before housing stats from last
year.
You mentioned local governanceinitiatives.
I know the UK recently wentthrough a larger government
transition.
What's being done by the newgovernment to generate new
housing possibilities and how,if at all, is this different
(07:14):
really from the last government?
DJ (07:16):
Yeah, really, really good question, and it's still early
days.
But there's loads of positivenoise coming from central
governments and honestly, Ireally think that they are
trying to do the right thing.
But for that to manifest thematerial itself, the whole
industry needs to get behind itand get cracking.
You know, we need to getbuilding as soon as possible and
(07:40):
there's loads of earlyinitiatives that they've started
talking about.
So, for example, changes to theplanning regulation, which
historically in the UK has beena bit of a massive blocker to
sites.
So these changes, coupled withunlocking more land, should
speed up the process, but alsoshould give developers more
(08:02):
confidence that actually, bygoing into a planning
application, they'll come out ofthe other end with a positive
outcome, whereas at the minutepeople are going into a planning
process expecting a two, threeyear, if not longer, journey,
whereas you know, quite frankly,there's just not enough time
now to go on that processAlongside that.
(08:26):
So I mentioned the 300,000targets that's now been
increased to 370,000 new homestarget to build every year.
That's a massive number, right?
So compared to the 220,000 thatwas built last year, it's a 70
odd percent increase and, as youknow, you just can't switch
that on overnight.
So there's a massive growthphase that needs to happen
(08:47):
pretty quick now to get us tothat target number.
Uh, alongside that, localauthorities so local, um, local
governments have now been givena housing target.
So they did have our nuggets,they got taken away.
We sort of relaxed the wholething a little bit, but now
they've been given a targetagain, so that should promote
(09:08):
people to get building again.
And also, local cities or localcounties have been given more
control and power over whathappens locally and also how
local funding is spent.
So actually historically it wascontrolled centrally, but now
that's being devolved more intolocal counties.
So actually they've got bettercontrol over what happens
(09:29):
locally.
But to sort of get this ballrolling, there does need to be a
significant section of cash toget it moving.
I think that that's going to bean interesting barrier to
overcome.
Now to support that, there issome relaxation of some of the
financial regulations thatshould make it easier for local
authorities localgovernment-based to sort of
(09:51):
borrow funds against some of theassets that they've already
disposed.
So that might just help bridgethat gap a little bit.
And what's really exciting isthat there is a commitment to
new homes being sustainable andaffordable and high quality.
So they're all the rightbuzzwords to sort of get mmc and
off-site constructionintegrated into this new housing
(10:13):
target, but there's no furtherdetail on that as of yet well,
as you said early days, earlydays.
right, there's a good journey togo on, and definitely early
days, but I think in the overthe last few weeks I there's a
good journey to go on, anddefinitely early days, but I
think in the last few weeks, Ithink there's some good,
positive noise and it's now justabout keeping the momentum on
top of that, not only from agovernment perspective, but also
as an industry.
(10:34):
Right, we just need to getcracking and go behind it rather
than sort of having this sortof infighting, debating over
what does this mean, what doesthat mean?
Let's just crack on and getbuilding.
John McMullen (10:51):
Sano has a tagline that I really like.
It's leading global housinginnovation from behind the
scenes, and you mentionedearlier in the interview forward
thinking, working back a lot ofpatents that you're filing.
Tell me about what your taglinemeans and how your work goes
into that.
What is what is Sano doing toinfluence how people live in the
UK now?
DJ (11:10):
Yeah.
So Sano is all about empoweringother people to make better
choices and better decisions,and we're about giving people
the right ingredients and givingthem, you know, the cake that
they should be baking.
Yeah, and that, for me, is thereally exciting part.
So we're not sat here going.
We must create the next biggestbrand in X, y, z.
(11:31):
So that's not what Sano's about.
Sano's about getting all thebits together, getting all the
science sorted, getting all theproduct development done,
getting all the technicalinformation sorted and aligned.
Staple that together as a packthat can then go out to the key
stakeholders, whether you're aproduct developer, a
(11:51):
manufacturing facility, anarchitect, a gc, and it's about
giving all these people theright information as early as
possible in the process.
And yeah, there's loads of goodexamples of products out there
that you know have been inventedand no one has any idea who
came up with that idea?
Right, you could be stood rightnext to them in starbucks and
you'd have no invented.
And no one has any idea whocame up with that idea?
Right, you could be stood rightnext to them in starbucks and
you'd have no idea.
And that is what's reallyexciting about sano coming up
(12:13):
with all these ideas are notactually being too fussed about
the fame and the glory that comeof it.
We're all about actually.
People should be living inhealthy homes.
John McMullen (12:24):
Let's just get there as quickly as possible
speaking of of products, I wason your website.
One of the most prominent oneson your website is a system
called MDOC.
Tell me about MDOC.
How does it work exactly andhow does it differ from typical
volumetric modular construction?
DJ (12:41):
MDOC was one of our very first products.
We were initially looking atthe US market and also looking
at built to rent funds and howcould they quickly deploy
capital to get a good return andwhat sort of products would
they be building?
If I was a built to rent fundand it was all about, actually,
I need a product that's of goodquality, good specification,
(13:04):
because if I'm going to own thisasset for 30-40 years, I need
to know that I haven't got to goback and fix any problems.
And so we started looking atoffsite manufacturing, looking
at bath and pods and again, notbeing from the industry, this
was all sort of new.
A few years ago I thought thisis really exciting.
But then we sort of quicklyrealized that actually,
especially for a UK market,building fully volumetric single
(13:28):
family houses was going to be abit of a challenge because of
various manufacturing reasonstransport issues, there's
challenging roads in the UK, sothere's not many sites that are
easily adaptable for a fullyvolumetric solution.
So we thought there's got to be.
But manufacturing the factorydoes make sense.
So we thought there's got to be.
But manufacturing in a factorydoes make sense.
(13:48):
So we thought there's got to bea better way of doing this.
So then we concentrated all ofthe sort of high service areas
your MEP or your air source heatpumps, your heating interfaces,
your consumer units, yourplumbing bathrooms.
We thought that actually, as amodule or a pair of modules,
does make sense to bemanufactured in a factory.
(14:09):
So we thought actually let'sjust focus on concentrating that
in a factory and then the purevolume of the house your kitchen
, living, dining, bedroom spacesactually there's a bit of a
misconception actually makessense for them to happen in a
factory?
We didn't think it did.
So we thought let's just use apanelized system to complement
and create them spaces.
(14:30):
And so that's where mcom camefrom.
So it's a hybrid buildingsystem where it's part modular
and part panelized and it'sabout creating the right product
in the right environments.
So it's taking a standardizedmodule that can be manufactured
in a modular factory and astandardized panelized element
that can be manufactured in amodular factory and a
standardized panelized elementthat can be manufactured in a
(14:50):
standardized way in a panelizedfactory, and then these come
together on site to create ahouse that can have flexibility
in size.
So the same module, for example, could work for a two bed,
three bed or a four bed house.
John McMullen (15:05):
The right ingredients for the right cake.
That's exactly it, exactly.
I like that.
So tell me about yourmanufacturing process.
What is that like?
Really interesting question.
DJ (15:15):
So, as Sano, we haven't got a factory and we have no
ambitions to open up a factory.
As I said earlier, we're allabout empowering the ecosystem.
So it's about Sano doing all ofthe clever and hard thinking
and solving all of the problemsso that, when it comes to
manufacture, the manufacturingfacility can focus on
manufacturing, which is exactlywhat they're really good at.
So how do they get the processbetter?
(15:36):
How do they improve the quality?
How do they get them out faster?
And it's just about gettingthat balance right.
And from me and from experiencein the UK over the last few
years, as we've seen some prettyhigh profile failures.
The challenge has always beenfactories having to diversify a
little bit from their corebusiness to try and keep the
(15:57):
factory busy, because the nextorder is a few months away and,
as you know, having a factorythat's not manufacturing
anything is an absolutenightmare.
John McMullen (16:06):
It is indeed.
So tell me about youraffordable housing solutions.
How do they work?
DJ (16:12):
So we developed a standard set of floor plans that are
destined for the affordablemarkets and the idea is
developed two core modules andthese modules have got all of
the complicated bits.
So your main entrance, all theMEP downstairs toilets and then
your upstairs family bathroom.
The idea is we've got somemanufacturing partners lined up
to manufacture these and we'vegot a range of panelized
(16:37):
partners that can alsomanufacture the panels, and so
the idea is that these are allstandardized, all ready to go,
all compliant with spacestandards and building regs in
the UK.
So it's a super slick copy,paste, drop and go model, and
the beauty of the way we've doneit is that everything doesn't
(16:58):
have to look the same.
So, historically, the challengewith modular is everyone wants
something different but they allhave to fit in that sort of box
, whereas we're saying, actually, if you want a house that's
slightly wider, that's great,let's order a slightly bigger
panel to make it bigger, but themodular bit can always stay the
same.
John McMullen (17:18):
What kind of feedback have you gotten so far
about your MDoc solutions?
About your MDoc solutions?
It's been a really interestingjourney.
DJ (17:25):
So we've started this a few years ago and at the time we
started, fully Volumetric wasthe show in town and everyone
was sort of spending a lot oftime looking at fully modular
houses.
But over the last 18 months, aswe've sort of seen the
challenges with some of theFully Volumetric factories,
we've seen a massive uptake inhow many people are talking more
(17:49):
of the hybrid language aroundbringing a pod or a module
together on site with apanelized system.
Now it started off withbathroom pods and kitchen pods
and you know, sano aredefinitely not the first company
to come up with a pod and panelapproach.
That's been around forever, butI think not the first company
to come up with a pod and panelapproach.
That's been around forever.
But I think we're the first tocome up with it in the way we've
done it, so that it's trying tokeep a standardized core
(18:13):
sitting with a flexible dock, aswe call it, which is that
site-built structure.
So the feedback has beenamazing and as we get sort of
further and further along, we'rehearing more and more positive
noise around.
Actually, hybrid is the way Iwant to do hybrid.
I can only see single familyhomes now being built in a
(18:34):
hybrid fashion.
So, yeah, super positive, and Ithink it's now time to just
supercharge that and getbuilding more houses.
John McMullen (18:41):
You mentioned developing MDoc in response to
the challenges of deliveringfully volumetric modular systems
in areas of the UK.
Do you see a potential for thistype of system working in the
US, or are you focusing strictlynow on UK and Europe?
DJ (18:59):
Yeah, 100%.
So we're to the point now whereactually we've got a really
good manufacturing supplyecosystem sorted.
We've got a number ofarchitects on board that can
deliver this.
We've got a few maincontractors or general
contractors that can deliver thesystem.
The whole technical pack, thewhole ecosystem is there, ready
to go for the UK and, given thatUK, with a challenging
(19:22):
environment, was a really goodtest market for us.
The next plan is to tackle theUS, because some of the work
that we've done and currentlydoing with a few smaller
developers in the US, actuallythe system, the hybrid approach,
works really well for biggerhouses as well.
So a lot of the UK is centeredaround about a thousand square
(19:44):
feet, whereas in the US a smallhouse is 1,500, 2,000 square
feet, and the work that we'vedone shows that this works
really good.
By incorporating some morevalue into the module, so we can
have a slightly bigger entrancehallway, we can now start
adding elements of the kitchenor a back entrance into the
(20:04):
module.
We can include more bathroomsin an upstairs module if it's a
two-story dwelling.
So there's definitely,definitely value in this in the
us.
And that's the whole beauty ofoff-site right.
It removes geographicboundaries.
The same system can happenglobally and, given that the
only sort of changes are localstandards, local codes, it's
(20:28):
purely minor adaptations thatneed to happen to get us going.
John McMullen (20:34):
That's very exciting, very exciting.
What opportunities do you seefor the greater offsite and
modular housing industry in theUK?
DJ (20:43):
Yeah, I think there's still a massive opportunity.
370,000 new homes a year is abig, big number, so I think
there's plenty of opportunitiesfor the existing players and
also new players in the markets.
So there's several high profilevolumetric factors that have
failed, but it's been clear whythey failed and I think a lot of
(21:05):
learning has happened.
And the challenge with that isthat has caused massive
instability in the offsitesector in the UK and there's a
general nervousness now,especially sort of geared
towards single family.
What's really interesting isfully volumetric solutions work
(21:26):
exceptionally well in othersectors.
So health, education,hospitality, students you know,
when it's a high rise or aschool, fully volumetric is the
perfect solution.
It's just not quite the rightsolution today for residential
Now.
In 10 years, 15 years, when themarket's settled, there's loads
(21:52):
more automation.
That's happening.
I think.
Yeah, fully volumetric will bethe way to build new houses and
full homes will come out of afactory in the UK.
There's no doubt about it.
But I think today, as we'rebalancing where we are in terms
of manufacturing capabilities,also, the skill shortage that's
a huge, uh huge challenge in theuk now and that's only going to
(22:12):
get worse over the next fewyears.
There's not enough people thatcan install the right mvp.
There's not enough people thatcan do some of the site labor
stuff, which is why we're seeingthat balance between actually
taking some of the laborintensive processes into a
factory that changes theecosystem a little bit.
So, yeah, there's definitely ahuge opportunity.
John McMullen (22:32):
For those interested in making an impact
on housing in the UK througheither building or providing
some other form of product orservice.
What advice would you offer?
DJ (22:43):
So I think the main thing at the minute is we're still
waiting on more clarity from thegovernment, right?
So what is this new standardgoing to be that's hopefully
going to be enforceable?
What is the funding situation?
Is there any more funding?
Is there a funding target?
So there's a few questions thatneed to land.
First, and I think you know, ukis a challenging market, right,
(23:04):
it's got probably some of thehardest planning regulations
globally, but there needs to bea degree of flexibility that
comes with the solution thatyou're thinking of, Because,
yeah, that planning is just achallenge.
The exciting part, though, is,as I mentioned, there's a
massive, massive, massive demand, but with that, we need to make
(23:24):
sure that the new ways ofbuilding homes don't devalue
what we do as an industry, right?
So this can't be a new race tothe bottom.
This isn't about building.
It can't be about building thecheapest house possible, because
we're just setting ourselves upto fail in five, 10 years time,
when we start seeing qualityissues manifesting themselves.
(23:47):
People are built to the wrongspecification, heating costs are
going through the roof, so wejust need to make sure that we
don't trigger that landslide,and, at the minute, the UK is
quite distinctive in thatthere's two hard really too hard
really.
There's a social housing,affordable and built to rent.
(24:08):
Developers who are currentlydefinitely focusing on building
higher quality, efficient,healthy homes that they own the
assets for 20, 30, 40, 50, 60years, who are going towards mmc
for the benefits of higherquality, higher standardization.
And the flip of that is yourbig volume house builders that
(24:29):
are more focused on building tocurrent building regulations and
have the challenge of they canonly build as fast as they can
offload, so as fast as they cansell them, so there's no real
incentive for them today tobuild faster.
So speed is not interesting.
However, the big benefit forthe volume house builders is
that there's a massive skillshort, as I've just mentioned,
(24:51):
and the only way to fix thatshort term is by using MMC and
offsite manufacturing.
John McMullen (24:57):
So tell me about what's next for you and what's
next for Sano.
DJ (25:00):
Yeah, so it's about keep on empowering the construction
industry and, more importantly,governments as well, to help
define what this specificationis, so that we're building
better, sustainable, healthyhomes.
Everyone deserves to live in ahome that is not detrimental to
their health, so it's aboutestablishing this manufacturing
ecosystem in the US as well.
(25:21):
And also, what does the rest ofthe world look like?
So the UK is a big market, theUS is a huge market.
Actually, this is a globalsolution.
What market should we bechallenging next?
And then, finally, we're alsolooking in the next few months
to bring in some externalfunding to support this global
(25:41):
rollout post, our sort of reallypositive UK validation period.
Well, very good, you mentioneda global rollout post, our sort
of really positive UK validationperiod.
John McMullen (25:47):
Well, very good, you mentioned a global rollout.
That sets up my next question.
Nicely.
You may have heard MBI iscoming to Europe.
It's bringing its World ofModular event to Brussels in
October.
Are we going to be able to seeyou there?
DJ (26:02):
Absolutely.
I'm super excited about it.
Actually, I think I definitelyattended the one that was long
ago in Florida and that washugely popular and gives a
really good insight into offsitein the US.
But super excited aboutBrussels, I think there'll be
some new partners that we've notspoken to before.
There'll be new connectionsThere'll be and I've seen the
(26:23):
program and it's looking superexciting.
John McMullen (26:26):
Well, excellent.
I'm excited.
Thank you for coming to thatevent in advance.
It's going to be a great event,so we're definitely looking
forward to that.
DJ, thank you so much for yourtime.
I really appreciate it.
You've got a lot of excitingthings happening.
I'm looking forward tofollowing you and following Sano
here in the near future.
(26:48):
Brilliant, thank you, John.
Thank you so much for having meon, really appreciate it.
My name is John McMullen andthis has been another episode of
Inside Modular, the Podcast ofCommercial Modular Construction.
Until next time.
.
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