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      Composite Building Structures, Ltd.

        Stronger, Safer, Longer Lasting, cost effective support framing for homes and buildings

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                    Q & A

"One of the more promising products, being developed by Composite Building Structures, Ltd., Fort Myers, is a high-tech fiberglass composite that can be used to make the frame and shell of a house."

Wall Street Journal - Marketplace Section - 11/23/05  (See Article)

 

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Questions & Answers

    We asked ourselves a lot of questions before starting this business in order to maximize efficiency, utilize a superior material, and make it profitable against well entrenched materials and methods.  The following questions and answers outline the rationale we used in creating this business to provide higher quality homes at a lower cost.

The Composite alternative to concrete, wood, and steel framed homes

 What is a Composite?
            A composite is a mixture of raw materials that when combined have performance characteristics superior to any of the individual raw materials.  This synergistic effect allows engineers and chemists to create compounds with specific properties matched exactly to the requirements.   A familiar example would be the ladder industry.  Wood ladders have been replaced by fiberglass composite ladders in different colors.  Each color indicates a different support strength, yet the size of the side rail remains constant.  The mixtures of resins and fiberglass are changed to create higher strengths with the same size profile and then color coded to indicate the differences. 

 What is a Composite Home?
            It is a home built to and surpassing all the existing building codes using the same finishing materials and methods as the other construction types. From the exterior, it has no different look. From the inside there is no different look. The difference is inside the exterior walls. 

Concrete blocks or wood 2x4s have simply been replaced by Advanced Construction Composites that have superior strength and longevity.  This substitution makes the home stronger, safer, longer lasting, cleaner, and more insulating so that composite framed homes are more economical to own, have lower monthly utility bills, and have higher resale values.

 

 What is it like to live in a composite home?
            Outside noise is attenuated.  Insulation that is 367% more insulating than a wood wall (or 682% more insulating than an insulated concrete block wall) saves on your utility bills.  While this home does not reach the ideal of being heated with a match or cooled with an ice cube, it does have the best thermal efficiency commercially available. 

The walls are impervious to water so the insulation can never wet out and loose efficiency as can fiberglass or a sprayed in foam insulation.  The walls are tight so air leaks do not remove the heated or cooled air.  No water leaks in to start mildew or black mold growth.

            There is more inside space (1.5 square feet for every 3 feet of perimeter wall) when our composite 2x4 wall replaces an 8-inch concrete block wall that is 10-inches thick (including insulation & finish materials).

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Links to Sections of the Q & A

Opportunity Developers Plan
Profitability Potential Home Buyers Domestic Market
Technique Economic Development Officials International Market
Technology Government Officials Products
Architects Financiers Niche
Builders Lumber Producers Potential Problems
Panel Builders Steel Suppliers Related Opportunities
Modular Builders Green Promoters Next Steps
SIP Panel Manufacturers    

 

Opportunity

 

Why are we doing this?
            The home building industry is one of the largest industries in the world that has a mandate to supply worldwide housing needs that grow every year as the population expands.  Automation in the building process has not been accomplished as it has in all the other significant industries.  There is a critical need to build homes in certain sections of the United States, Central, and South America to a higher standard that use sustainable-affordable materials to be hurricane proof, termite proof, black mold proof, and ecologically acceptable.  We are targeting that critical need. 

What are the problems?
            Existing building codes, methods, and materials make building to a higher standard very expensive and there is no code requiring construction strong enough to meet insurance standards.  In coastal areas, private insurance companies have pulled out and refused to underwrite the potential damages leaving State or Federal insurance pools to underwrite the risks.  Even the strongest codes are not strong enough to entice private insurers back.  Our higher standard can be privately insurable. 

What drives the industry?
            Low price drives the building industry.  Acceptance by developers, builders, and homeowners is ultimately based on lower price first and cost/performance second.  All the features and benefits mean little if the end product costs more unless the buyer agrees to pay for each upgrade cost.  Composite walls cost less and provide superior cost/performance.

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Profitability

How can we add value?
            By offering lower price, greater convenience, and removing problems faced by builders, we can capture a significant portion of the building industry.

What is the opportunity for profit?
            Potential for profit is created by building parts of the home in a factory, under strict quality control, transporting them to the building site, and then erecting them as a service to the builder.  By manufacturing the exterior load bearing walls in panels up to 40-feet long, an entire house frame can be erected in one day so that the structure is protected against the elements and secured against damage or theft.  We save developers time and money by eliminating up to 5 different trade crews, drying in their houses faster, and enabling them to complete more houses each year with the same number of finishing crews.  They profit and we profit because they can make more profit faster and easier.

How much profit can be made?
            Panelization offers the greatest potential for profitability by a supplier to the building industry compared to building block by block, stick by stick, by kits, or by modules.  Forty-one percent (41%) of all wood homes in America are now being built using factory built panels because of the labor savings.  Of all the various types of building methods panelization creates the highest percent profit for the panelizer.  In just our section of Florida and the Caribbean, we should be able to generate $266 million in profit within our third year of business.      

What will it take to get that profit?
            To maximize our profit, we will have to create an economy of scale like the steel, petroleum, and automobile industries do.  We will have to add into the panel as many of the subcomponents as possible (like all the parts going into a car in its factory).  We will arrange to have all the subcomponents manufactured in one large industrial park containing the resin, composites, sheeting and the panel plants.  The industrial park is called a Business Technology Campus (BTC) which costs about $42 million to establish.

One Corporate Office will provide all the support services common to each of the component manufacturing plants to reduce their individual operating costs.  Each plant will have a built in customer, no sales costs, no delivery cost, and almost no scrap.  Locating each BTC in a rural area provides low overhead facilities and makes available multiple State and Federal Assistance programs.

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Technique

What should be our goals?
            To make Advanced Construction Composite framing the material of choice for all builders – worldwide 

What should be our mission?
            To continuously improve our core competency by offering builders increased profits and faster building while creating safer, stronger, longer lasting economical homes for the homeowners.

 What should be our methods?
            Create a Business Technology Campus to bring together all the manufacturing at one location, achieve the economies of scale there through vertical integration, and serve builders in the fastest growing territories of the markets with the greatest need for composite panel benefits.

 What should be our materials?
            Wood, cement, and steel have deeply penetrated the building industry and are commodity products with low profit margins and greatly fluctuating price cycles.  Composites are new to the industry and our patents provide profit margin protection through selling only to our licensees.

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Technology

What is the Technology?
            Fiberglass pultrusions replaced wood as the sides of ladders across America.  We are simply replacing concrete block with Advanced Pultruded Construction Composite panels in sections of the country where wood cannot be used because of harsh environmental conditions.  The new Boeing Dream Liner 787 is over 50% composite and composites have been used extensively in military aircraft for many years. Composites are now taking over the civilian and commercial aircraft industry just as they did the ladder industry.

What do we have?
            In addition to extensive manufacturing experience, a first class research facility, and an in-house manufacturing capability, we have over 15 patent applications and 2 patents issued for the use of composites in support framing and panelization. We have assembled a superior senior leadership team from major industry, and a network of strategic alliances supporting this business.  We sell only to licensed builders and erect only with authorized riggers.   

What do your products look like?

            Pultrusions and other composites are highly engineered. Working with architects and designers we apply their specifications to optimized designs for the best cost performance. A wide variety of differing strengths are possible in identically shaped parts by using a variety of resins combined with a variety of fibers to create superior performance at a lower cost. For that reason, pultruded parts are often hollow or have thin wall sections. Although they may look skimpy, they are actually the stuff that race cars, airplanes and space craft are made of.

 

Why are they better?
            600 pounds of resin and 2,000 pounds of Advanced Construction Composite (1.3 tons) will replace 40 tons of concrete block or 13 tons of wood (over an acre of natural forest resources) with better performance and longevity.

            Per square inch, pultrusions have approximately 875 times the compression strength of wood and 1,700 times the flexural strength of wood. Compared to concrete block, optimized pultrusions have 400 times the compression strength and 7,000 times the flexural strength. It is often said by engineers ~ inch for inch, composites are stronger than steel and lighter than wood.

 

Why is that important?
            Aside from the lower initial costs, energy savings, and ownership costs; composite homes are stronger and safer for the occupants.  Private insurance companies will underwrite composite homes and buildings in hurricane areas that they abandoned or on which they escalated rates, homeowners will not have to live in monthly pesticide treatments, water can not damage the insulation or rot the home exteriors.

            Composites are fireproof, lightening proof, and impervious to insects and rodents.  Because they flex under strain, they have more resistance to earthquakes, tornados, or hurricanes than any other form of construction and after the force is removed, they recover back to their original shape like a bow after it launches an arrow.

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Architects

 

Why haven't we heard about this, are you in production?

            These products were announced at the Southeast Builders Conference during August 2006. Pre-production orders are being taken for delivery in December 2006, one year after the bulk of the patents were filed. Two Architectural Training Courses will be online in September 2006 with continuing education units awarded free. CBS will be able to deliver training to architects and design engineers and give them continuing education units after the training and test. CAD drawings of connections will be available to designers in October 2006.

 

Are these products certified under the building codes?

            The first generation parts were certified in 2000 by the SBCCI code body. All of the fifth generation component properties have been calculated and ASTM tested. All of the combinations of resins, fibers and lay-up architecture that we have designed in the fifth generation will pass all the codes in America.

            In the 3rd quarter of 2006 we are optimize the raw materials, die structures, machinery and manufacturing methods. The best combinations will produce test panels for testing at the Miami Dade Hurricane Test Center. All the combined test results and calculations wll be sent for certification in the 4th quarter of 2006. Any change after those tests in materials after submission requires us to resubmit for certification at a cost of approximately $70,000. By the 1st quarter of 2007 we will have all certifications in place.

            Before any certifications are issued, we will use PE stamped drawings to certify each build just as we have done for the other 24 homes that have been built with pultruded composites.

 

Is every piece exactly the same and do they have the exact same properties?

            Yes

 

Am I correct in supposing that I can choose any profile and you can create the strength I require in the part?

            Yes. Just about any strength you desire in the same size profile by changing the fibers, fiber orientation and the resin mixture using techniques developed in the aerospace industry. When the combination of materials is maximized, then, and only then, do we change the profile and make new dies.

 

Can you make custom designed home panels?

            Yes. In fact, each building shell is a custom to our production that can be delivered in 2 weeks and erected in 1 day (for typical 2,000 square foot house shell and roof). In addition to the panels we also can supply parts for building on-site (although most all of the labor savings are lost in this method) and parts for building modular homes in factories (although this is not a high speed production method). In this way all builders can take advantage of these better materials in their construction.

 

What about larger buildings than residential, do you build those too?

            We don't build homes ~ rather ~ the protective envelope skeleton. Many architects instantly recognize the value of using composite materials and have submitted large scale development plans for multi-storied buildings, schools, hospitals, and commercial buildings. CBS structural engineers and pultrusion experts have studied these requirements and been able to respond to almost all of their questions and needs in the affirmative. Our challenge as a developing company is to be able to respond quickly to all of the inquiries that we receive.

 

What is the cost?

            Comparable to or slightly less than the building system that is being replaced by the CBS system, regardless of whether it is wood, steel or concrete. We are always competitive and always have higher performance with longer life.

 

Do you have drawings I can add to the house plans as instructions to the builder?

            Yes. They are being provided in several electronic formats for designers to download and add to their software. These drawings are for the designers to add to their architectural plans and show how to connect and interconnect the composite parts. These drawings communicate the strength and assembly details. They should also be posted on our web site during the 3rd quarter of 2006 in a variety of formats for use by all the different software.

 

Can historic/unique architecture be preserved?

            Yes. Any exterior architecture or detailing can be duplicated or replicated. In fact, the only real way to see if the home is panelized with fiberglass walls or using a composite supporting skeleton is to ask the homeowner what is the average cost of their monthly energy bills. With insulation ranging from R-20 to R-40 in the composite walls, there is a great cost savings each month. One of the owners of a composite framed home in Naples FL pays less than $75 each month for his 4,200 square foot home. Other than increased comfort and lower operating costs, there is not any discernable difference from the outside look of the home. On the interior, however, the CBS home is more comfortable and just as sound proof as concrete block.

 

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Builders

 

How much does it cost per square foot?

            Depending on the complexity of the walls, the number of windows, doors, corners and interior walls secured to the exterior walls, the walls only prices range from approximately $4 per square foot to $11 per square foot installed, including hurricane straps, anchor bolts, all stainless steel fasteners and insulation.

 

Is every piece exactly the same and do they have the exact same properties?

            Yes

 

What comes in your panels?

            Whatever you specify. You specify the outside sheeting and we apply it. If you want us to put in the windows, doors, electric boxes and insulation for you, then you specify the parts and they are pre-installed when we erect the house shell. You then finish the architectural details on the exterior and the amenities on the interior.

 

Do you build and install the roofs?

            Yes. In fact we are developing a high quality all-in-one roof panel that will be put up with a crane in a completely finished state so that no one has to go up on a roof after it is installed. The high tech roof panel is multi-layered for excellent insulation, contains a radiant barrier over an air plenum that sweeps away built up heat from the sun in Southern climates.

 

Are your products certified? Will the building departments approve them?

            All of the component parts and assemblies are calculated and tested and produce walls that pass all the code requirements. We are continually optimizing the raw materials, lay-ups and manufacturing techniques. All the ASTM part testing and panel resting results are combined and sent for certification. Any change in manufacturing after certification requires us to resubmit for a new certification. By the end of 2006 all required certifications will be in place.

            Before certifications are issued, however, we use Professional Engineer (PE) stamped drawings to certify the strengths of each build. Because our designs are identical to wood support structures, except much stronger, everyone is familiar with wood construction and easily understands the part layouts knowing that it is just like wood except 800 to 1,700 times stronger.

 

Can the walls be built to 60 foot sections with continuous top & bottom plates, or do they have to be made in smaller panels and joined together?

            Because we make the parts to assemble in a continuous process and cut them to exact lengths, we can make a sill plate, top plate, stud or corner post to any length. We have found that a wall panel of about 36 feet is the easiest to transport in a standard 40 foot truck or container. We can make the panels to 60 feet length or longer provided that they can be transported to the site. The additional length requires that a larger crane be used to lift and set the panels and other special handling precautions apply.

            While most builders think of only the horizontal panels, we also make vertical panels so that the entire height of a gable roof end wall can be made with 30 feet long individual pieces.

 

Is the lightweight structurally reinforced concrete board that you apply, Hardi Board?

            CBS applies whichever sheeting the customer requests. Our preference for the interior single or double sheeting is to use plywood, OSB or magnesium oxide board. These in-line shear walls are built for 2 feet off each corner, at garage door openings and where interior walls join exterior walls.

            In certain applications the entire perimeter of the building can be constructed with the double in-line shear walls and cement (rigid) or elastomeric (flexible) stucco finish applied (this technique is also the design for building above-ground basements to lift homes out of the flood planes). After the corner shear walls and the preferred locations along the panel are fitted with double in-line shear walls, exterior sheeting is applied.

            Any exterior sheeting, Hardi Board, cement board, brick, plank, cedar half log or vinyl siding is attached in our factory. One of the new magnesium oxide boards has passed the hurricane impact testing and, when attached to the exterior, can be a superior base for stucco or elastomeric stucco. After the electric and plumbing is run, the inside walls are finished with gypsum board or a thinner magnesium oxide board.

 

Does CBS use both Lap Siding & Vertical (4'x8' sheets) Siding?

            Yes.

 

What is the difference between lightweight structurally reinforced concrete board and fiber reinforced cement board?

            A lightweight structurally reinforced concrete board or magnesium oxide board contains 2 layers of fiberglass matt or fiberglass woven fabric to pass the impact tests. Other concrete sheets use polyester or polypropylene randomly laid fiber or continuously laid reinforcement which holds the sheeting together, but may not be strong enough to pass the impact test. Fiber reinforced cement boards are filled with chopped short fibers of polyester, polypropylene or fiberglass and add toughness to the concrete board but also may not survive the impact tests.

 

Is the width of the rafter trusses cords 6 inches and are the web braces 4 inches wide?

            The trusses seen in many of the early applications of pultruded trusses followed the wood designs exactly and were not cost competitive and are no longer being manufactured for that reason. CBS engineers have produced an alternative multi-layered roof panel and will be in production of a 12 x 50 foot roof section in mid 2007. These new panel designs apply the superior properties of composites to make the roof stronger, safer, longer lasting, insulative and energy efficient.

 

What holds the insulation panels in place between rafters?

            The rafters seen in many of the early applications of pultruded rafters required 7 separate profiles to assemble. The insulation rested on the inside of an inverted "T" shape. The "T" top became a flange when it was inverted and the insulation rested on that. Because of the advances possible using composite roof sheets, CBS no longer supplies rafters.

            In our exterior walls the stud is shaped like an H-column or I-beam and the insulation is contained by the flanges and abuts the web of the stud. The web is about 1/8 inch wide. While wood makes up over 25% of each wall and is a poor insulator, composites make up only 7% of each wall and are excellent insulators. Composite walls contain 18% more insulation.

 

Can rafters be fitted with tie bars to create cathedral spaces?

            The underside of the roof panels form a natural cathedral ceiling and are prefinished. In certain large spans, tie bars or beams may be used when required by the CBS engineer. CBS roof panels must first withstand hurricane category 5 or better force winds. In other locations, CBS roof panels must carry 450 pound snow load. In every case, CBS roof panels will meet and surpass all the architectural requirements.

 

How are the hollow studs fastened to the top & bottom plates?

            CBS H-column studs (I-beams) and double H-column studs (double I-beams) are used on 24 inch centers and also as jack studs and cripples in a configuration identical to wood so that every designer or builder familiar with wood will be able to understand the CBS framing system. At the bottom of each stud, corner post or corner "T" is a stud mount that is anchor bolted to the concrete pad or bolted to the wood floor.

            In 2-story applications, the stud mount is also used at the top of each stud. The bolt hole from the top of the stud on the lower floor is connected to the bolt hole in the stud mount on the upper floor with a 1/2 inch threaded rod. In addition, there are straps between the pad and the stud, the lower stud to the stud on the floor above and from the top stud over the truss to withstand 3,500 pounds of uplift force.

 

Why can't the studs also be glued to the top/bottom plates, in addition to screws, for extra strength & support?

            They are glued. All of the aerospace applications use glue instead of mechanical fasteners. We use screws that are up to 8 times stronger than nails. Every stainless steel screw that we use is applied in shear (perpendicular to the force) whereas every nail is in tension (parallel to the force). Wood is end nailed or toe nailed and can frequently be pulled apart by hand. The CBS C-channel sill flanges wrap around the stud's H-column flanges and the screws are driven through the flange of the C-channel and through the flange of the H-column, and through the stud mount with a minimum of 5/8 inch thread contact and many threads of the screw securing the pieces. Steel C-channels and C-studs are often less than 1/16 inch total thickness and held with only one thread of the screw. This is a weakness pont should any corrosion or rust occur.

 

Are the doors & windows made by brand name manufacturers that the average consumer is familiar with?

            CBS will install any door or window provided that they have been tested to withstand hurricane force wind loads and the appropriate impact testing. When CBS builds and erects the protective envelope of the building, it must be assured that the doors and windows are not the weakest link. In fact, CBS has to certify that each window or door has passed physical hurricane testing and has been installed according to the manufacturer's instructions.

            CBS has patents in application that will enable such windows to be made at very low cost and installed to withstand hurricane and tornado forces without using screws, nails or adhesives. CBS has strategic alliances with the only door maker that has passed both the hurricane impact tests, the 283 MPH wind resistance tests, and the water impingement tests.

 

What is closed cell fireproof structural foam insulation?

            When organic resins are foamed, they react and harden. In some cases, the foam is caused by small bubbles that break as the resin sets - these broken bubbles create open cell foam. When the bubbles don't break they create closed cell foam. You can blow through open cell foam, you can not blow through closed cell foam.

            As the weight of one cubic foot of foam increases, it becomes more self-supporting. Foam weights start at 1/2 pound and increase until it is the weight of solid resins. As the thickness of the foam increases and the weight of the foam increases, it becomes strong enough to give additional strength to the structure in which it is used. These are called structural foam insulations.

 

What is expanded polystyrene insulation?

            Polystyrene pills are small balls of polystyrene that are expanded to many times their initial size with steam and fuse together in a mold. You have seen these polystyrene as the packaging peanuts used to ship fragile items to the shaped white plastic foam that protects TVs, computers, electronic gear and almost any other product during shipment. It is generally thrown away with the packaging.

            Structural Insulated Panels are made by gluing a thick sheet of expanded polystyrene insulation (EPS) between two sheets of OSB, plywood, cement board, gypsum board or mixtures of sheets. CBS can also use the EPS as insulation in addition to fiberglass, rockwool, open cell or closed cell foams as requested by the architect. In fact, using CBS support skeletons with EPS foam enables SIP panel makers to produce more panels each day by eliminating the need to glue, stack and press each of the panels while the glue dries. CBS SIP panels don't need to go through that process. They are made and shipped.

 

What if the finished wall panel inclusive of siding, windows, doors, electrical conduit, is damaged or undermined in transportation to the building site?

            CBS panels are combinations of the items specified by the builder. Because CBS is responsible to erect and certify the proper and complete envelope structure, CBS is responsible for the panels until the title in the panels (ownership) is transferred to the builder or owner at the time of installation.

 

Does CBS guaranty the safe transportation of the panels and everything else being trucked from their factory to the building site?

            Yes.

 

What would be the approximate cost per square foot of a 1600 sq ft rectangular house finished as much completed as CBS could finish it, with siding, roof, doors, windows, electrical conduit, etc.?

            So much depends on the number and type of windows, doors, wall penetrations, electric boxes, siding chosen, and the type and R-value of the insulation, it is extremely difficult to give an exact number without seeing the plans and specifications. If CBS were to provide a skeleton with double inline shear wall made from magnesium oxide board with 10 windows, 2 doors and insulation - the exterior walls erected would be in the $5 to $11 per square foot range or $8,000 to $17,600 for a 1,600 square foot house.

 

What's the very earliest (soonest) I could get a house such as I've described above, delivered to Diamondhead Mississippi?

            CBS will be taking orders for delivery in January 2007. Those interested in getting their home, building or project in the production sequence can reserve a slot by filling out the attached information (Click here) showing the number of buildings and the total square feet in the months they need them from January 2010 through January 2012. The slot will be held with a $1,000 check held in an interest bearing trust account in your name and applied to the final invoice.

 

How will CBS products be commercialized?

            CBS will promulgate its materials and market its products through licensed builders. As a condition of their license, builders have to hire a full-time person to promote our products. In return for which we will not supply their competitors in the same areas of responsibility for two years.

            In each area of responsibility there can be up to eight exclusive licensees. Licenses would be given for  single-family small homes, single-family medium homes, single-family large homes, multi-family two-level, multi-family three-level, commercial structures, etc. Builders having their own unique brand for a two-year head start will market the products to their customers, the homeowners. CBS will not have salesmen. CBS will direct the media campaigns. Our entire structure is set up to be a manufacturing efficient component supplier with few people and great impact.

 

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Panel Builders

 

Will the CBS parts fit in our existing panelization machines?

            Yes and No. No in that there will have to be special adjustments made to your automated panelization machine to use screws instead of nails, to locate studs on 2-foot centers, and to fabricate the rough openings a little differently.

            Yes, if you are building your walls on a simple table instead of a panel machine, there will be no differences except that you will have to set some screws in the top and bottom C-channels on both the top and bottom sides of the panel.

 

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Modular Builders

 

Can the fiberglass studs be economical in modular building?

            Yes. Modular buildings are just an assembly of panelized walls that have been erected and finished with electric wiring, ceiling, and painted gypsum walls inside a building. Our studs have pre-drilled holes to run wires horizontally which speed up wiring and the gypsum is attached with screws so there is no change in the materials, methods or tools for the finishers.

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SIP Panel Manufacturers

 

Can fiberglass studs be used in SIP panels?

            Yes. CBS parts can be used to replace all the lumber currently used in the SIP panel. In addition another structural system could be produced using CBS parts that would locate studs every 24 inches, screw on a top and bottom C-channel, and encapsulate the EPS with a 1/16 inch composite sheet forming an impervious water plane behind the exterior sheeting. The method of forming rough openings with the CBS system eliminates the need to plunge, rout and line the rough opening with wood. The assembly of the CBS modified panel would be faster and competitively priced with the glued panels. The erection would be more like wood 2x4 panels than like SIP erection. Each of the SIP panels would be joined with a male/female edge socket and screwed together creating a doubly strong joint.

 

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Developers

 

Will you be building panels locally?

            Plans for part production and distributed panelization across the state are underway. By locating part manufacturing in a large facility up to 12 house part kits can be transported to remotely located panelization plants, modular plants, SIP plants or stick building sites. This is the most efficient use of transportation costs.

 

Once you are in production, how long will it take you to rebuild a demolished housing project with 400 new homes?

            When we are fully ramped up in Louisiana, it would take approximately 2 weeks for us to erect the 400 house shells.

 

Are you certified?

            All of the components are calculated and tested according to the American Standards for Testing & Materials (ASTM). We are now optimizing the raw materials and die str5uctures, the best combinations will produce test panels for testing at the Miami Dade Hurricane Test Center and all the results sent for certification. Any change after those tests in materials would require us to resubmit for certification at a cost of approximately $70,000. By end of 2006 we will have all certifications in place. Before they are issued, we will use PE stamped drawings to certify each build.

 

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Potential Home Buyers

 

What is it like to live in a composite home?

            Insulation that is 367% more insulating than a wood wall (or 682% more insulating than an insulated concrete block wall) saves you a considerable amount of money every month on your utility bills. While this home does not reach the ideal of being heated with a match or cooled with an ice cube, it does have the best thermal efficiency commercially available.

            The walls are impervious to water so the insulation can never wet out and loose efficiency as can fiberglass or a sprayed-in foam insulation. The walls are tight so air leaks do not remove the heated or cooled air. No water can penetrate in to start mildew or black mold growth.

            There is more inside space (1.5 square feet is added for every 3 feet of perimeter wall) when our composite 2x4 wall replaces an 8-inch concrete block wall that is 10-inches thick (including insulation & finish materials). One square foot  of interior space is added for every 3 feet of perimeter wall when our 6-inch wall replaces the 10-inch of concrete block wall. In one recent 4,000 square foot home the interior space was increased 154 square feet when the concrete block wall was replaced with a 6-inch wall.

 

What would the home look like?

            You will not be able to see any difference from the inside or outside. The home will be more comfortable because of the insulation and be just as quiet inside as the concrete block home it replaces. Because of the sound attenuation of the CBS panel, the home will be much more quiet inside than a 2x4 wood house.

 

Can I add on to the house?

            Yes. The parts can be joined to any type of building material. In fact, you can always disassemble the parts with a screwdriver and reassemble them or add on to them at any time. Common patching methods must be used, of course, after the repairs or additions. Using this technique, it is possible to design interior walls that can be moved or rearranged over the life of the home to create different interior spaces as the needs of the family change over time. Rooms can be added or combined by simply rearranging the interior walls.

 

How easy is it to repair?

            The exterior and interior materials are attached the same way they have always been and so will be able to be repaired the same way the repairs have always been made. The only difference is that screws are used instead of nails.

 

How quiet is it inside?

            Almost identical to the very quiet concrete homes and much quieter than wood homes.

 

How can this be so superior and lower price?

            Because these walls are made in a factory at high production rates using less labor and wasting less material than all the other building systems. CBS skeletons, like the struts in an airplane, are lightweight. A CBS wall replacing a wood wall uses only 10% of the weight of wood that would be used to make an identical home saving 1-1/2 acres of trees. A CBS wall replacing a concrete block wall uses only 3.2% of the weight of materials used in a concrete block home.

            Finally, each part is made to the exact length and cut without any scrap in the factory or on the job site. This saves all the disposal trucking and dumping fees. In a wood home, for example, 35% of the total wood purchased is scrap and has to be disposed. In other words, for every 3 homes built in wood, the equivalent of one home in wood is thrown away.

 

Can I get insurance on this house?

            Yes. We are working with insurance underwriters and expect that up to 40% lower rates will be assessed on our optimized construction composite system that is safer, stronger and longer lasting than any other building method.

 

What about resale value?

            We expect that it will be better than other homes on the same street because of the extremely low energy usage and improved safety during any type of disaster. With all of the benefits you have been reading about using composite structural skeletons, which house would you buy on the resale market; one with a wood skeleton or one with a fiberglass skeleton? Once the benefits are widely known the obvious choice is clear.

 

How can I get a house made with CBS materials?

            We sell our structure through builders who finish the exterior architecture and inside walls and amenities to your specifications. You will have to use one of them or bring to us the completed and approved plans for quotation. You will have to also supply us with an adequate foundation on which to secure our walls. You will have to get all the permits and approvals from your local building authority. You will have to completely finish your home. Payment is the easy part.

 

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Economic Development Officials

 

How much land do you need?

            We need 20 acres for the parts plant with option for 50 more to build out the high production line and the surrounding companies in the Construction Technology Center.

 

How long will it take you to build the plant?

            12 weeks to build the buildings if there are none available of the correct size, and 26 weeks to get all the machinery and dies delivered. If there is no infrastructure in place, then these time lines start from when the infrastructure is complete.

 

How many people will you employ?

            182 in the factory and 230 in independent erection crews will be able to deliver and erect 30 houses each day. Supporting the manufacturing complex will require approximately another 300 in independent companies. The economic impact in the area should be about 700 jobs.

 

What will be the average factory salary?

            $27,000 per year.

 

What will it take for you to open your plant in our Parish?

            That depends on the final package of incentives we are able to put together with your location. We are not just competing with other manufacturing methods; we are also competing with the imports. It is therefore, vitally important that we are able to combine all the incentives available so that we can operate at the lowest overall cost.

 

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Government Officials

 

What kind of site do you need?

            It is best to combine several zones: Enterprise, Duty Free, Brownfield, Section 8, Empowerment and governor's closing fund for the maximum number of assistance programs. We must also have rail and easy access to a major port.

 

Can you build obtainable affordable workforce housing?

            Yes. A primary ability of highly automated production is to make better quality available at lower cost through economies of scale and vertical integration. We also work with several faith based groups and mortgage programs that assist in getting people into the homes with structures that make acquisition and cost of ownership affordable for their income.

            Do not forget about the jobs and income provided by our Construction Technology Centers and the effect they will have in training employable skills and providing stable wages for those needing workforce housing.

 

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Financiers

 

Have you discussed going public with underwriters?

            Yes. We have also introduced our products to bond issuers in advance of our proposals under the various incentive programs for housing and development. We also have considered an IPO prior to full production much like the dot coms do as well as going public after we have several years of production. The first plan sells the sizzle, the second plan sells the steak.

 

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Lumber Producers

 

How much scrap do you generate in your process?

            Less than 0.2%. The stamped holes for electric wires are used as washers for the anchor bolts, and the saw cut residue is recycled back into the resin mixture.

 

You're telling me that all the parts are identical, the same strength, and you can vary the ultimate strength by design?

            Yes, isn't that great! Don't you wish you could also do it?

 

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Steel Suppliers

 

How much does this fiberglass rebar cost?
            Same as steel rebar.

 

Has it been tested?
            Yes. The ACMA (American Composite Manufacturer's Association) has conducted all of the tests to get fiberglass rebar certified and there are about 4 companies making it commercially now, but they have struggled to get the price as low as we can make it because of our volume use of raw materials.

 

Can it bend?
            No. Once it is cured it can not be bent. But there are special forms of the fiberglass rebar that can be bent prior to curing and cured in the bent state easily. Then the bent parts and straight parts are tied together in the standard way.

 

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Green Promoters

 

Are you using recycled raw materials?
            No. To get the superior strengths, just like the aerospace composites we must use virgin materials. 85% is glass fiber; the 15% balance is a resin mixture that comes from a natural gas feedstock. For a 2,000 square foot home, we use approximately 2,2100 pounds of glass and 390 pounds of resin, which is the same approximate weight as two tanks of gasoline, a petrochemical. Every second fill up in your gas tank could have been a house for someone somewhere.

 

Can it be recycled?
            85% of the profiles are fiberglass that can be melted and made into glass bottles. The resin is burned with low smoke and only CO and CO2 in the fume constituents and has none of the hazardous or poisonous gasses that come from other resins. For these reasons, we believe that we are not truly "green" but can certainly be called "green friendly".

 

How many natural resources are consumed in your fiberglass parts?
            A 2,000 square foot home with a 1-car garage built to hurricane standards requires 40 tons of concrete block, steel, and a lot of hand labor. The same size wood home weighs 13 tons and consumes 1-1/2 acres of trees with about 35% waste.

            A fiberglass skeleton, by comparison, weighs 1-ton, has superior longevity, and can be disassembled and reused. This is approximately 10% of the weight of a wood house and only about 3% of the weight of a concrete block house.

            The energy efficiency is unparalleled for the lowest long-term cost of home ownership. Locating windows between studs saves on the number of studs that we must use. Having interior walls fall on an exterior stud helps to keep the number of studs at a minimum.

 

Why do you think your products are so energy efficient?
            The exact cuts and squeeze of the panel during assembly create a very tight structure. Couple the tight skeleton with an EPS, foam, or 6-inches of fiberglass and an R-value of up to R-44 can be created. When using fiberglass, a tight skeleton prevents air passage and adds the dead air space to the insulation coefficient. And, with the water plane created between the 1/16 inch composite sheet and the exterior sheeting it solves the problem of water penetrating into the insulation by quickly draining away and water that has penetrated the exterior sheeting.

 

Do homes built with the CBS shell be green certified?
            The builder is responsible for combining all of the points possible to get his green building certificate and paying for the application and approval. CBS panels are just one component of the designer/builder responsibility. But in using our products, the building should be able to qualify for a number of points under the LEED system.

            The philosophy of the whole house built to a higher standard cannot be made by CBS because we are only making the support walls and roof. The materials that the builder chooses for finishing the home are up to the designer and while some qualify for LEED points, others do not. And the skill level and ability of workers on site is always questionable as to whether or not the approved products have been installed in the correct way.

            CBS does support and is an active member of the PATH and LEED partnership but can only control and certify what it produces in its own factories. Because CBS raw materials, plant operation, finished products and correct installation are aligned with the concepts and requirements of these programs, the use of CBS products will help the builder accumulate LEED points.

 

Do you think that this is an environmentally responsible solution to building?
            We think it is very environmentally responsible because we are not using 40 tons of mined materials to make the shell or causing 1-1/2 acres of oxygen producing trees to be cut down to build one house. We are melting one ton of sand to make the fiberglass and using a very small amount of resin to produce a completely protected home. The end products have the least embodied energy and longest life cycle of any building system. The energy efficiency is unsurpassed and the parts can be disassembled and reused without having to destroy them. Yes, this is the most environmentally responsible system available.

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Plan

 

What should be our Business?
            We have looked at the homebuilding industry and find a stoic group of builders doing what they know how to do without wanting to change.  In wood, 44% of the homes are stick built on site, 41% are built with wood panels even though panelizing saves 71.5% of the labor costs.  Seven percent of homes are assembled from factory built wood modules, and 8% are mobile homes made of wood.   In the total home market wood is used for 85% of all homes built and concrete block is used for 14%. 

All the builders compete by trying to create their own “brand” of house, but, in reality, all have the same material, methods, and labor costs. The only major trend has been panelization which has grown at about 2% per year.  But the wood panel builders’ profits are held down because they have to buy the wood at the same prices that large builders would pay and their only profit comes from converting lumber into panels in a factory with less scrap using less labor.

Our business targets the concrete block market using panels of a superior material available for the first time at a lower cost created through economy of scale and integrated manufacturing.  Licensed builders will, for the first time, have a true unique “brand” with superior features and benefits. 

Our profits are considerable because we do not depend on the same raw material streams and because we manufacture all parts of the panel including the resins and insulation.

 

What type of work environment will ensure success?
            We are developing  a work environment in which associate/employees have the desire to do more, experience new things, expand their abilities, and develop a fast-track  career that enables them to grow right  here, in our business, that is a fast-paced, business-casual, high-productivity, work environment.

            Our work environment brings sustainability to the surrounding communities and provides a workplace in which a day care center, a medical clinic, an exercise facility, and dining facility are the norm rather than the exception.  Our Human Resources mission is to become the “Employer of Choice” in South Florida.  The first Business Technology Campus (BTC) will be a model for each subsequent BTC.

            We have already assembled a world-class core leadership team to ensure that this kind of work environment, which is critical to the overall success of this enterprise, is implemented. 

What are the differences between our products & the competition?
            Wood is a food source to termites, decays under moist conditions, and burns.  Block is porous, wicks water throughout its structure, takes up a lot of space, and is an extremely poor insulator.  Neither wood nor block is flexible and fractures instead of bending and recovering.  They are more like glass than they are like leather in structure.  Advanced Construction Composites are flexible and recover 98% after they are bent under extreme forces.  Fiberglass composite fishing rods and bows and arrows are extreme examples of our types of products.

In what areas are these differences significant?
            Areas prone to tornadoes, hurricanes, and earthquakes are the primary locations where composite housing has a superior advantage.  Areas of termite infestation are second candidates for composite housing.  And areas of black mold and rainstorms are the third locations where composite housing would have a natural advantage.

How will buyers get a composite home?
            They can use any home plan of their choice and order through one of the licensed builders.  We will build the exterior walls, deliver, and erect the frame and roof within 2 weeks for the builder to finish.  For the first time builders can offer the homebuyers a choice of building methods, materials, and amounts of insulation.

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Domestic Market

How much business is there?
            About 1,800,000 homes are built each year in the United State each year.  Over fifty percent (50%) are built in the 10 Southern states.  Approximately 252,000 are built from concrete block. 

What territories have critical needs?
            Hurricane, termite, earthquake, tornado, black mold zones have the most critical needs.  In the Americas, these areas are Florida and the SE, S, and SW coasts of the United States. 

What is the value of the critical needs markets?
            An estimated 252,000 concrete block homes in the critical needs area at an average support wall cost of only $7,500 creates a total target market value of approximately
$ 1,890,000,000. 

What is being done now?
            The critical needs areas of the United States use concrete block.  In the California seismic areas wood and special seismic construction techniques are used.  Concrete block construction is a slow process.  Wood, cement, and steel raw material price cycles erode builder profits if they take too long to deliver their houses.  In Florida the 6 to 9 month build times have completely eliminated builders’ profits during the shortages caused by Afghanistan, Iraq, and China’s needs. 

Where should we locate to meet those needs?
            Business Technology Campuses (BTCs) in Florida, Texas, Arizona, and North Carolina will supply the primary needs in the United States.  As each zone matures, additional panelization plants or entire BTCs will be built to satisfy the demand.

What is required to sell in domestic markets?
            Low price, fast delivery, quality products, accurate structures, customer convenience, and rapid production can all be accomplished with a manufacturing group of factories set up to create an economy of scale in cooperative assembly and supply.

What are our plans to penetrate domestic markets?
            Concentrate on large developers and community housing tracts.

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International Market

How much business is there?
            The United Nations estimates new home starts in the Americas outside the United States at 1,000,000 homes each year.

What territories have critical needs?
            Hurricane, termite, earthquake, tornado, black mold zones have the most critical needs.  In the Americas, these areas are the Caribbean Basin, Mexico, Central America, and the North and Central parts of South America. 

What is the value of the critical needs markets?
            Approximately 200,000 homes annually with an average support wall value of $3,000 creates a total market value of $600 million US dollars per year.

What is being done now?
            Concrete block, clay block, and wood are being used in the Central American, Caribbean, Mexican and South American markets.  These materials use hand labor for their construction.  Tip up concrete panels and concrete poured in place systems are also being used as a first step to automate the building process.  In spite of all these building methods combined, there is a housing deficit that grows each year in these territories.  

Where should we locate to meet those needs?
            As the products gain acceptance, full manufacturing plants and Business Technology Campuses will be set up in Mexico and Brazil.

What is required to sell in international markets?
            Low price, high production, rapid panel deployment, and financing assistance are key elements for penetrating these markets.

What are our plans to penetrate international markets?
            Critical needs zones in the Americas are developed by export from the United States first through kits and then by establishing panelization plants to fabricate panels from bulk parts exported by the American BTCs.  As the products penetrate these zones and establish a substantial base, only then will BTCs be set up.    

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Products

What kind of manufacturing should we do?
            The primary Advanced Construction Composite parts should be made from pultrusions because of the relatively low cost of their manufacture and the continuous production process.  Pultrusion is a process where the fiberglass is pulled through the die rather than being pushed through the die.  When materials are pushed through a die, they are called Extrusions.

What are the raw materials?
            Fiberglass, polyester resin, fillers, and mixture additives

Are the raw materials available in sufficient quantity?
            Yes according to our most recent inquiries there is sufficient supply to produce all of the 240,000 new home starts each year in the concrete block building zones.  And, because none of the raw materials are currently in the construction raw material supply chain, their prices are more stable and not subject to the raw material pricing cycles seen in the construction industry.

Are we pricing competitive?
            We have a 10~15% lower price and ability to decrease the prices another 20% over 5 years compared to concrete block, approximately a 7% lower cost than steel residential support framing, and an identical cost to wood framing.

What is it that you do exactly?

            We do not build homes. We only build the structural support shells of homes. Builders build the homes. Our business is to take approved plans from the designer, build and erect the home envelope that protects lives and possessions. This is the structural shell of the house. The builder makes sure that we have the correct and up to date building plans for fabrication. All of the housing permits and codes must be satisfied by the builder, developer or architect. We are a service to builders and developers that only builds to pre-approved prints.

 

Will builders accept this product?

            We have replies from many builders. Some have worked with the products, some have not. All are in agreement that first it must be cheaper than the existing materials. Then they are concerned about retraining their trades to use it. And they ask about how much money they can make. By using less amount of an expensive material, CBS makes the higher technology available for mass use. By installing the protective envelope, CBS insures that none of the trades following needs to be retrained. They use their same tools, materials and methods. Nothing changes for them. By providing a short and accurate delivery time, CBS enables the builders to finish more homes each year with their same crews and avoid the problems they have with having to reschedule all the crews because the house is not enclosed on time.

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Niche

How much does our approach save?
            20~25% lower cost than concrete block

Where is anything similar being done now?
            About half of all the wood homes in the United States are made from panels.  However, wood panelizers buy wood at the same price as the major developers and have no ability to generate profits except through savings over the stick wood framing labor costs. 

Who is the current competition?
            Our competition is the concrete block contractors and the concrete block makers.

Who could be potential competitors?
            Cement suppliers could react to their loss of business.  Lumber companies might try to discredit our products if they feel that their business could be lost to pultrusion panels.

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Potential Problems

What are the obstacles to doing this business?
            Slower than projected roll out of our business plan due to lack of full funding 

What engineering is necessary?
            The products are competitive now.  Alterations to the mixtures, shapes, and methods of attachment would only improve profitability and competitiveness.

What certifications are necessary?
            The SBCCI codes have to be re-certified to the 3/2003 Florida building code and International Building Code (IBC) standards.  Certifying to IBC building codes expands the area of product acceptance and use.

What is required to sell in export markets?
            While each country has their own requirements, the Miami-Dade test data and Florida certifications generally suffice for the critical needs zones throughout the Americas.

What are our plans to penetrate foreign markets?
            We intend to aggressively export and establish at least 50% of our manufacturing into the Americas.

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Related Opportunities

Are there other products we can make with the same machinery?
            There are a significant number of construction related products that can be produced at the BTC and sold to the same customers.

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Next Steps

How can we get more information about this opportunity?
            You have read these questions and answers about our business.  There are three documents detailing our business.  The first is a 6 page Executive Summary, the second is a 15 page Business Plan Summary Essence and the third is a 156 page Business Plan.   In addition, we have a private placement offering currently in effect.  If you qualify as an accredited investor, please request the Investor Package from our office. 

            If you are interested in obtaining a copy of either our Business Essence or Business Plan, it will require that you to sign either a 1-page Non-disclosure Agreement for the Business Essence or a 4-page Proprietary Information Confidentially Agreement for the Business Plan.  Either one or both are available by contacting us at the address shown on the front of this Executive Summary.

            If you would like to come to understand how we determined this to be the best approach to enter this industry, our PowerPoint Presentation for Investors explains the rationale, research, and alternative strategies considered before we created the details written in our Business Plan.  We would welcome the opportunity to meet and present this to you.

            If you have come to understand the value proposition of our approach, the step-by-step method we intend to use to achieve these goals, and agree with us about the market and timing, and would like to participate in our business; then please also request an investor’s package. 

            Each Business Technology Campus is registered in Delaware as a Limited Liability Company and shares (called units in an LLC) are available to sophisticated investors that meet certain criteria and understand that non SEC registered security investment offerings may entail considerable risks as described more fully, according to the law, in the Investor Package.  The CBS coordinating company is a Delaware Corporation whose shares are owned by the founders as well as the various BTCs manufacturing LLCs.

            We have divided the units into 3 categories and made available a limited number of these units to early investors.    

            Thank you for taking the time to read our business proposition and its potential.  We welcome you as an investor, participant, or supporter in helping us in our efforts to make composite materials become:


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The Framing Material of Choice – Worldwide

INFORMATION PROVIDED IN THIS DOCUMENT IS PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR FREEDOM FROM INFRINGEMENT.

 

James P. Antonic – President & C.E.O.
Composite Building Structures, Ltd.
1500 Colonial Blvd., Suite 102
Fort Myers FL 33907
941 870 4413 phone

 www.CBS-Homes.com

 This is a business plan projection. It does not imply an offering of securities. This business plan contains projections and scenarios that we believe to be correct.  There is no guarantee, however, that the projections will actually occur as shown and as written by James P. Antonic.

Composite Building Structures, Ltd. © 2004 all rights reserved                

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