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August 8, 2016

Why is The Tensile Architectural Industry Struggling?

I know the following questions may sound obvious but Why do we not see Tensile Fabric Structural Design being used more widely within the construction industry? Why are tensile projects always being undervalued? And why do we keep hearing of Tensile Membrane companies collapsing, going to the wall; with some only to be re-born weeks later with smaller less labour intensive overheads? Why is the Tensile Architectural Industry struggling?

The disciplines of Tensile Membrane Structural design offer incredible benefits to the architectural industry; it also offers solutions which no other design and construction discipline can. Tensile fabric structural engineering allows for unparalleled design freedom and amazing architectural solutions, so why is the Tensile Architectural Industry struggling? Why can’t it seam to break through that glass ceiling of architecture and become a standardised “common place element” within the construction industry?

For many the answers are well known and understood; however, we hope within this following blog post to provide a snap shot into the industry of tensile fabric architecture, the business side of the market and why we believe the tensile architectural industry is actually causing its own problems.

Tensile Structural Market

First of all we are going to take a look at the tensile industry from a business side of the coin and not the architectural design and engineering aspect. Later we’ll delve deeper and unveil the inevitable negative side effects which the tensile industries current business approach is having on the industry as a whole.

Dominating Tensile Companies

As we all know the tensile industry is dominated by The Big Three, possibly four tensile membrane companies whom appear to be involved with every potentially large scale tensile structural project across the globe. These three or four main tensile contractors appear to dominate the market and in return, are the ones whom the architectural industries believe ‘best’ represents the tensile industry, its engineering, design and operational capabilities. Each of these well-known tensile companies coverts a highly respectable turnover which they use as a marketing tool to represent and reinforce their dominance within the market place.  This is nothing new and there’s nothing wrong with such an approach being taken as this approach is taken by most dominant companies regardless of industry sector. However, the tensile industry is rather unique and it’s never always that simple, or, what it seems.

Parentage Companies

For obvious reasons we’re not going to delve into individual tensile organisations; however, when you look at each of the dominant tensile membrane companies they appear to have a much larger parent company backing them; parent companies that are not from the tensile industry and parent companies whom are already highly profitable in their own field, allowing them to assist financially with their Tensile offshoot in a TAX efficient way. This enables the parent companies to provide exceptional financial backing and bail out finances to their smaller divisional tensile operational companies. As such giving their tensile structural companies receives added security and access to funds. As we all know, cash flow within the tensile industry is one of the biggest killers of any small to medium sized tensile operator; this therefore ‘”unjustifiably” provides the dominating tensile companies with the appearance of stability. If you know how to read and fully understand accounts, you are quickly able to see where and how the parent companies get involved within the operations.  The problem with this is they are not truly financially independent and are ultimately controlled by the parent company that pulls the purse and often the operational strings. This is true for most companies whom have a larger parent company and where the occasional helping financial hand is required.

Side effects of Dominant Tensile Companies

As already alluded to the tensile industry is dominated by a select few whom the architectural industry believe ‘best’ represents the tensile industry, its engineering, design and operational capabilities. But is the dominant companies approach to business damaging the industries future and what are the Side Effects of Dominant Tensile Companies?

Artificially Lowering Costs – Feed the Best

As soon as a tensile company gets to a certain size, typically €5 -8million Euros in turnover, its overheads and running costs become problematic. This is because in order to get to this size they have had to invest heavily, meaning they need to keep bringing in additional projects to pay for the increased costs of employing ‘Highly Skilled Professional Personnel’, incurring larger office and factory rent, increased leasing costs , marketing etc.– Simple Business 101! However, the tensile industry is already a highly competitive market place. Additionally, due to the fact that tensile architecture is not a standardised “architectural specified” product, sizable tensile projects are not common place, meaning there is barely enough projects to go around.  The result is an extremely competitive and over balanced market sector.  If you then bring in the factor of the dominant tensile suppliers whom have parent companies to answer to and already exorbitant overheads inherited from previous projects, the industry starts to become overly competitive, with costs tumbling! The simple fact is that the dominant tensile companies have to keep feeding the beast behind them, providing an unsustainable pricing structure and ‘Artificially Lowering Cost’ as a result. Now you don’t need to be a rocket scientist to realise this is a damaging the development for the industry. We all know that certain tensile companies are blatantly entering into bidding wars for their very existence when it comes to tenders, with QS’s (Quantity Surveyors) salivating on the side lines ready to pounce on the blood soaked victor.  However, it is not just the warring tensile companies whom end up being damaged by such an unhealthy business approach, but the rest of the industry as a whole. As a result the tensile industry is being pressured by main contractors and to an extent architects to keep delivery tensile projects on a shoestring budget. Forcing tensile companies to make compromises in design and engineering’s.

Lack of Development within the Tensile Industry

We touched on the fact above that Tensile Structures and Tensile Architecture is not a simple specified product which architects can reference from a book. Tensile architecture is also not covered during most architectural studies; meaning it is not an easy option for a leading architect to choose. Tensile Membrane Structural design offers incredible versatility and benefits to the architectural industry, providing more design freedom than any other form or discipline of construction. Although, due to the current bidding wars which are artificially lowering costs, Tensile Architecture is being seen by the architectural industry as a cheap alternative rather than what it is “A DESIGN SOLUTION”. The resulting factor is that architects are not “cheesy phrase alert!” thinking outside the box on how tensile membrane design can be used other than that of the standardised approach which has been taken for decades.

With the foreseen impression of “Cheap Alternative” being wrongly enforced by the industry and the dominating tensile companies cutting costs to the bone in order to keep afloat and feed the beast behind them, product and design development investment has come to a shuddering and grinding halt! The result being, an industry which is currently stuck in the past selling and promoting design solutions from a bye gone era.

Making Ends Meet!

Tensile architecture utilises some of the most advanced, design, engineering, manufacturing and installation disciplines within the construction industry. Its designers and engineers are arguably the most highly skilled industry individuals around. The cost for providing the services required to successfully run and operate a tensile company are at the upper end of the pay scale; so when a Tensile Membrane company is asked to tender for a project they automatically try to ascertain a project budget from the main contractor. The problem is the main contractor inevitably has already been given an extremely low cost impression. Therefore the bidding companies are already up against it as they to try and tender based upon a low cost auction! So where can you cut costs?

The main costs incurred for most large scale tensile projects are as follows and in this order:

  1. Fabrication (Steel and membrane)
  2. Installation
  3. Design and Engineering

Installation is an extremely labour intensive element with tensile installation personnel getting paid highly for their specialisation. As such, with installation being the second largest cost centre, all tensile companies will look to try and reduce costs by outsourcing this to either a lower skilled workforce regionally or by bringing in staffing from the ex-communist Baltic state regions where labour prices are significantly lower. Next tensile companies will look at fabrication costs to try and find ways of reducing this cost, this however it almost impossible which is why it is not immediately looked at. Shocking but true, to get round this we have heard of instances where second hand or cheaper alternative membranes other than those specified have been used and illegally imported steel with fake certification has been installed in an attempt to keep costs down to minimum. And last but not least designers and engineers are being asked to reduce costs, which inevitably means removing design elements which automatically improve the tensile structures operation, making it easier to maintain, providing better operational lifespan and engineering’s which would enhance the structural design suitability.

Tensile companies whom want to provide the best solutions, whom want to deliver a truly inspirational tensile structure and go that extra mile are often dropped from the tender process, not because they would not provide the best solution, but because the winning contractor is willing to do just enough and no more in an attempt to keep costs as low as possible.  There are only so many ways costs can be reduced; unfortunately it’s the end client whom ends up paying the price in the long run, along with the industry whom gets tarred with the inevitable compromises which have been made.

If you search the internet you will find many instances where sections of tensile stadium roofs have collapsed due to ponding, ETFE roofs have failed due to hail stones and storm damage, all as a result of cost being cut somewhere within the process in an attempt to deliver within an unrealistic budget. I know costs need to be caped to prevent them running wild with overspends here and there, but budgets also need to be realistic which they are not always within the tensile design and engineering arena.

Tensile Industry Summation

The Tensile Industry has historically gone through its ups and downs with analysis providing a typical 4-yearly cycle being the optimum performance spike, as the tensile membrane industry goes in and out of fashion. However, with the market currently being over competitive and many companies collapsing, shedding staff, only to enter the market again by focussing on smaller projects the tensile industry is extremely volatile. Never before have there been so many companies focused on this sector as a specialisation, each trying desperately to make ends meet. The resulting factor is a significant element of development stagnation and an industry business approach which has to be said is in conflict with its own best interests. As an industry Tensile Architecture needs to look at ways of enhancing its viability away from simple perceived cost reduction alternatives to design development, design solutions and structural enhancement. Only by doing this will the Tensile industry be able to stand on its own two feet and receive the appropriate recognition. The dominant approach to business taken by the financially backed larger players will always be in play, you cannot get rid of this. However, by a tensile company focusing on its own ingenuity and by offering a uniqueness to the market, such as our Interactive Media Façades,  their is room for all of us.