Richard China is the president and CEO of International Green Structures (IGS). Prior to starting International Green Structures, China spent most of his contracting career as president of Primo Electric, a family-owned electrical contracting firm serving the Mid-Atlantic region for over 40 years. In 2007, he founded IGS, a sustainable emergency response housing solution, which was approved and awarded a contract by the federal government as a next generation disaster housing solution.
In an exclusive interview, value investor Tim Melvin spoke with China to gain a greater insight into the private sector firm that offers innovative structures and services that seek to provide the solution to the global housing crisis.
TM: International Green Structures is a very interesting company. Tell us a little bit about your company and the opportunity you see unfolding in the African region for you guys.
RC: Originally, the company was formed under a prototypic company back in 2006 to compete for an alternative form of disaster housing for Phima in the United States -- you know, to replace travel trailers and those sort of things. After a very exhaustive two and a half years study, we were one of a handful of companies that were selected for that contract, a five-year contract, with U.S. government to provide the alternative form of disaster housing. Of the companies awarded the contract, we were the only one that actually had a pre-engineered kit that was pre-positioned in high impact areas that could quickly be deployed and erected and could migrate for more of a temporary structure into a longer term living solution
I decided to convert some of my debt equity and take control and interest, then step into the CEO role of the business and at that time I decided to rebrand the business to International Green Structures or IGS and introduced the technology to the emerging markets.
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The technology itself is called compressed agriculture fiber. It's been around since the 1940s and was originally patented in Sweden and developed in the UK and was utilized in housing after World War II, where a significant amount of housing was rebuilt in Europe using this technology. What IGS did during the process of dealing with Phima was to develop a pre-engineered steel framing kit that will take this compressed agriculture fiber technology or CAFT and quickly interlock it into an affordable living structure or any type of structure quite frankly.
The key to our model is that we truly are a sustainable product because what we do is we take the biomass residue from wheat or rice after the farmer has harvested his crop, which is the actual straw. What IGS does is we focus on introducing an economic model to this emerging market that provides an affordable housing solution for builders and contractors and government agencies to utilize.
TM: Okay. How big is the need for affordable safe housing throughout the African region? I imagine it's kind of pretty big.
RC: It's huge, not only in Africa but the entire world, quite frankly. Urbanization is very good thing if planned properly, but what's happening in most of these countries is it's not been correctly planned and it's creating urban slums; currently around the world today there's a need for affordable, low-cost, affordable modern type state housing for about 827 million people.
That need will grow to over a billion by 2020 and African requirements are probably about 400 million of that. It's an expansive market and the main reason we decided to take the technology to Africa is because in the U.S. we have every alternative building technology there is that you have to compete against and you don't have the same type of demand over there. The only thing you're competing against is the traditional and conventional construction utilizing block and cement, which is very costly and is very slow.
Our biggest challenge is the cultural adaptation and showing the different people in these countries that this is a technology that will give them a safe, secure house but it's not your traditional construction process that they're used to.
Check back soon for the second part of this three-part series, where Richard China discusses the housing development opportunities in Africa.
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