Container-based construction company anticipates Houston growth

 Paul Galvin is the CEO and chairman of New York-based SG Blocks, which manufactures its structures in Houston.

Paul Galvin is the CEO and chairman of New York-based SG Blocks, which manufactures its structures in Houston.

by Jen Para

A New York-based designer and fabricator of container-based structures expects its Houston manufacturing arm will expand thanks to recent growth.

In the spring, SG Blocks Inc. (Nasdaq: SGBX) got its building material, recycled steel shipping containers, approved and entered into international building code, said Paul Galvin, CEO of SG Blocks. Then in the summer, the company had an initial public offering and became listed on Nasdaq.

As a result of these two milestones, the company has experienced an increase in projects, with more on the way in Houston, Austin and Dallas. This growth is expected to have a direct impact on the Bayou City because the company manufactures and fabricates the structures in Houston.

“At the end of June — June 30 — we had $9.7 million in backlog (projects),” said Mahesh Shetty, CFO of SG Blocks. “Fast-forward to Sept. 30 of this year, we had over $77 million in backlog. … It’s going to have a direct and beneficial (impact) on the employment (at) our manufacturing plant in Houston.”

Shetty couldn’t give an exact number for how many manufacturing jobs the projects could create. Currently, SG Blocks has over 10 employees, while Houston-based Teton Buildings LLC, with which SG Blocks works, has between 40 and 60 employees, a spokesperson said.

SG Blocks contracts Teton, a modular construction company, to build its structures made from shipping containers purchased from Tinley Park, Illinois-based ConnGlobal Industries Inc. Upon building the structures in modular 

pieces, SG Blocks then sends these nearly finished pieces to their final location to be put together. SG Blocks' entry-level projects begin at $30 per square foot for a one-story building, according to its website

One of these projects includes constructing a 23,715-square-foot, three-story community performing arts and enrichment center, according to a press release. Under the $5.1 million contract, SG Blocks is building the structure in Houston and then will ship it to Los Angeles, where it will be put together. Galvin said it will take 16 weeks to construct the structure in Houston and then another six weeks to put it together in Los Angeles. 

 A rendering of the 23,715 square-foot three-story community performing arts and enrichment Center that SG Blocks is constructing in Houston from recycled steel shipping containers.

A rendering of the 23,715 square-foot three-story community performing arts and enrichment Center that SG Blocks is constructing in Houston from recycled steel shipping containers.

SG Blocks structures reduce construction time up to 40 percent because the company constructs the building at the same time construction permits and the foundation are underway and can save an organization between 10 to 20 percent on construction costs, Shetty said. This is in addition to providing a safer environment for construction workers because they build the structures in a controlled environment as well as reduce the carbon footprint and natural resource consumption.

“This one company with their operating system cannot just disrupt, say small school buildings, they can disrupt the entire construction industry, assuming the economics make sense, etc.,” said Dallas Salazar, CEO of Austin-based Atlas Consulting and an investor of SG Blocks.

Meanwhile, repurposing surplus shipping containers has been a growing trend in recent years. A self-storage project that broke ground in Pearland over the summer uses the containers as a component in the building. GreenSpace Holdings, the Houston-based developer behind that project, also touts a reduction in construction time and cost as a benefit of using shipping containers. The trend also has been popping up in residential developments and other projects.