1.1 IntroductionThischapter will introduce the study. It contains the background of the study,statement of the problem, objectives of the study, research questions,significance of the study and the limitations of the study.
1.2 Background of the StudyTheconstruction industry is a major sector in the Kenyan economy accounting for4.8% of the GDP (Kenya Investment Authority, 2015). It is a major employer fora large number of people. According to Kenya Investment Authority (2015), Kenyahas a well-developed building and construction sector with proper engineering,building and architectural designs being readily available. As a result, homeownership in Kenya is achieved either through own construction by citizensand/or mortgages by contractors/developers.
Accordingto the UN Habitat Report on Housing (2011), there is a low allocation ofresources in the housing sector largely due to lack of a growth encouragingenvironment. In addition, In Africa, the affordability of houses is greatly hinderedby the high cost of both the construction land and building material whichconstitutes about 80% of the cost (UN Habitat, 2011). Other myriad of factorsalso affects the affordability of housing such as out-of-date constructionmethods and codes, shunning of new technology due to a lack of understandingand technical/competence challenges (UN Habitat, 2011).
Currently, the cost ofhousing purchase and/or construction is relatively high and out of reach toordinary citizens. The major contributor to this is the technology used forconstruction (Aganto, 2013). Traditionallyand by practice, Kenyan constructors prefer the brick and mortar technology. Thisis slowly being overshadowed by Alternative Construction Methods (ACM) whichrange from prefabricated building, fiber cement and galvanized steelconstruction to ExpandedPolystyrene (EPS) panel (Construction Business Review, 2014). Each constructionmethod is unique and has a variety of factors influencing the overall cost ofthe construction project (Shnell, 2014). Kenya has been holding back on theadoption of ACM with a strong inclination of still using the traditional brickand mortar thus the low uptake. ACMrefers to the procedures and techniques utilized during constructiondistinguished from the traditional brick and mortar model (Shnell, 2014).Different forms of ACM exist in the market.
Globally; in the developing nationsspecifically China and America; the use of ACM has been greatly advocated forin construction of office blocks as well as a measure to influenceaffordability of housing due to the fact it cuts down cost of construction byover 30% (Construction Business Review, 2014). In the continent the use of ACMis focused more in the Northern region with Egypt and Morocco being at the forefront. In the Southern end; South Africa is the main country adopting ACM inconstruction (Construction Business Review, 2014). There was a surge in Kenya in2014 in the utilization of ACM due to their ability to reduce the overall costand time line by a significant margin and in turn tackle the house shortagesituation in Kenya that currently stands at a demand of 250 000 units against asupply of 40 000 units (National Housing Construction,2014). Furthermore, therehas been adoption of ACM in professional building codes to guide constructionusing ACM (Peter, 2015).ACMrepresents the next frontier in the construction sector due to itscomparatively cheaper cost in comparison to existing brick and mortar methods.The construction industry has been on an upward trend following greateremphasis on infrastructure by successful government administrations leading tointroduction of various new technological construction methods (KenyaInvestment Authority, 2015). Despite its affordability and cost saving aspect,a number of factors have inhibited its uptake in Kenya.
These factors highlightthe significance of an appropriate selection of construction methods for aproject since deficient methods for executing the work can cause significantlosses of efficiency and resources at project sites (Postcards, 2009).Theultimate goal of ACM is to provide affordable housing through various cost savingaspects that not only reduce the turnaround time in completing constructionthus saving cost of material and labor; but also reduces wastage of materialthus promoting the environment (Noppen, 2012). Despite creation of awareness ofACM by various quarters through advocacy of its benefits, adoption of ACM isstill not as anticipated. 1.2.
1 Koto Housing Limited Company Profile KotoHousing Ltd is a Kenyan based construction firm-operating under a franchiseagreement with Koto Corporation based in Malaysia- that offers affordable costeffective housing and construction services through the use of ExpandedPolystyrene Building System (EPS). Its core business is manufacturer of EPSpanels and building contractors. It offers a wide array of designs ranging fromvillas, bungalows, apartments and maisonnette. The EPS panels are constructedat the firm’s Mlolongo (Koto House along Mombasa road) based production company(Koto Housing Limited profile, 2017).Thekey projects that the company has focused on are on government services such asdispensaries, hostels and apartments with major projects including policehousing at Kamulu and Migori; ward construction at Bondo District Hospital andNanyuki Teaching and Referral Hospital; Kiriri Women University of Women andTechnology (Koto Housing Limited profile, 2017).Thecompany’s vision is to be the preferred provider of affordable housing and buildingsolutions in the region whereas the mission is to transform life by providing efficient,timely, affordable and innovative housing and building solutions throughstrategic partnerships with the core values being passion, simplicity, collaboration, excellence, innovationand integrity. The value proposition for its projects are speed, safety, lowercost, lower skill set and environmental friendly (Koto Housing Limited profile,2017).
KOTO Company is a member of the Kenya Association of Manufacturers aswell as Kenya Property Developers Association. Thecompany major business decision and growth strategies are strategized by theSenior Management Team that comprises of the Board of Directors, ExecutiveChair, Chief Executive Officer with implementation carried out by the variousHeads of the Units namely the Technical Director in charge of the technicalunit; while Head of Business and Corporate Support runs the sales front withthe Chief Accountant being in charge of the finances. For the purpose of thisstudy the sales team and the technical unit will be of most importance as theyare the key touch points in the driving the uptake of ACM in Kenya for theyhave valuable knowledge in determining the factors affecting uptake in ACM inKenya. Figure1.1 Koto Housing Ltd Organizational Structure Board of Directors and Executive Chair Chief executive Officer Head of Business and Corporate Support Chief Accountant Technical Director Administration Assistant Technical Sales Executive Accounts Assistant Project Managers Directors Head of Factory Site Supervisors Support Staff Production Supervisor Maintenance Supervisor Electrician Machine Operators Source: Koto Housing LimitedCompany (2017) 1.3 Statement of the ProblemTheoverall cost saving and time saving aspect/impact of ACM is a significant sellingpoint to potential stakeholders in comparison to conventional building methods.According to Snell (2009) ACM results in reduction of cost of construction byup to 30%.
Each construction method has its pros and cons as well as a myriadof factors that drive its uptake and/or its objection in use (Shnell, 2014).ACM has significant savings on the overall cost of the construction though itsuptake is still low. Despite the cost savings aspects documented; there isstill a hindrance in the uptake of the ACM technology in Kenya specifically (NationalHousing Construction, 2014). ACM has not been adopted by a significant numberof stakeholders in the construction industry.
The support of the constructionstakeholders which would go a long way to make its adoption attractive and curbthe major housing deficit we have in the country which as of 2016 was at 200000 units (Mwololo, 2016). Presently, over 95% of building materials in Kenyaare still dependent on brick and mortar technology as there is apprehension onthe part of property developers to adopt ACM technology (Construction BusinessReview, 2015).This research study will aim to establish the factorsaffecting the uptake of the ACM so as to give a pointer to areas that need tobe addressed to drive up its uptake. Focus will be on Koto Housing Ltd thatutilizes the prefabricated building technology using EPS. The results of thisstudy will be of great importance to players in the construction sector as itis a powerful tool to check the challenges they are likely to face in adoptionof new emerging technology.1.4 Objectives of the Study 1.
4.1. General ObjectiveToestablish factors that influence the uptake of ACM in the housing industry inKenya focusing on Koto Housing Ltd.1.4.2. Specific Objective1.
To determine influence of customer’s preference on the uptakeof ACM in Koto Housing Ltd. 2. To establish influence of technology access on the uptake of ACMin Koto Housing Ltd. 3.
To address the influence of pricing on the uptake of ACM inKoto Housing Ltd. 4. To investigate influence of competence on the uptake of ACMin Koto Housing Ltd.1.5. Research Questions1. How does customer preference influence the uptake of ACM inKoto Housing Ltd? 2. How does technology access influence the uptake of ACM inKoto Housing Ltd.
?3. How does the affordability influence the uptake of ACM inKoto Housing Ltd.? 4.
How does the user competence influence the uptake of ACM inKoto housing?1.6. Significance of the Study 1.6.1.
Koto Housing Ltd ManagementAsone of the advocates for use of ACM; the research will give Koto Housing LtdManagement team a holistic view on the strategies they can adapt to address thelow uptake of ACM specifically their EPS technology through availing detailedstudy on the factors influencing its uptake.1.6.2.
ACM Companies Thesecompanies are at the fore front of driving uptake of ACM. Thus of importance isa review of the factors is necessary as to establish their overall impact onthe customer decision whether to uptake or decline the ACM. Hence, informationgotten on EPS will be used as a representation of the other ACM technology andcan therefore be used to aid in marketing of these ACM. In future studies, theinformation can also be used to help in anticipating customer concerns on useof ACM and/or in the packaging of ACM in such a way it’s attractive to the endclient.1.
6.3. Aspiring Home Owners Futurehome owners will find the review of ACM as a good tool to assess the option attheir disposals based on their available resources.
Highlighting cost vsbenefits of ACM will aid in making an informed decision on whether to use ACMor the conventional brick and mortar technology that will ultimately determinethe overall cost of the housing project.1.6.4. Government Oneof the core deliverables of the government is provision of affordable housingas shelter is a basic human right. Construction generally is a costly affairdue to the various procedures, techniques and approvals used.
Conventionalbrick and mortar is slowly being phased out by ACM in western countries especiallyprefabricated technology which significantly reduces the time taken as welloverall cost of the construction. Greater awareness is needed to highlight theoverall benefits of these ACM so as to generate interest of the citizensspecifically through the NHC- the chief housing and construction governmentagency.1.6.5. Researchers and Scholars Thestudy will be helpful to other researches and academic institution to learn onACM in Kenya Furthermore it will give guidance to other students intending topursue research in the ACM field either as reference point and/or as properread as the final completed research paper will be availed.1.7.
Limitations of the Study1.7.1 Confidentiality Somerespondent may hesitate to give information pertaining to ACM based on thecompetitive nature of the industry with the assumption that the awareness strategyinformation collected may be handed over to the other companies also involvedin the ACM industry and offer competitive advantage. To ally this fears andmitigate this limitation the researcher will avail letter from the KenyaInstitute of Management detailing the academic purpose of the study.1.7.2 Uncooperative RespondentsSomeof the respondents may be uncooperative to avail themselves for interviews andparticipate in answering the study questionnaires because of lack of interestin the study proposed and the busy nature of their schedule. To tackled thislimitation; the researcher will organize a session to give an explanation onhow they could gain by participating in this research study.
In addition, theresearcher will strive to ensure good rapport with the respondents to easeopening up on their end in availing the required information.1.8.
Scope of the study Thestudy on the factors that influence the uptake of ACM in the housing industryin Kenya focusing on Koto Housing Ltd will be carried out at the company headoffice based at Mlolongo, Nairobi. Data will be gathered through interviews, questionnairesand secondary data research. 2 Project Managers, 5 Technical Team and 6 SalesPersonnel will be included as respondents as they possess the necessaryexpertise and information relevant to the objectives of the study. The studywill be conducted from December 2017 – February 2018.