Ecoworks founder Heisenberg
“Biggest construction crisis of the last 30 years”
In Germany, millions of buildings need to be renovated to make them more energy efficient. Emanuel Heisenberg, grandson of Nobel Prize winner in physics Werner Heisenberg, wants to revolutionize how this is done with his company. To do this, he is raising a lot of money from investors.
What exactly does your company do with the houses?
Emmanuel Heisenberg: We have very inefficient apartment buildings from the 1960s and 1970s that are in urgent need of renovation. And we are putting a second skin around these buildings with wooden facades in which everything is already integrated: windows, insulation, pipes. Then we can bring these buildings from a very poor condition to an A+ condition in just a few weeks.
If it is as simple as you describe, why hasn't it been done on a broader scale already?
The process requires a high level of technology and planning, which must first be developed in order for it to work on a large scale. So far it has worked like this: There are many craftsmen and women on the construction site. There is a lot of material. And then, in a fairly chaotic process over many months, windows, insulation and pipes are attached to the buildings. At some point the building will be reasonably airtight and energy efficient. Shifting all this work from the construction site to the factory means an immense amount of technology and planning effort.
So what is the advantage anyway?
If 80 to 90 percent of the value creation takes place in a factory, i.e. with robots and in a very structured way, then it becomes cheaper and of higher quality.
Overall, the construction industry is not doing well at the moment. Isn't this a bad time to expand with a company like yours?
Fortunately, renovation is not so badly affected. But it is true: we are currently experiencing the biggest construction and real estate crisis of the last 30 to 40 years. It is a perfect storm: 15 percent increase in material costs in the last two years. Lack of workers. Sharply rising construction interest rates and thus financing costs. It is an environment in which housing companies have reduced their investment budgets to almost zero. The good thing for us is that renovation is always very popular for new buildings in such a downturn. It is basically the less risky alternative to new construction.
But you are also affected by the high material costs. And at the moment your costs are still higher than traditional renovation. Shouldn't they actually be lower?
We have just tested this with a small housing association. After receiving the subsidy, we are cheaper than if the association awarded the contracts to individual tradesmen. The state subsidy is immense because a CO2-neutral renovation achieves many goals. But of course it is about getting the costs down. We have been investing billions in renovation for decades, but nothing actually changes and it is getting more and more expensive. So we need a technical approach to make renovation better and cheaper.
Why has so little happened so far?
There are structural reasons for this. Architects are happy when projects become expensive because they are paid based on volume. Building material dealers are happy too. So far, only housing companies have benefited when construction becomes cheaper. And they only invest 0.1 percent of their turnover in research and development. We have been in this dilemma for decades. But it would be absurd to continue to carry out renovations solely as a manual process on the construction site.
At the end of last year, you raised another 40 million euros in a financing round. What will happen with it?
Big players like the World Fund and Haniel have joined us, yes. Our goal is to achieve a billion in sales in Germany. The factories must be largely automated, the entire supply chain must function better. This industry must be organized more intelligently and with greater division of labor.
If you expand, you will come up against the same limitations as everyone else: cost pressure, personnel. Software engineers, construction experts. Where do you get them from?
We have a lot of applications. But it is clear that we also have to train the people ourselves. They have to come to the company with a high level of basic knowledge, but then also have to undergo further training for a year and a half. It is difficult to find someone with headhunters who can do this so quickly.
Listen in the new episode of “Zero Hour“
- What new technologies Ecoworks uses
- What Heisenberg thinks of Economics Minister Habeck
- How Germany could emerge from the construction crisis
You can find all episodes directly at RTL+, Apple or Spotify or via Google.
