- Blog post

## Understanding the factors that influence profitability

As a future-focused company, you’ve heard about 3D concrete printing technology. Perhaps you’ve wondered if it is a viable approach for your own organization. What does it entail? What are the costs? And when can my company see a return on our investment?

These are the right questions to be asking. By first creating a 3D printing construction strategy and business case, you can create a cost calculation for your own company and determine your company’s potential profit. CyBe offers the tools to get started with experts available to help clarify the process. In this blog, we’ll dive into the specific factors that influence profitability.

## Creating a general cost calculation

Whether building with 3D concrete printing technology or traditional methods, a cost calculation always begins with a scope statement. A scope statement describes the project deliverables and major objectives. Some countries may provide standardized lists of construction activities with subsequent cost descriptions. In the Netherlands, this is the STABU.

Direct costs are calculated by combining the cost of materials, labor, equipment, and subcontracting services. This requires making a detailed spreadsheet that breaks down all of the project’s activities and components and adds up all of their associated costs.

To calculate the total building costs, the direct building costs are added to the four indirect building costs, which are represented by percentages of the total direct building costs. The graphics below illustrate how this calculation is made.

**Direct building costs:**

**Total building costs:**

*D = direct building costs
D + (0.15*D) + (0.06b*D) + (0.03*D) + (0.0035*D) = Total building costs*

## Direct costs of 3D printing compared to traditional construction

Some construction components and steps are the same between traditional construction and 3D concrete printing and so the costs in each scenario will be the same. These steps and elements include things like measuring the groundwork, building the foundation, and installing door frames and fixtures.

Other components and steps of traditional construction are unnecessary with 3D printing and so the costs are eliminated from the calculation. These include building the formwork and external walls, plastering, utilities installation preparation, and subcontracting for these steps.

And other components and steps are simply different when building with 3D concrete printing, and those costs are substituted in the calculation. These include the cost of the printing materials and consumables, and the labor required to print the construction. 3D concrete printing saves material and labor costs, and we demonstrate how to calculate both for your specific project.

## Calculating material and labor costs for 3D printed concrete construction

To create a cost calculation for a 3D printed wall, we first determine how much concrete material is needed in weight. To do this, we follow this calculation for all wall elements:

*(length) x (height) x (layer width) x (number of layers) x (infill factor) x (mortar density)*

The wall’s length and height will vary per design. The number of layers will vary depending on local building requirements for insulation and structural strength.

The rest of the figures are standard:

- Layer width — 40mm
- Infill factor varies with the wall thickness
- 200 mm thick wall — equal to approximately 10% of wall
- 500 mm thick wall — equal to approximately 20% of wall

- Mortar density — 2200 kg/m3

**Calculating material weight and quantity**

A 2-layer wall with dimensions of 3 m x 2 m would be calculated as follows:

*(3 m) x (2 m) x (0.04 m) x (2) x (110%) x 2200 kg/m3*

The weight of this wall would be 1,161.6 kilograms.

One pallet of mortar holds 48 25-kg bags, or 1200 kg of mortar. Our 2-layer wall with dimensions of 3 m x 2 m would require slightly less than one pallet of material (47 25-kg bags of mortar).

**Calculating material cost**

One 1200-kg pallet of mortar costs €475 in the Netherlands. Our wall of 1,161.6 kg would require 47 bags of mortar, or 98% of a pallet.

*0.98 x €475 = €465.50*

The material cost of our wall would be €465.50.

**Calculating labor time**

One pallet of material is printed in approximately 45 minutes. To this, we add the start and stop time of the printing process, which varies depending on the experience of the print operator.

- Experienced operator — 10 minutes
- Novice operator — 30 minutes

An experienced operator would print our 2-layer, 3 m x 2 m wall in about 55 minutes. Two operators are required to print one wall.

**Calculating labor cost**

The printing time for our wall can be multiplied with the local hourly wage to determine the labor cost. Using an example rate of €15 / hour:

*55 min x €15/hour
0.917 x 15 = €13.75*

Considering the need for two operators, it would cost €27.50 for two experienced operators working at €15 per hour to print this wall.

**Calculating total direct cost**

To calculate the direct cost of this printed wall, we add the material and labor costs together.

*€465.50 + €27.50 = €493.00*

The direct costs of material and labor to print our wall would be €493.00.

A project consisting of 15 such walls would cost €7,395.00 in material and labor.

The material cost can be lowered when choosing to print with CyBe’s PowerPack. By using this fast-setting additive with local mortar materials (30/70 mixture), the material and material transportation costs are reduced. This also results in lower CO2 emissions.

The labor cost may also be lower or higher, based on where the project is being built. This depends on the local labor rate of the country.

**Adding the cost of consumables**

To the direct cost, a factor is used to estimate the cost of consumables. Consumables cover the spare parts that will be needed during the 3D printing construction. There are different consumable materials, for example, a mixing iron. Each is consumed at different rates and a different factor is used for each specific consumable. The total cost of consumables is added to the project cost.

## Direct cost savings of 3D concrete printing

The material and labor costs connected to 3D printing are added to the other direct building costs — those that are common between 3D concrete printing and traditional building. As an example, the Robust Villa, a 104m2 home 3D printed in Curaçao had total direct building costs of €41,418.45. This was 2% less than traditional construction and saved €1130.81.

The 2% savings in total direct building costs is only part of the cost savings. The bulk of the savings comes from the indirect building costs.

## Indirect cost savings of 3D concrete printing

An optimal print strategy allows companies to print in continuous succession. A 3D printed home can be printed in five weeks — five times faster than traditional building.

This means that the general construction site costs are reduced from 25 weeks to five weeks and the 15% factor used to calculate total building costs is reduced to 3%.

**Total Building Costs**

**Indirect Costs**

If the Robust Villa home would be printed many times as part of a larger project, the general construction site costs per home would be reduced from 15% to 3%.

*15% x €41,418.45 = €6212.77
3% x €41,418.45 = €1242.55*

*€6212.77 – €1242.55 = €4970.22*

The general construction site cost savings per home would be €4970.22. Combined with the 2% direct savings cost (€1130.81), the total savings per home becomes €6101.03 for a total building cost savings of 14.73%.

*€4970.22 + €1130.81 = €6101.03
14.73% total building cost savings*

## Calculating profit from 3D concrete printing

In addition to saving total building costs, an efficient print strategy increases profit. The Robust Villa took five weeks to build and made a profit of €1514.67. Over 25 weeks, five of these homes can be built for a total profit of €7573.35. Therefore, 3D printing brings profit and positive cash flow faster than traditional construction.

## Calculating Return on Investment (ROI)

To calculate ROI, your business case is very important. The kind of projects that you plan to build will determine which 3D printer is best for you. The details of the projects will be balanced with other cost savings.

The Robust Villa was printed with the CyBe RC mobile printer, which sells for €195,000 Ex Works. If this house was part of a large project with an efficient strategy building continually with 5-week time loops, the return on the investment of the printer would come once the 130th house was built.

*€195,000 / €1514.67 = 128.7
Investment is met after building 129 homes
Profit is made on the 130th home*