Mass Timber Group Show: Sustainable Building Experts

The Rise of Hybrid Mass Timber Systems w/ Mercer Mass Timber's Nick Milestone & Ricardo Brites

• Brady & Nic • Season 1 • Episode 51

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What makes hybrid construction the next frontier for mass timber, and how can integrating CLT with cold-formed steel create cost-effective, efficient solutions? Learn from industry leaders Ricardo Brites and Nick Milestone of Mercer Mass Timber as they discuss the rise of hybrid systems, the importance of market-driven innovation, and how their approach is shaping the future of mass timber construction.

They share how Mercer's acquisition of key facilities has transformed them into one of North America's largest producers, their focus on seamless integration of CLT and cold-formed steel, and why 2026 might be a tipping point for the industry. Packed with insights on market trends, sustainability, and the evolving construction ecosystem, this episode is essential for anyone curious about the potential of hybrid mass timber systems.


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Nick Milestone:

Mass timber is not the 100% answer to everything, but it is a big part of the solution that's required so we can adapt ourselves to what the market wants. Because ultimately, we just want to keep our factories busy. Because at the end of the day, it's not just about how to install mass timber, it's how we take care of the mass timber. Everything is such an important journey because at the end of the, we want a happy client and we won't repeat business.

Ricardo Brites:

Strikes. Normally hybrids pencil out way better than pure mass timber and we've been developing different options to hit that sweet middle place where it's not 100% mass timber but you still have some mass timber to expose and celebrate, and we see these two components specifically to be one of the vectors of growth for the industry in the next five, ten years.

Nic Wilson:

This is the Mass Timber Group Show. I'm Nick.

Brady Pots:

And I'm Brady and we talk to mass timber experts. Today we caught up with Ricardo Britz and Nick Milestone with Mercer Mass Timber, one of the largest mass timber producers in North America.

Nic Wilson:

Mercer is working on combining CLT with cold form steel for efficient and cost-effective hybrid solutions. They took us through how and why it's the next big evolution in mass timber construction.

Brady Pots:

And make sure you stick around for the end, where we talk about the macroeconomic trends facing the industry and where they see it headed in the next few years. But before we jump in, the biggest issue the mass timber industry faces right now is awareness and education, and that's what this podcast is for. When you subscribe, more people see it. When more people see it, more people collaborate. And when more people collaborate, more projects get built. So help more mass timber projects get built by hitting the subscribe button. So with that, let's get into it.

Ricardo Brites:

Hello everyone. I'm Richard Brits. I'm the director of engineering and VDC for Mercer Mass Timber. I'm with the company for the last two years.

Nick Milestone:

And I'm Nick Milestone. I'm the vice president for projects and construction for Mercer Mastinburg. I've been in the business since June 2022, responsible for all non-factory related activities, from sales, marketing, project management, engineering, detailing coordination and construction services activities.

Brady Pots:

All right. Well, thank you, gentlemen, both, for being here. We appreciate your time. We're excited to learn a little bit more about what Mercer's been up to. I actually went up and toured you guys' facility in Spokane a few months ago, met with Ryan, took us around, so I'm excited to talk a little bit more about you guys outside of the factory setting. I know we're going to jump in a lot and talk about clt and cold form steel integration, but first, like at a high level, what's mercer been up to lately and what are you guys focused on?

Nick Milestone:

yeah so I'll give you a sort of a background. So, since the the acquisition acquisition of the um clt facility in spokane and I believe it was August 2021. Effectively, myself and Ricardo were brought on to develop CLT cells CLT, that forms part of structural build system components, and that was an amazing journey. We picked up some projects, we developed our core skills in engineering and detailing, project management and estimating, and then that was really accelerated when us Mercer, acquired the structural M assets out of bankruptcy in June 2023, which not only gave us incredible firepower in terms of available capacity of both CLT and Glulam which we'd never had Glulam in our armory but also gave us an immense amount of staff to seriously accelerate the infrastructure we need to service both client projects and fill the factories.

Nick Milestone:

And so we've kind of started off as nobody knowing who we are, to probably what is now the largest available capacity of mass timber products in North America, and it's been nothing but short of an exciting and crazy journey over the last two years and we're immensely proud of what we've achieved that kind of from nothing to sort of everything in both a pioneering and a growth market as well.

Nick Milestone:

And we've needed the firepower of the and we were fortunate to have the firepower of the acquisition of StructureLam, especially because we brought in the much-needed staff of project managers and detailers, which really complemented our capabilities of engineering, that we'd already created the dynamic and it was just a lovely pairing. And, uh, and now we sort of stand back and look at ourselves and you know, in our sort of domain of myself and ricardo, we're about a 50 strong team, uh, and that just doesn't happen overnight. You know, that takes a lot of knowledge, because knowledge in mass timber on planet Earth is few and far between, as we've found out. So we're in a great position now to create good succession planning on the team that we've managed to acquire, and everybody's excited for the future, for sure.

Brady Pots:

What have you been up to on the engineering side, Ricardo?

Ricardo Brites:

Well, we've been doing a lot of things in different build systems but also servicing the projects. We have one since after the acquisition, and so we have been very excited on the very busy and very excited with projects. We have to deliver you know the normal, I will say, approval and delivery process, but also developing new build systems, new solutions that the market is looking forward to have hybrid solutions we will talk a bit about it later on, hopefully but also looking into ways of improving efficiencies internally, right? So, as Nick mentioned, we have a team of detailers that we inherit from the old structure lab. We have a team of BIM coordinators in-house this is all in-house, it's not outsourced and we have a team of engineers. So we have world experts on these three areas, which makes us a very powerful, you know, team to engage with in early design assist periods, for example, but also all the way up to construction. We also have construction services. So definitely we've been kind of building some muscle in the background to make sure that we can service the projects we have.

Brady Pots:

Yeah Well, I'm excited to unpack that a little bit more. What kind of operational improvements have you guys made in this last couple of years?

Nick Milestone:

The factory- Spokane and Conway comes under our general manager, jason Herman. Jason's a very experienced mass timber GM Any sort of you continually improve your facilities, constantly, by little tweaks. It's like a Formula One car, that's probably the best way to describe it. And so our relationship with factories.

Nick Milestone:

We, under Ricardo's domain, we responsibility, we give all the necessary what we call CAD, cam files, cnc files, which is the outputs from the 3D modeling which is a result of the BIM coordination, the 3D modeling through software that we share with the model, with the client. But then we generate the CNC files and then we have at each facility a CNC programmer who programs machines. Now that doesn't necessarily affect sort of the finger joint line or the press line for either the glulam or the CLT, the finishing and framing you, you know this is the true dynamic of mass timber comes into its own where every piece, whether a glulam or clt, and the necessary penetrations or routes actually cut into the panel. So when each panel or each glulam component goes to the job site, you know they're completely pre-finished, with zero waste and ideally with zero rework as well. So you know, we've got a limitation up to factory, but we, yeah, we are constantly. We have, I believe now seven cnc machines across all three facilities and um.

Brady Pots:

We're constantly updating both software and tooling heads, and that's because we have to stay at the forefront of technology what type of coverage do you guys have in north america, like from a technical engineering, detailing, detailing, bim side of things Like what's evolved over the last couple of years?

Ricardo Brites:

Yeah, we have full coverage all over North America. That includes Canada and the United States and we have five regional managers distributed across the continent from Canada to eastern US, west U US, pacific, northwest, of course Also the southern part of the US. As Nick mentioned, we have a plant in Conway, arkansas, that serves very well that market with the southern yellow pine lumber, but also all over the North American continent. So there is no place on North America where we don't have coverage. So between our five regional managers we have full coverage of the continent. So their contacts are obviously on the website. But, yeah, if you have any questions and you drop us a message, there's no place where we don't do business in North America.

Nic Wilson:

That's good to hear. Well, we also heard that you offer installation services. Can you dig into that a little bit and tell us what you're now specializing in?

Nick Milestone:

Yeah, I mean it was a case of listening to the market. If you look at, I suppose, myself and Ricardo's background, we both hail from the UK market. My background has been structures for three decades, be it structural steel or mass timber. Ricardo, we were actually competitors of each other in the UK, but the service offering was very much a design, supply and constructs model, because that was true British design and build, and whilst the mass timber components predominantly came from Europe, we're still the responsible subcontractor and therefore it was already in our wheelhouse and experience to offer that service.

Nick Milestone:

We never intentionally set it up to be a construction business, but our clients we see a mixture of clients that do self-perform, which is great, so we will give them that design assistant material supply in line with our project. Our clients are also installers themselves, and so therefore it was about setting up a division not to compete against our clients, far from it. It was there for certain projects where the GC wants the full package in one house, because we will often make suggestions on who should be the best installer for that region or that area. Because at the end of the day you know it's about, if you pay us to do the install, you could argue it's profit on profit, so why not go do the install yourself? But certain clients do like that full sort of design, assist, material supply and install, and so we listen to the market and so we give them back to the market what it's asking for, which is also similar, um, to how we operate build systems, be it a hybrid model, uh, be a build system model.

Nick Milestone:

You know it's about what the market wants. You know mass timber is not the hundred percent answer to everything it but it is a big part of the solution that's required so we can adapt ourselves, um to what the market wants, because, ultimately, we just want to keep our factories busy, and so, therefore, you're trying to be not everything to everybody, but be able to offer more services. So, like a number of projects, our clients say look, we've got our own self-performed team, but we've never done mass timber before, so what we'll do is one of our construction supervisors, we can offer that service within that client say look, we can do the the material supply, but would also give you the sort of site consultancy for the install to make sure that, because, at the end of the day, it's not just about how to install mass timber. It's how we take care of the mass timber during the install process. You know rainwater management, timber care procedures, everything is such an important journey because, at the end of the day, we want a happy client and we want repeat business.

Brady Pots:

You know, speaking about what the market wants and trends and stuff like that. You touched on a little bit, but I think the meat and potatoes of today's conversation is going to send around hybrid options. Can you tell us about why you guys are focusing on that and why you specifically wanted to talk about it?

Ricardo Brites:

Yeah, so we see mass timber. It's great. We all on this call. Certainly we love mass timber. If it was our call and money was not the barrier, we would love all buildings to be 100% mass timber.

Ricardo Brites:

When reality strikes and budget strikes, normally hybrids pencil out way better than pure mass timber and we've been developing different options to hit that sweet middle place where it's not 100% mass timber but you still have some mass timber to expose and celebrate. Very good synergies between steel frame and mass timber. We see very good synergies with cold form steel, CFS and mass timber and we see these two components specifically to be one of the vectors of growth for the industry in the next five, 10 years. Because, again, the amount of volume and construction we have and the prices and the costs of mass timber, they are not 100% aligned yet. So this midterm, these kind of compromise solutions, they're probably a good entry point, especially for people that are not so familiar with mass timber. They are familiar with steel or with other build systems, but mass timber is completely new to them. It's a very good entry point for those partners.

Nick Milestone:

I've come from a steel background and migrated a steel design and construct subcontractor into the world of mass timber. What we found was steel and structural steel and mass timber or CLT, especially is symbiotic to each other.

Nick Milestone:

They are designed, supplied, manufactured and installed to identical tolerances, which is 2 millimeters or 16th of an inch, and therefore the processes involved of, say, a structural steel frame pretty identical to the processes of a mass timber business and therefore we're starting to see a lot of projects where we're seeing steel frame with CLT floors. As Ricardo said, we're now starting to see a new world, especially in the short-span residential accommodation market, where we're starting to see the use of CFS, cold-formed steel structures. And then that's not to replace timber frame because timber frame is still a very competitive marketplace. But timber frame is also limited to five, six stories absolute maximum under building code. When you want to build something above six stories, say a residential unit, say six to ten stories, when your default option is RC frame. Well, now we're starting to see the world change and the use of CFS frame structures with CLT floor plates. So it's no different to a steel frame, a point loaded system with a CLT floor plate.

Nick Milestone:

Common denominator is using CLT, mass timber as the floor construction.

Nick Milestone:

In the majority of buildings 70% of the construction material goes in the floor as a primary structure and CLT is just a natural use of replacing both in situ or precast concrete floor systems.

Nick Milestone:

So for us and that really suits our Spokane facility, which produces nothing but CLT, so for us it's a good business case to promote and push hybrid structures.

Nick Milestone:

We're very fortunate to have our two facilities in Okanagan in BC and in Conway in Arkansas that actually produce glulam, because that then complements the use of steel glulam and CLT. So again, it's about not just having the capacity, it's also having the versatility to adapt to different build systems, be it an office block or an institution, you know, an education or an accommodation building unit, because the market changes constantly on building typology, demand. And you know we've seen the residential market slow down very much over the last two to three years because of interest rates and you know geopolitical situations where the residential market's calmed, but that often creates pent-up demand and we can see that pent-up demand coming in the residential market is calmed but that often creates pent-up demand and we can see that pent-up demand coming in the residential space and that might be like timber frame with CLT or CFS with CLT. The common denominator is CLT and so this is where we're getting market ready in preparation for those build systems.

Brady Pots:

How do the thermal and acoustic performances of these systems work together?

Ricardo Brites:

They work very well. How do the thermal and acoustic performances of these systems work together? They work very well. So timber, as you well know, it's naturally an insulating material, right. So it has a very low R value, about one R value of one per inch thickness, a bit over one. So that works very well. And the cold form steel system, for example, because it's so thin it doesn't really it. You don't create thermal bridges very much, so it's very easy to thermally break a system like this from cold bridges etc. So it's very, it's very positive in that regards, right.

Ricardo Brites:

So when we're talking about cold frame, cold form steel systems, these are balls that have a very thin gauge. So it's, it's millimeter wise. We're talking five, six mil maximum, sometimes three or four. So this we're talking about a 16 and eight of an inch thick. So it's, it's not, it's a 96 gauge, it's very unlikely on what some of these profiles, 54 mils, it's, the more it's, the four it's the more it's, the more usual systems we'd see. So that means that thermally, we don't have these thermal bridges that you have, for example, on a concrete building or a heavy steel frame. So this works much better Acoustically.

Ricardo Brites:

There are, of course, challenges. We are dealing with light materials and acoustic works kind of the other way around. They want mass to kind of buffer and damp the sound. So there is treatments that can be done and there are developments that have been done with acoustic specialists a few in North America, also in Europe to minimize the impact of ITC, stc, these factors for mass, timber and combined structures, hybrid structures. Bottom line is that there are solutions out there to resolve the issue and more often than not and we are a testament of that solutions have been found somewhere else in the world and we can bring it to the table given our expertise and experience. So very often we are confronted with oh never saw this before and we come to the table yeah, no, actually we resolved that problem 10 years ago in Europe, so don't you worry about this one.

Nic Wilson:

Can you talk about real world costs and marrying the two technologies together CLT and the CFS cold form steel compared to like traditional and the CFS cold form steel compared to traditional, and maybe some positives, some reasons why somebody should use this practice versus an old traditional way?

Nick Milestone:

Yeah. So if you were to look at it on just a straight light, for light structural comparison, there's the high probability on paper it looked like it's more expensive or there's a premium. The best way to look at every build system is to look at the holistic costs. When we talk about the holistic costs, so the use of clt, say, compared to concrete and the floor construction, it's going to reduce the dead weight which has a huge impact on the foundation design. There's point one. So there's an offset there. The other offset is about speed of construction. You know, chances are we'll be able to reduce the construction schedule by between 20% and 25%. Again, there's a huge saving in the GC site prelims associated. And then, of course, the developer is going to be able to realize that asset use much sooner. Able to realize that asset use much sooner, combined with other small issues of follow-on sub-trades. Typically an RC frame, a follow-on sub-trade, needs four stories to be built before they can then access by the time you remove all the back-cropping, whereas on the CLT they can access the building with only two stories ahead of them. So it's these little nuances that, using an off-site technology, allows us to enhance and reduce the construction schedule. So that has to be taken into account. And then, when you do that ultimate dynamic, you'll probably find that the use of an off-site build technology steel frame, cfs, crt is likely to have an overall impact on the construction costs of around about a saving of 11%. And that's what's not factored into consideration. And it all depends on where as well.

Nick Milestone:

So what we're starting to see is certain projects in cities where you've got a lot of union labor. Well, the whole idea of, say, an RC frame, which is, you know, a lot of labor labor, well, the whole idea of, say, an rc frame, which is, you know, a lot of labor required on the job site. When we were dealing with one project and I think it was in california, somewhere I can't remember, a couple of years ago, and the actual gc said I'm going for a steel frame, clt floor decks and prefabricated non-log bearing wall panels, and I asked why? And he said because, as a gc, it's penciling out to be cheaper because they've factored in all the holistic benefits that's associated with a lightweight dry construction solution in the structural frame, so that actually starts to pencil out, you know. Plus, then you get the benefits of of the, you know, the green, uh, and, and the sustainability that's associated with products and, of course, the low carbon construction that's impacted. So over time, when the market gets more familiar with the product, then we'll start to see a huge opportunity for mass timber.

Nick Milestone:

And North America's blessed with space, with natural resource of wood products, be it in Pacific Northwest or down in the southeast with Southern Yellow Pine, and then of course we've got the land to build those facilities as well. And so we can only see nothing but growth in front of us. And so we can only see nothing but growth in front of us. And we see the growth be more exponential based on, say, current interest rates and pent-up demand coming and hopefully, when there's a presidential election out the way as well and the market starts to move. These all have impacts on the economy as a whole. And then when construction starts moving and residential comes into that, at the same time we sort of forecast around 2026 onwards we start to see this inflection curve of huge growth demand.

Nick Milestone:

And that's not just us talking about it. That's represented by woodworks in their forecasting. That's also represented by the FEA, the Forest Economics. You know, guys, they've already done similar projections. So we're actually we'll get, we're getting ourselves market ready for when the big push comes. It's scary, but it's exciting at the same time, and our challenge as a business will be to be able to scale up, and that will be the you know. So it's okay filling your factories, but it's also a case of well, we need, say, an abundance of engineers and structural detailers to feed those factories as well.

Brady Pots:

So it's about the whole ecosystem so you outline some of the high level trends, opportunities, challenges, things that people have to be aware of in the space. What about, like, when you zoom down into the building? Are there any design challenges with using these two systems to integrate, maybe like a clt slab interface, or limitations on using it as a load bearing system?

Ricardo Brites:

no, definitely there's something different, right? So we normally try to approach it the other way around and say look at the similarities because the differences are minimum here. Right, and nick mentioned a bit and touched base a bit on some of the advantages. You know, no need for back propping, right? If you look at this similar system full concrete on metal deck with CFS, cold form steel walls. That system exists for buildings probably for the last 10 years in the market in North America and what we're doing is just swapping the CLT slab sorry, the concrete and metal deck slab with a CLT slab. That, by the way, doesn't need any back propping, doesn't need any pinning down. That's a huge saving on the costs and occupancy and able to move on with follow on trades on the lower floors.

Ricardo Brites:

Yes, the devil is on the details, as always in Mustinburg, and it's the connection between CLT and CFS, right? So this is why it's important to have this holistic approach, like we have here at Mercer, where we are in full control, in the nicest possible way, of the term of the design, the supply and installation, potentially meaning that we know exactly how to coordinate the two trades very close together, right. So the way to deal with the issues on the on the slabs, it's to make sure that you don't punch the slabs. If you want, with the cold form steel studs, we can do a very rough analogy with the stick frame walls. It's the same system with a different stud system being steel frame, right, but you want to make sure, especially when you go eight, ten stories and that's possible same system with a different stud system being still frame right, but you want to make sure, especially when you go 8, 10 stories, and that's possible to do with this system so well beyond what a stick frame can do you need to make sure that you're not putting too much compression perpendicular to grain on these panels. Right, and there is a lot of nuances there. One of the nuances is species, right, so different species have different densities, have different compression per to grain capacities, right. So we're seeing a variety. For example, just talking about our trees, not even going to other species, but we can touch there about our trees, not even going to other species, but we could touch there we have SYP, southern Yellow Pine, that has a much better capacity than, for example, spf has and that first sits right in the middle between the two. But if we throw the Europeans into the equation. We're probably talking about 40% reduction on compression perp to grain capacity on these things. So we need to factor all of these things and being holistically looking at the problem when compression perp to grain capacity on these things. So we need to factor all of these things and being holistically looking at the problem when compression perp to grain is not enough provided by the panel.

Ricardo Brites:

We need to work on pass-through solutions. That allows, if I will use the analogy load to flow from top stud to bottom stud. But that's, again, only possible if we have control of where the studs are. It cannot be a random stud placement. We need to know exactly where all the studs are placed so we can have a pass-through solution right. And this pass-through solution can be many things Steel, obviously, it's just there in hand so we can look at the steel solution. Grout solution so non-shrink routes, possible steel components, possible hardwood inserts.

Ricardo Brites:

Again, as I said before, all of these solutions have been worked in Europe. Nick, he worked in large projects. I worked in large projects in Europe. We used to build 15 years ago, 12-story structures, right, 15-story, so it's not impossible. So all the issues that we try to resolve here, some has someone has resolved in in europe and beyond 48. It's a building in in australia and they used the hard towel hardwood towels to deal with compression. But that was 15 years ago, so we don't need to reinvent these wheels. There are course details and nuances and tests we need to do to make sure that things are resolved and everyone is comfortable. But from a code perspective and approval perspective it's very similar to all the other build systems we have seen in the market.

Brady Pots:

Is there any nuances with like fire safety?

Ricardo Brites:

Very little. So these buildings will be classified like a heavy timber building, right. So a type 4B, type 4C as well, but more type 4B, type 4A for the cold form steel system. It's pushing the limits of what. I want to stress that out. It's not the limits of the CLT here, it's the limits of the cold form. So in those situations we are normally better off going to the hot wall steel solution that we see on 15, 18-story buildings on the limits of the type 4A.

Ricardo Brites:

So when we go into these build systems with type 4s, especially with the cold provisions from 2024, colorado, washington State, california, in some jurisdictions they're starting to adopt that that means type 4b you can expose way more. On 2021 provisions was pretty much all concealed in general. Now you can start exposing much more of the wood and when you expose the wood, the panels are designed to be fully fire rated. So the fire with the five-inch sorry, the five-ply six and seven eight-pick panel, we can achieve two hours fire. I will say comfortably. It's not super comfortably, but yeah, we are confident there. We have tests done, we have theoretical models showing the same behavior. So we are very confident that these systems can provide us with the fire needs that codes require. So from a code perspective, again, there's nothing to be afraid of.

Brady Pots:

So it's not different from what we've done before and CLT can perform Okay that's good to know, unlike the logistics and coordination sign, is there anything that people need to do differently integrating mass timber and CFS than they would from any other building material?

Nick Milestone:

I think that's more Ricardo, but I think we'll both say exactly the same. It's about early collaboration, early coordination, because what ultimately dictates the efficiencies of mass timber is agreeing on grid lines and where we're going to put the load-bearing members, whether that's a load-bearing steel column or it's a load-bearing CFS line, loaded wall. It's all about where we agree to put the grid lines, because often we may get a set of projects, say an RC frame, and say we'll just replicate that. Well, that's not always the case, because a grid line is often predetermined about the structural material that you use. And if something's already designed in RC frame or something's designed with a different grid line, we we're often having to and a good example of that even we have that today, and I'll give you a good example recently, where a client said I've gone to Europe, I've got a great price for mass timber, but I want to use American you know manufacturers' mass timber. And we say, okay, well, the Europeans can only ship to container widths. We can do much wider, longer panels. Europeans can only ship to container widths. We can do much wider, longer panels. We're not restricted by container widths. But, by the way, to get the efficiencies we want to change the grid. We can make the big gridder, the grid, bigger in itself and therefore we can reduce the number of, say, picks and install.

Nick Milestone:

But the client says, well, we've already pre-designed the grid and install. But the client says we've already pre-designed the grid. So therefore, you know it's it's. It's so that what the answer is is early collaboration. Doesn't matter what the build system is going to be, it's about well, what's the most efficient use? Now you could argue well, that removes competitive edge, because I'm gonna go to which manufacturer? But, to be honest, you can get the same value and you're to get the same market price. So it's about a leap of faith and it's about trust in our collaboration.

Nick Milestone:

And and now and now, what we find ourselves? Because, uh, because mass timbers on, on the on the increase, we're starting seeing a lot more from clients who are more keen to um, reserve capacity. In order to reserve capacity, then they have to single out who they're going to work with. So now we're finding we're getting more design assists where we can create the opportunity for value engineering. And please don't think that we push mass timber into every opportunity. No, we use the right material in the right place and we'll openly say that as well. You know this doesn't mean not suit mass timber. You know this is an alternative, cheaper build system because the end of day, everything is driven by cost as well, and we're acutely aware and there's nothing worse than trying to force mass timber as 100 solution when, at the end of day, the job's not going to go ahead because it's cost driven. So we're very sort of, shall we say, sensitive, sensitive to the client's capacities on spending.

Nic Wilson:

Now that you're offering design assist and then the installation services and you're overseeing everything at this point for this new technology, the CLT, and then the cold form steel, is this like a prototype you're working into or do you have real world projects that you can already point to, or where are you at in that process?

Nick Milestone:

Well. So I was very fortunate that my time between Katerra in North America and Mercer North America. When I went back to the UK, I purposely went back and I was an executive director of the UK's largest cold-formed steel design and manufacturing and build contractor and I was asked to join the business to introduce CLT as an alternative to deck and concrete. So already in the UK we were building CFS structures up to 12 stories quite comfortably using deck and concrete. So just a natural evolution of introducing clt as a much lightweight and quick construction method. So that's already been trialed and done and all we're doing now is, I suppose, similar with myself and ricardo coming from europe is we're just bringing over that knowledge and technology and and what ricardo said earlier was beautiful, the devil's in the detail. Well, we've patented details both sides of the atlantic to suit mass timber and cfs and that knowledge we're trying to make freely available, because that's what's going to open up the market and I think when you get one or two built, it's like mass timber back in 2013 maybe one job here, one job there, but then when people see it and have confidence, then it's thinking right, we can do this.

Nick Milestone:

Mass timber has gone through a good 10 years here in north america and this is why it's accelerating on itself. Bringing this alternative build system is actually nothing new, um, it just needs proving out here in North America and I think there are some projects already being built in CFS, clt maybe low rise, but it's the word of true. Market is going to be I believe is going to be the six to 10 story market for and I call it the accommodation sector. That covers a multitude of buildings that might be residential, that might be student accommodation, it might even be hotels. It's the accommodation market.

Ricardo Brites:

I will just want to add to it. Yeah, exactly like Nick said, that the market is opening a lot. There's nothing really new to to what we're doing here, but, yeah, if there is, we want to pass these. There should be confidence that these details have been worked out probably not all in one place, but have been worked out. Probably not all in one place, but has been worked out.

Ricardo Brites:

Answering your question about projects, we are aware of some projects where this has been trialed not by Mercer yet, but not to the scale we want to do right.

Ricardo Brites:

So what we need to understand is that this technology is something that needs to scale up significantly, right. So, and with the capacity, production capacity we have between our three plants, which is 255,000 cubic meters, I've just done a quick math when I was with you guys at the Mass Timber Group Summit in Denver, and that was a truck every 52 minutes out of the plant every single working day of the year. So if you're doing this many trucks a day 10, 12, 15 trucks a day you need to have the build system and the structure to follow it up right. So we need to have a resi building, student accommodation or hotel that needs these thousands of square foot a day, it's not a truck a week. That's not what we're talking here. We're talking five, 10 trucks a day on. It's not a truck a week. That's not what we're talking here. We're talking five, 10 trucks a day on a building of this scale, right.

Nic Wilson:

Well I got to say, Nick, what you said earlier really sparked my curiosity about how all of the talking heads and the people that look at the trends are speculating that 2026 is right around the corner and it's bringing good news. We're coming out of this. You know, some people call it depression or this recession that we're a little bit out of like just a stagnant period. So I know, me and Brady, we are a little bit on our heels. We're going to push forward with a residential mass timber project in Missoula, montana. The market turned. Obviously it turned for everybody, and so we're just kind of trying to figure out where it's going to go. So that's really good insight for 2026. Knowing that, what is Mercer after in the future? What's next? I know there's some big hurdles that just got over, but more in that two to three year trajectory into 2026 and 2027.

Nick Milestone:

Whatever I say is still about market driven forces. It's about the market. You know we've seen this downplay in the residential market and one thing I always learn from from nearly four decades ago is the one thing that's of inelastic supply on the planet is housing, cars, washing machines. You know it's up and down. They're of elastic supply. Whereas we're a growing population, the planet is growing, we need housing and what often happens is housing is often stagnated by political situations or economics of interest rates. They always sort of stop and pull the market and the developers have the control. The people who own the land pretty much dictate what's going to happen in the the market and the developers have the control. The guys, the people who own the land, pretty much dictate what's going to happen in the housing market. But what I've seen since what's been in four decades of construction? I've seen cycles of stagnation, recession, boom, bust, and what is always apparent is you know a lot of projects, take your project projects don't die. They just get paused. But when they do come online, well, so do a lot of projects. Take your project Projects don't die. They just get paused. But when they do come online, well, so do a number of other projects come online and that's why you get this incredible pent-up demand. And every time there's a change, every time there's a cycle that comes around. The change in the needle always points towards more off-site technologies.

Nick Milestone:

And I think let's look at history post-World War II, when there was a huge demand for housing. What did the world turn to? Well, the UK and Australia turned to prefabricated technologies, flat-pack construction. Our CFS-CLT model is a form of flat-pack construction, just it's a mixture of digital technology and VDC and with prefabricated solutions. So we've come a long way in 80 years. We're just solution ready for when the next demand comes, because population is still growing.

Nick Milestone:

Wherever you go on the planet and I'm starting to see the green shoots Even on my homeland turf in the UK, already, speaking to all our friends and colleagues that we've amassed over the last four decades, they're just saying the housing market is just about to burst. And you know and hopefully you know the horrendous geopolitical situation between Ukraine and Russia is playing a big part of the slowdown, of the stagnation of the world economy. Well, when that gets settled, you know europe will get switched on again and demand will be huge and you'll see this confidence come back now, whether it's going to be 2026. You could say, is that just wishful thinking? Well, no, that's based on evidence that's presented to us by, say, woodworks and the fea. It might not be 2026, it could be 2028, but at some point it has to turn, because we see it now in the, the types and the number of inquiries we have.

Nick Milestone:

There's still very few residential projects. It's all um. You know projects like the trpl projects, you know institutional projects, educational projects or office. We're still building offices as well and that will probably be a natural slow down anyway of of the new modern working world of home hybrid working. So there's gonna be less demand for offices.

Nick Milestone:

Well, that will put more pressure on more home building and by that and when we say more home building, you know we can see that demand not so much for single family but multi-family homes, because we're also seeing this huge next generation of sort of living and working back in the inner cities again to get that work-life balance. So I think there's a, there's a lot of evidence that points in that direction and, at the end of the day, the whole cS, clt model that we're heavily invested in is because the market's asking us. We're not going out there and pushing this great idea which we want everybody to buy. Well, we know, if you come up with a great idea and nobody wants to buy it, it's doomed. And we're just listening to what the market wants.

Nic Wilson:

Well, that's very well put. You have some unbelievable projects out there in this world and I hope people go to mercermasktimbercom and check some of those out. One of my favorites that just kind of opened up is that the bridge, the Highline Mass Timber Bridge in New York. Have you had the pleasure of walking across it yet Not?

Nick Milestone:

yet.

Nic Wilson:

Sadly no, but we will do.

Nick Milestone:

That's a feat of engineering in itself.

Nic Wilson:

Really. Yeah, it's stunning. It's on my bucket list to get out there and just walk up and, you know, hug one of those big old columns on it so well. Thank you so much, gentlemen. And yeah, if you thought the 2024 Mass Timber Group Summit in Denver was a good time, Ricardo, we're steadily planning 2025. So we're going to have some big announcements coming out in the next couple of weeks about that. So, without further ado, gentlemen, we hope to talk to you soon and we'll see you around the industry. Thank you, Thank you Nate.

Nick Milestone:

Thanks, brady.

Ricardo Brites:

All right, cheers. Thank you, bye.

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Brady Potts

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