Facing tough times and prospects of closure, the Indian operations of Katerra, a Menlo Park (Silicon Valley)-headquartered design and construction company, are likely to be impacted, including the under-construction ₹700-crore greenfield plant near Hyderabad.
According to reports in the US, Katerra, a rapidly growing construction company, which attracted investments of about $2 billion, including funding from Masayoshi Son’s SoftBank, is on the verge of closure. The reports suggested that the employees in the US have been informed about the problems the company has been facing and the prospect of its shutting down.
However, local company officials were unreachable.
Founded in 2015, the company, whose work included offsite completed 3D rooms, walls, columns, modular units and bathroom pods and buildings, had big plans for India. It set up a unit in Tamil Nadu and had announced its plans for a $100- million (about ₹700 crore in 2019) manufacturing facility for building components near Hyderabad on a 50-acre site.
The plan was to complete the project, a robotic assembly line in 2020, and expand its presence in India by setting up more units in the country.
Covid disruption
Overall impact on the construction sector globally and later due to disruption caused by the Covid pandemic in 2020, has had significant impact on the company. In the second half of 2019, the company had announced plans for second off-site manufacturing plant in India after the first one at Krishnagiri in Tamil Nadu.
A report by Bloomberg said “Construction start-up Katerra Inc. is shutting down, according to a person familiar with the matter.”
A company executive cited the Covid-19 pandemic, along with soaring labour and construction costs as reasons for its financial difficulties.