Z Modular Announces the Closure of Its Modular Building Factory in Kitchener, Ontario

CHICAGO, IL / ACCESSWIRE / June 25, 2024 / Z Modular, a division of Zekelman Industries, declared the closure of its modular building factory in Kitchener, Ontario. This facility was responsible for producing modular units for multi-family housing in Canada. The company will shift its focus to its U.S. facilities, which are strategically situated in burgeoning residential markets.

Z Modular identified several factors contributing to this decision. Inefficiencies in the public sector's permitting and entitlement processes have made land for housing development scarce and expensive. Consequently, developers face prohibitive costs and delays. Additionally, financing for modular construction in Canada has been inefficient and costly, exacerbated by slow approval processes under the Rental Construction Financing Initiative managed by CMHC. Inflation driven by government spending has also increased operating costs substantially, raising project risks.

Barry Zekelman, executive chairman and CEO of Zekelman Industries, stated, "Despite the hard work of our teammates, the Z Modular business in Canada is unsustainable due to high land costs, overregulation, and inadequate financing support. Our investment and efforts have been undermined by systemic challenges in Canada's housing market."