Oneconstruct collapses amid rising building costs

A building company that worked on several school upgrade projects has collapsed, and there could be more pain on the way as material costs continue to rise.

An Adelaide building company that worked on school upgrades and public housing projects across the state has collapsed amid rising material costs that are causing pain across the industry.

Oneconstruct specialised in modular construction, which involves building major components, or “modules”, off-site in a factory environment and then assembling those components on-site.

The company moved to new premises at the former Holden factory in Elizabeth last year, and in recent years completed new modular classrooms for Mitcham Girls High School and Prospect Primary School, as well as building houses for the SA Housing Authority.

Liquidator Dominic Cantone from Oracle Insolvency Services, who has been appointed to wind up the company, said the business mostly relied on subcontractors but two full-time staff had lost their jobs as a result of the company's closure.

“This is a very unfortunate situation,” he said.

Oneconstruct directors Dino Gallina and Vince Cosmai at the former Holden site. Picture: Michael Marschall

“A major factor in the collapse of the company was the rising cost of materials due to global supply chain issues. With Oneconstruct completing jobs on set price contracts, the company had to absorb the increasing costs.

“Unfortunately, this was no longer financially viable for the business.”

Mr Cantone said investigations into Oneconstruct’s collapse were ongoing, and debts to subcontractors and suppliers were expected to exceed half a million dollars.

South Australia’s construction industry has until now weathered the storm that has caused a string of company failures in the eastern states, as builders locked into fixed-price contracts face a surge in costs caused by severe shortages of materials and labour.

Sydney construction firm Next, Melbourne’s Probuild and Queensland’s Condev are among the larger building companies to have collapsed over the past 12 months.

A transportable classroom at Mitcham Girls High School. Picture: Mitcham Girls High

Construction insolvencies in South Australia have been limited to a handful of smaller firms, while the big players have taken a hit but survived.

However Mr Cantone said the industry continued to face challenges on several fronts.

“We have seen the pressure on the building industry with increased freight costs wreaking havoc on global supply chains,” he said.

“A lack of materials has led to construction delays and rising prices. If a builder is unable to pass that higher cost onto the customer because the contract was signed at a fixed price, it can put enormous strain on a business.”

Oneconstruct, which was operated by directors Vince Cosmai and Dino Gallina, was one of several modular construction firms to have emerged in SA in recent years.

The emerging construction technique delivers time and cost savings, and has been widely used in the state government’s $1.5bn-plus school upgrades program.