One builder bought its cabinetry supplier. Two of the country’s largest companies are building a factory. Underneath both sits the same question about which part of the chain is worth controlling.

Most builders answer a supply problem by finding another supplier. A small number have started buying the supplier instead.

When roofing supply broke down during COVID, QA Build chief executive James Drever did not go looking for another roofing company. He told the Good Builder Podcast the thinking started with a roofing shortage.

“See a roadblock. Okay, what are we going to do about the roadblock? Remove the roadblock,” he said. “If it’s a business that is not able to supply because they’re going everywhere else, well, I’ll just buy that business and then take over myself.”

QA Build now runs solar, electrical and air conditioning businesses inside the group, alongside a cabinetry operation it acquired outright. Drever said the cabinetry business had about 15 staff when it was bought and is now more than 55, producing 60 to 70 kitchens a month with robotics doing part of the work.

That is one builder with a balance sheet most residential builders will never have. The thinking behind it travels a lot further than the cheque does.

The traditional model trades control for flexibility

A residential builder can have dozens of separate businesses standing between a slab and a handover. Frames, trusses, bricks, windows, roofing, cabinetry, electrical, plumbing, air conditioning, flooring, plastering, painting, landscaping, appliances and fittings all arrive from somewhere else.

The advantage is obvious. The builder does not need to own a factory, employ electricians or run a truck fleet, and it can scale the trades and suppliers it relies on up and down as the workload moves.

What that flexibility costs is control. When a supplier cannot deliver, the builder carries the consequence. A missing product becomes a missing trade, a missing trade becomes a stalled site, and a stalled site becomes a late handover with money attached to it.

Vertical integration in construction

Vertical integration is when a business takes ownership of a part of the supply chain it previously bought from someone else. For a builder that usually means bringing cabinetry, joinery, electrical, solar, transport or prefabrication inside the group. What is traded is capital and management load in exchange for control over price, sequence and certainty of supply.

Supply certainty has become something builders will pay for

Supply disruption is not new in construction. What has changed is how often it lands and how visible the cost has become.

In March 2026 the federal government convened building and construction leaders over supply chain disruption affecting housing supply and construction costs, with representatives from housing, construction, property development, plumbing, building materials, chemicals and plastics, civil contracting, and transport and logistics. Industry raised fuel shortages, disruption to PVC and broader plastics manufacturing across Asia, and the diesel intensity of civil work.

Closer to the ground, brick supply in Western Australia has tightened to the point of allocation. Midland Brick carries a standing notice that some clay brick and paving products are on backorder, and its maxi brick lines, the workhorse of a double brick wall, now list as enquire only rather than in stock. Builders there are not managing a price problem. They are managing whether there is a wall.

Neither of those is a procurement footnote. Both change what a builder can promise a client.

The factory is now part of the residential conversation

The second response to the same pressure is to move work off the site rather than buy the supplier.

Prefabrication is not new to Australian housing. Wall frames and roof trusses have been made away from site for decades. What is moving is how complete the component is when it arrives, with wall and floor cassettes, bathroom pods and fitted joinery now in the mix.

Policy is moving with it. Housing and building ministers noted a federal investment of $39.3 million in modern methods of construction to support standardised manufacturing when they met in May 2026. The Australian Building Codes Board has been tasked with developing a national voluntary certification scheme for manufacturers of prefabricated construction, and an Australian Standard for prefabricated and modular building design and construction is still in development.

That gap between money arriving and certification landing is where most of the risk currently sits for a builder weighing up the method.

The builder starts to look more like a manufacturer

KAPITOL has moved on volumetric modular construction with development partner ICD Property and manufacturer CIMC Modular Building. It publishes programme reductions of 20 to 35 per cent as the documented outcome on comparable modular accommodation projects.

Its position is that factory capacity on its own delivers nothing. Design, compliance, manufacturing, logistics, installation and warranty have to move as one system, which is integration of a different kind.

The larger version of the same bet is Built Living, the 50:50 joint venture between Built and Wesfarmers announced in May 2026. Wesfarmers committed up to $100 million of equity toward a precast and modular facility at the Neerabup precinct north of Perth, sized for more than 2,000 apartments a year, with construction starting in the second half of 2026 and first production targeted for early 2028.

New South Wales is approaching the same idea from the other side. Its 2026 to 2027 budget funds a Modern Methods of Construction Innovation Facility, and in July 2026 the state opened an expression of interest for manufacturers willing to establish or expand prefabricated and modular capacity, closing in August, with shortlisted applicants to be invited to submit binding proposals.

Remove the roadblock, take control of the roadblock, there is no more roadblock.

Owning more of the chain does not automatically make a builder better

For a group with enough volume to keep a factory loaded, ownership can pay. For a builder doing 30 or 50 homes a year, a cabinetry business is a second business, with its own equipment, staff, insurance, compliance, software and administration, and its own need for customers when the builder’s own pipeline thins.

That is the part the headline numbers leave out. A factory running at half capacity is not certainty. It is fixed cost.

Which moves the question. Not whether builders should vertically integrate, but which single part of the chain is exposed enough to justify controlling, and what controlling it actually asks of the business.

Control does not always mean ownership

There are cheaper positions on the same spectrum. Deeper supplier relationships that come with real forward visibility of demand. Forward procurement, which is the lever QA Build leans on hardest, with Drever describing a business that works two months ahead of construction so drafting, estimating and procurement are finished before site needs them.

Standardising specification around a smaller product range. Holding a second source for the products that have no substitute once the slab is down. Buying prefabricated components without owning the factory. Partnering with a manufacturer rather than acquiring one. Better forecasting and procurement systems, which buy visibility instead of assets.

None of that needs an acquisition budget. It needs a clear view of which supplier failure would hurt most, which is a different question from which supplier is cheapest, and it sits closer to the systems work of running a building business than to procurement.

Certainty is becoming the thing that separates builders

Builders have competed on price, design, speed, location, reputation and service. The list is gaining an item.

Can you get the material. Can you get the trade. Can you hold the programme when a supplier fails. Can you give a client a date and keep it.

Those questions read the same at twenty homes a year and at two thousand. What is shifting across conditions in the Australian construction industry is that the answer is starting to be designed rather than hoped for.

The Good Builder Take

The shift worth watching is not that a few large builders are buying their suppliers. It is that the supply chain has stopped being something builders work around and started being something they design. Most of our community will never buy a cabinetry factory. Every one of them can name the supplier whose failure would cost the most, and most have never put a number on what that exposure is worth.

Frequently asked questions

Last updated 22 September 2026. Figures and programme timings cited are current as at that date.

General Information Only. This article provides general information about conditions in the Australian construction industry. It does not take into account your particular circumstances and is not legal, financial or professional advice. Figures cited are current as at the date of publication and may be revised by their issuing bodies. You should obtain your own advice before acting on anything in this article.

Author: TGB Editorial