Innovative AAC technology influencing Southeast Asia

October 21, 2021

To understand the specific requirements and gain a firm foothold in Southeast Asia, HESS AAC SYSTEMS established a regional representation in Bangkok, Thailand. Among the key focus areas of HESS AAC SYSTEMS business were a physical presence at customers site while maintaining close contact with them. This allows the plant supplier to support customers in evaluating and assessing their existing factories and to help them eliminate bottle necks and improve the quality of the final products, in addition to providing an A-to-Z turn-key service for setting up a new factory.

High quality AAC blocks with hand grip after installing a new Hess AAC cross cutter

The Southeast Asian Market

There are huge cultural differences and a wide range of regional developmental indicators.  These range from high technology/high salary countries (Japan, South Korea, Taiwan, Singapore, Hong Kong) and developing markets (Malaysia, Thailand, Vietnam, Philippines, Indonesia), which are evolving from low-cost labour to skilled worker countries, all the way to the emerging countries like Myanmar, Laos and Cambodia. The ambient temperature range covers the four seasonal zones, with cold winters and hot summers, as well as the tropical rainy and non-rainy seasons. What all these countries have in common is their pan-Asian culture of hospitality and sociability. Apartments are small and most of the time will be spent outdoors. There is still a huge demand for affordable living space, and new high-rise buildings spread like mushrooms everywhere, as the trend of moving from rural to urban areas is picking up speed.

The existing market status and popularity of AAC in Southeast Asia is very diverse. Countries like Indonesia, Vietnam, Thailand and Malaysia have been using AAC for a long time with many running production plants. The market in the Philippines is growing fast with only a few AAC factories at present. In Japan, super-light AAC insulation panels are very popular while in Taiwan AAC is almost non-existent.    

Nevertheless, a lot of false information and prejudices about AAC can be heard everywhere such as: “AAC is too weak for load-bearing walls”, “AAC will be eaten by termites”, “AAC will turn green in colour due to ageing over time”, “AAC walls will sweat due to high temperature and high humidity”. Market acceptance is not very high yet, which is partially owed to these misconceptions.

Production plants

Many factories are 10+ years old, predominantly supplied by Chinese companies. Pro-active maintenance is not very common yet, which eventually results in high repair costs and low product quality.  These factories produce mainly 70 to 75 mm wide blocks, which are very popular and satisfy market demand. A lack in dimensional accuracy and damage to the blocks are not big problems, as Grade B and even Grade C can still be sold for a lower price. In addition, blocks are mainly used to fill up the space between columns and beams, using a lot of mortar instead of AAC glue. However, there are a few modern factories which are challenging the older ones. A modern and well-maintained factory can provide a higher productivity and less downtime, resulting in lower costs per block. High precision cutting lines will create less break out, and a green instead of a white separator can avoid blocks sticking together after treatment in the autoclave. 

AAC is still growing fast in Southeast Asia and several existing manufacturers as well as new players are planning to build new factories. In addition, the modernization and upgrading of existing factories is a very interesting task aimed at preparing them for the upcoming requirements of high-quality blocks and panels, as well as improving their competitiveness against modern factories. Most existing “block only” factories can be easily upgraded to also produce reinforced panels if the space is available. Old and worn-out production machines can be replaced with state-of-the-art versions.

Key challenges in the Southeast Asian construction industry

  • Construction time is affected by rising labour costs and increasing demand for living space. 
  • Green Building regulations are coming into force or getting stricter, challenging the accustomed way of construction. 
  • Increased price volatility in raw materials, such as steel.
  • (Natural) disasters like earthquakes, floods or fires will get more frequent and fiercer, challenging the construction industry to find better solutions. 
  • Energy consumption is rising faster than supply. Energy efficient green buildings will become increasingly important.


AAC: The promising solution to key challenges

  • AAC blocks can be produced with a thickness of up to 350 mm and used for load-bearing walls for houses in every climate, providing a very good thermal insulation and reducing inside heating or cooling costs. The blocks save 50% of construction time and up to 80% of costs, as consumption of steel is reduced compared to the column and bean construction method. 
  • For fast erect low-cost housing projects AAC panels can be used for outside walls. 
  • AAC partition wall or floor panels in high-rise buildings can reduce costs as well as the total mass of the building.
  • Slim, low-density panels can cover walls to provide fire protection and thermal insulation. 
  • Narrow tolerances using high quality blocks allow application of thin joint glue, improving thermal insulation by avoiding thermal bridges. 
  • AAC contains 85% of air, therefore one cubic metre of raw materials can generate up to five cubic metres of AAC blocks. Using only natural materials that are easily available and reducing the amount of cement consumed, AAC is considered a sustainable construction material with low carbon footprint. 

Market entry

Using innovative AAC technology shall change the construction of buildings. Architects who specify the materials and the way of construction need to be further educated about the benefits of AAC. Developers have to consider new options for the design of residential buildings and multi-storey offices. AAC manufacturers shall upgrade factories to provide blocks with high accuracy, reinforced panels, and glue for perfect implementation of AAC in any construction project.
Many AAC manufacturers and wholesalers already invest a lot in training and work closely with architects and other customers to promote the advantages and the correct use of AAC. Efforts shall continue to achieve the full benefits. Architects and Green Building consulting experts are invited to join.

HESS AAC SYSTEMS is supporting these challenging tasks by providing seminars and co-operating with local universities in Southeast Asia. Based on its decades of experience in all major brands, HESS AAC SYSTEMS will be the competent partner to update existing factories by replacing worn or outdated production machines or by upgrading the production to include reinforced panels and/or AAC Glue production. For setting up new factories, HESS AAC SYSTEMS provides a full range of services such as end to end customized solutions, assistance with export credit through a European bank, support in business development, supply of equipment / plant machinery, comprehensive training of personnel on machine operation, as well as development of optimum AAC mix compositions.

Front view of the MAK LLC factory

A success story to this effect was seen in Mongolia. MAK (a HESS AAC SYSTEMS customer in Mongolia) took over the market with very competitive high accuracy blocks, and already upgraded the factory to reinforced panels. The government housing development board was tasked with providing an affordable thermally insulated house for everyone. This included replacing traditional and popular yurt tents using wood fire heating with AAC block houses and central heating systems. For this to happen, the existing way of construction had to be influenced and changed.

Final products at MAK LLC factory

By now the Euro-Block branded MAK product is commonly known as MAK-Block and MAK-Block house. Having only a small population of 3.3 million people and everything coming together perfectly at the right time (MAK factory, government housing project), this development was possible in a very short time. This is an example of how one modern state-of-the-art factory changed the construction landscape of the entire country.

The development of the many countries in in Southeast Asia is going in the same direction. HESS AAC SYSTEMS is part of the journey.


HESS AAC Systems B.V.

Aluminiumsteden 10
7547 TN Enschede, The Netherlands
T +31 53460 1700 
F +31 53460 1799