Our Perception of the Business Environment
In Japan, while reconstruction projects related to the 2011 Tohoku earthquake are coming to an end, the market is expected to remain flat in terms of size, with increases in projects related to disaster prevention and mitigation, mainly in response to the more frequent occurrence of record-breaking torrential rains; projects for building national resilience including four-lane highway construction and large-scale renewals; and renewable energy projects to realize decarbonization and energy security. Overseas, we will closely monitor market trends in the Philippines, Indonesia, Bangladesh, and Africa, where large projects are expected to continue despite the impact of political instability and other factors.
Business Features and Strengths
Our civil engineering business provides optimum design and execution technologies for the new construction and maintenance of civil engineering structures that support social infrastructure, such as bridges, tunnels, railways, and water and sewage facilities, all of which are indispensable to people's safe and secure lives.
We possess particular strengths in the area of prestressed concrete (PC) bridges, where we lead the industry in terms of design and construction execution. By promoting technological development, including new structural types and the use of PCa (an industrialized reinforced concrete method using factory produced precast parts instead of cast-in-situ concrete) for shorter construction periods and labor-saving execution, we are able to provide high quality, durable and easy-to-maintain bridges. We also pursue the development social infrastructure, applying tech-nologies and expertise supported by our wealth of experience in wide-ranging areas, including tunnels, dams, urban civil engineering, rivers, land development, and energy facilities. In Japan, we are increasing our share in a large-scale renovation project on an expressway, including PC floor slab replacement and tunnel repair, and overseas, we are steadily building a track record in large-scale projects, such as subways and mass rapid transit (MRT) systems, which we view as an engine for growth.
Fiscal 2021 Business Results and Major Initiatives
In fiscal 2021, the final year of the previous mid-term management plan, we set targets of 110 billion yen in domestic orders and 25 billion yen in overseas orders. Although there were delays in securing contracts for large overseas projects, we achieved favorable results in Japan, winning seven tunnel projects, mainly in the comprehensive evaluation bidding method, and exceeded our budget target with orders totaling 110.5 billion yen. In terms of completed construction contracts, we exceeded our target due to steady progress on a large number of ongoing construction projects, which contributed to the generation of stable earnings.
Future Policies
While maintaining the strengths we have built up, we will work to secure earnings and take on challenges in our growth areas to achieve steady business growth.
[1] Securing Revenue
We will establish a revenue base to rival that of new bridge construction and tunnels by strengthening our efforts in promising markets, including projects related to disaster prevention and mitigation, building national resilience, and renewable energy projects. We will further enhance on-site management by strengthening on-site support systems and improving the education system to ensure construction revenue.
[2] Challenges in Growth Areasc
We will work to achieve carbon neutrality by 2050, and expand orders for renewable energy projects to accomplish this. We will improve the productivity of the entire Civil Engineering Division and achieve work style reforms through continuous efforts involving technological development, DX implementation, and reform of the construction production system. We also intend to strengthen our foundation in order to take on challenges in new fields by utilizing each and every one of our employees.
Opportunities and Risks as well as Basic Policies of the Mid-term Management Plan as Countermeasures
Risks
- Response to the reduction of overtime work and shortage of human resources among mid-level employees
- Decrease in large infrastructure projects by the Ministry of Land, Infrastructure, Transport and Tourism and local governments
- Shortage of skilled construction workers due to low birthrate and aging population
Opportunities
- Growing need for improved productivity means increased demand for the PCa construction method
- Expansion of the maintenance and renewal market to build national resilience, including disaster prevention and mitigation projects and aging infrastructure renewal
- Expansion of renewable energy markets associated with implementing carbon neutrality policies
Related Mid-term Management Plan Initiatives
In the Civil Engineering Business, we are working to (1) strengthen profitability and (2) create sustainable new value. We will improve our competitiveness by focusing on roads, which serve a large market, and energy-related facilities, a growing field, with PC as our core technology.
Our vision for the future of construction sites that realize high quality, high productivity, safety, and low-cost operations was set as a goal for 2030, and issues to be addressed with regard to each type of work and occupation were clarified to achieve this vision. The main focus will be on streamlining design and construction. In addition, the Company will strengthen its DX implementation structure by consolidating IT-related engineers, hiring personnel with digital expertise, and providing IT literacy training.
To realize a sustainable society, the Company established the Civil Engineering SX (Sustainability Transformation) Marketing & Promotion Department to strengthen orders in the renewable energy and decarbonized energy fields, strengthen cooperation with the Business Creation Division, and reduce CO2 emissions. In addition, we will research and establish measures to reduce CO2 emissions across the entire supply chain, aiming for a 50% reduction in Scope 1 + Scope 2 and a 25% reduction in Scope 3 by 2030.
Key Projects Completed in Fiscal 2021
| Project name |
Construction work on the Iwagi Bridge (Part 2) (General Prefectural Road Iwagi-Yuge Line) |
|---|---|
| Project area | Ehime Prefecture |
| Clientc | Ehime Prefecture |
| Completion | February 2022 |
| Overview |
5-span continuous steel-concrete mixed cable-stayed bridge |
| Project name |
Power Station Unit 2 Soot and Smoke Removal Equipment Foundation and Other Works |
|---|---|
| Project area | Shimane Prefecture |
| Clientc | The Chugoku Electric Power co., inc. |
| Completion | May 2021 |
| Overview |
Construction of the foundation for soot and smoke treatment equipment and related ground improvement work |
| Project name | (Temporary) Chinju Ohashi Bridge Superstructure Construction |
|---|---|
| Project area | Miyagi Prefecture |
| Clientc | Miyagi Prefecture |
| Completion | March 2022 |
| Overview |
3-span continuous rigid-frame box |