Thursday, Jul 19, 2018
Real Estate | Asia-Pacific | Japan

Hitachi Zosen, Japan

‘We have always strived to create a prosperous world through construction projects’


2 months ago

Takashi Tanisho, President of Hitachi Zosen
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Takashi TANISHO

President of Hitachi Zosen

We speak with President of Hitachi Zosen, Takashi Tanisho, about the superiority of Japanese engineering and construction firms, and the evolution of his company over its history of more than eight decades.

 

From your point of view, what is the competitive advantage of Japanese infrastructure and construction firms?

Historically speaking, Japan has always been a disaster-prone nation. The natural adversities we have faced have forced us to place great emphasis on the development of sustainable and highly technological construction projects. Thanks to the expertise we have acquired in the fields of disaster prevention, Japan now has the ability to support countries from around the world. 

The core competencies of the Japanese construction industry can be summarized in two points. The first point can be crystalized in one word: quality. In our industry, the quality of a product or a project can be assessed by its longevity. The key question that must be asked is: “Thirty to forty years down the line, will this product still hold up?” I can state with certainty that Japanese products do. From solar panels to ships, the “Made by Japan” production system remains reliable on the long term. Through its capacity to sustain repeated usage, Japanese products will reveal their true qualities over the years.

The second point concerns “project delivery.” Delivering on one’s promises has become embedded within the corporate DNA of Japanese organizations. We put great emphasis in

ensuring that delivery commitments are met in a timely and qualitative manner. Even when conflict arises, and it often does so, Japanese firms have proven to be partners of choice, willing to listen and endure. Even in the face of obstacles, Japanese corporations pursue their work relentlessly while working towards conflict resolution. This entrenched commitment to reliable delivery is perhaps our greatest advantage, and it differentiates us in front of Korean, Chinese and European firms. Japanese firms are most remarkable in this regards.

 

What are the differences between working in emerging markets and developed economies? And what allows Hitachi Zosen to be competitive in both?

The differences between working in developed and developing nations are varied and multiple. The first aspect is linked to permit obtainment. The various rules, procedures and permissions for construction sites greatly vary between countries. When it comes to developed nations, bureaucratic aspects are rather clear. To obtain the necessary permits under the required timing, we simply have to follow the rules in place. 

When it comes to developing countries however, and especially when we bring-in new products, some rules are not yet in place. Because there is no prior history in dealing with certain materials and projects, the whole process takes time; and procedures are not as clear. When facing such situations, we persevere until making it happen. At Hitachi Zosen, we have learnt to tenaciously pursue our objectives until achievement. 

The second aspect regards investment capacity. In developed countries, product functionality must be met with aesthetic design. At Hitachi Zosen, we have learnt to combine both physical and functional outlooks to please even our most demanding clients. When it comes to developing economies however, the functional aspect is primordial. As long as key characteristics are met (such as occupation capacity), the aesthetic features matter little. 

To meet the needs and budgets of all our clients, we work with local staff and organizations in order to lower our operational costs. By doing so, Hitachi Zosen is able to respond to the different needs and challenges ahead. This great level of adaptability has made our success for many years.

 

The structural problems of Japan, the negative demographic line and the ageing population, are creating a shortage in the labor force. How can the Japanese construction industry remain competitive in the face of such challenges?

There are three ways to maintain the competitive level of the Japanese construction industry.

Firstly, we must increase our productivity through the use of innovative technologies, such as robotics and AI. There is still a large margin for growth in that regard and we have yet to reach optimal productivity levels. 

Secondly, we must invite more foreign workers. While we have recently witnessed an increased number of South East Asian immigrants, accentuating that number could solve the issue of our shrinking labor force. Overseas workers massively immigrate to South Korea and China. However, many of them come to study in Japan to acquire cutting-edge techniques before returning to their own countries. Working conditions in China or Korea might be good enough but we see our technique as a strength to invite more foreign workers. 

Thirdly, and if the domestic workforce grows further limited, we could relocate our manufacturing operations overseas. By producing the bulk of our products in international facilities, we could transform Japanese facilities into the end-product “finishers.”

Thanks to these three opportunities, our industry has room to grow and prosper.

 

Established in 1934, your company is a longstanding Japanese corporation. Can you highlight the milestones achieved since inception?

Our firm is called Hitachi Zosen, with Zosen meaning “shipbuilding”. Right from our humble beginnings, we have always strived to create a prosperous world through construction projects. In the post War period, we acquired our technology from the West. Even today, a large part of our work reflects the historical partnerships developed in the post war era. Moving forward, we must place our efforts in developing the construction techniques of the future. Today is the time to create the growth foundations for tomorrow.

Since entering the XXIst century, we have lived through two major milestones. In 2002, shipbuilding, which represented 20-30% of our business, was allocated to a different firm. In 2010, we created the core of our current business: Energy-from-waste Plant. We received this technology thanks to AE&E Inova AG (Hitachi Zosen Inova AG at present), a company we acquired. Today, we are proud to be known as the Hitachi Zosen that prioritizes the planet. 

To return to our beginnings, our Northern Irish founder “E.H. Hunter” sent his three sons to study abroad in Germany and England. To send one’s children abroad at that time was truly forward looking and progressive. At the start of the 1900s, the source of our materials shifted from Europe to the USA, and we began to use American materials as Japan did not have any iron producers. In short, we were born with this international DNA.

 

Can you tell us more about the philosophy of Hitachi Zosen?

To understand our philosophy, you must understand our history. We started in 1881. At the beginning, we were founded by a Northern Irish individual and we started as a shipbuilding corporation. As a matter of fact, ZOSEN means shipbuilding-terms. We started by importing iron and related materials from Europe. At that time, our principle was to create everything that we could. We wanted to produce solutions that could meet the needs of the time. Moving forward to the post-WWII era, Mr. Nagata , who became president, incorporated corporate principles that treasured each employee. He articulated an incredible motto: “We are one million managing the company.” This one million enterprise included staff, clients and all stakeholders. In 1990, Mr. Fujii became president, and our motto was re-written as it now stands: “We create value useful to society with technology and sincerity to contribute to a prosperous future”. While we have shifted with the time, the core principles of our firm have remained identical. We are committed to contributing to society and to treasuring our employees. 

 

Can you tell us more about your efforts to promote a sustainable approach to business through your activities?

First of all, it is our businesses themselves which are focused on sustainability. Our activities in renewable energy production and water treatment are green businesses. The increase in worldwide population combined with the growing urbanization of developing economies must be closely monitored in order not to further contribute to the degradation of our planet. At Hitachi Zosen, we believe it is our role to contribute to the sustainable development of our world.

Second of all, we abide strict environmental requirements for our business processes and productions. As a firm, we constantly research how to reduce our CO2 footprint. In terms of our construction, all of our new buildings are supported by solar panels and LED technology. From our carbon footprint to our waste disposal, we are continuously exploring new ways to reduce our environmental impact.  

 

Your company operates in 3 main business segments. Environmental Systems and Industrial Plants, Machinery, Infrastructure. How do you benefit from the synergies of this diversified portfolio?

 

These diverse fields can be grouped into two core segments. First, is engineering and plant making, such as our energy-from-waste plants. Second, is construction and “Monozukuri, (manufacturing) such as building bridges and other infrastructures. That being said, engineering and construction are linked. The core elements utilized in the engineering field, such as the plants’ boilers, are made internally through our own construction efforts within our own factories. All our businesses are linked, and that is one of our greatest strengths.

Another competitive advantage of Hitachi Zosen regards the quality of our after-services. Not only do we deliver products to our clients, but we also deliver services to enhance the post-construction management of our projects. Furthermore, we collect a large amount of product-data linked to operating levels, productivity, need for maintenance and more. All this data is then observed and analyzed to improve the productivity and operational level of our solutions. 

 

How does data collection improve your working efficiency?

More than ten years ago, we started utilizing these solutions to monitor and enhance the productivity of our energy-from-waste plants and our power generator systems. And now, we start to incorporate their AI technology into our operations.

The results have been threefold. Firstly, we have been able to provide stable and effective operations. Throughout our projects, we have consistently maintained the adequate power generation. Even when unplanned events unfold, we are able to operate in a consistent way.

Secondly, we have reduced the work burden of machinery operators. In times of emergency, we have remote observers supporting our operators to insure an effective and timely response rate.

Thirdly, our products can be utilized for thirty to forty years, as we have successfully simplified maintenance. Instead of having to conduct an overall assessment, our data analysis allows us to effectively identify which piece requires replacement. This has allowed us to reduce maintenance-cost, and to save resources. 

 

Which project was the most impactful to you and why?

Often times, we say that it is important “to create things that remain on the map.” I will never forget the power station we created in Saudi Arabia about twenty-five years ago. This project was a consortium between three firms. We were the project leader and in charge of building the boiler for the power station. General Electric was working on the turbine generator, PENTA-OCEAN CONSTRUCTION was in charge of construction. This part of Saudi Arabia was not the easiest climate or land to work in. But when we were able to finally work together and develop this power station, the local people started to gather around our area of operation. Houses were being built, and soon, an entire city rose from the ground. A market was constructed and followed by a mosque. At night, you could see lights shining brightly. At that moment, I was reminded that our work creates wealth. The development of one plant was enough to bring an entire city together. 

 

What activities will you focus on for the future?

Looking down the line, our activities in renewable energy and sustainable power stations will remain our main focuses. As fossil fuels are being replaced by renewable energies, the future.

 

Can you tell us more about your R&D efforts? 

In terms of R&D, we have split into 2 tracks of thinking. Track number one deals with improving and deepening the value of current products. To continue on increasing the value and the efficiency of our solutions, while reducing cost requirement, we invest in R&D efforts.

Track number two concerns our ability to develop future products. “Methanation,” for example, is a product under constant research. We also research functional materials to increase the sustainability and performance of our materials.

 

What ambitions do you have for Hitachi Zosen?

We want to grow into a firm able to deliver solutions to global challenges, such as energy and water. We want to deliver these solutions all around the globe. That is my dream, and I hope that I can aspire all of our employees to pursue the same dream that I have.

 


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