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Achiha: Powering Japan's future, whilst towering over renewable energy challenges

Interview - February 13, 2024

Achiha's groundbreaking approach to revolutionize Japan's energy landscape blends innovative tower cranes and comprehensive wind power solutions to lead the charge in sustainable development.

TAKAAKI ACHIHA, REPRESENTATIVE DIRECTOR OF ACHIHA CO., LTD.
TAKAAKI ACHIHA | REPRESENTATIVE DIRECTOR OF ACHIHA CO., LTD.

With Japan being an island nation, 95% of its energy is imported. The Kishida administration revised its basic energy plan to focus on more renewable energy. Since 2011 and the Fukushima disaster, nuclear power has fallen out of favor. However, some still defend it since it would reduce industrial manufacturing costs, which are three times more important than those in China or the US. The narrative is that Japan's current energy mix is robbing it of its international competitiveness. What is your opinion on the energy mix that would be the best for Japan?

When I was a child, I vividly remember listening to my grandfather’s war stories. My grandparents lived through World War II, and my grandfather was a sergeant in the Imperial Japan army. One of the reasons I learned from him was that Japan's necessity for oil caused the war.

Being an island nation, Japan faced challenges in generating energy locally and had to rely on importing raw materials from overseas. The advent of renewable energy, particularly wind and solar power, presents a promising solution, allowing us to harness energy from resources within Japan. This is significant, considering that the war in which my grandfather participated was fought to secure oil as one of the reasons.

While renewable energy is an excellent energy source for Japan, its adoption comes with a considerable cost. Generating sufficient variable renewable energy can be challenging due to substantial energy requirements. Therefore, incorporating a fixed-type energy source, such as nuclear power, becomes crucial.

The energy mix plays a vital role, where a balance between variable renewable energy, fixed-type energy like nuclear power, and even a controlled amount of thermal power, despite its CO2 emissions, is essential.

While the current cost of renewable energy is relatively high, it is expected to gradually decrease over time. Drawing from personal experience, I've witnessed significant cost reductions in large, old industries over the past 40 years. For instance, the expenses associated with transporting and installing heavy press machines have decreased to one-third of what they were.

I believe that the ideal energy mix should be a combination of renewable energy, thermal energy, and nuclear power. However, the majority of this mix should be composed of renewable energy sources.

Most Japanese companies working within the renewable energy field depend on the government’s Feed-in Tariff (FIT) system and Feed-in Premium (FIP) system, introduced in 2012. Slowly, the government is starting to decrease the number of subsidies through these programs. How do you think the renewable energy industry in Japan can develop and progress without relying so much on the government's FIT and FIP systems?

We've achieved significant profits due to the FIT and FIP systems, which have proven highly beneficial for our business. Even as the utilization of these systems decreases, we remain well-positioned to move forward, and we are currently engaged in several projects.

The project owner of the wind power project must go through different entities to handle the civil works and installations of the wind power assets. Within this structure, I'm aware that there are many different actors on the site.

As the project owners, we're currently involved in three projects. In 2024, we plan to initiate one in Hokkaido and two in Ishikawa Prefecture. Our approach involves gaining valuable insights from the local elderly population to understand more about setting up wind power assets. We’ve selected the German manufacturer, a brand that has not yet been introduced in Japan. Initially, we faced reluctance from some companies to engage with our lower capacity category, which is under 7,500 kilowatts.

Since this size of a power project, cost reduction shall be so essential for increased business feasibility. As the project owners, we can efficiently handle every related work such as transportations, construction of roads, civil works, installations, and electrical works, whatever by ourselves to minimize the whole project costs.

There are many candidate wind power projects in Japan, but many can’t be completed because of the high costs linked with general constructions. On the contrary, it’s possible for us. We are committed to expanding our project portfolio as project owners. Clients across Japan seek us for these endeavors, recognizing that Achiha is uniquely positioned to deliver on such projects.

The energy industry is one of the key industries of the century, since the shift toward more sustainable solutions has been a constant challenge over the last two decades. Alternatives such as solar panels, wind turbines, and many others have limitations, such as alternative efficiency, where the energy produced needs to be immediately filled within the systems and used without delay. The maintenance and replacement or the second life of these types of power plant haven't been well anticipated and end up having the reverse effects by polluting the environment. How does your company try to alleviate these challenges when it comes to wind turbines?

Elevating the hub height is more efficient to get more units. With a larger crane, this would be the standard. By using the tower cranes, we can keep these standards higher. Tower cranes offer the advantage of working within existing spaces, even with an increased hub height of up to 140 meters. This not only helps conserve the surrounding forest area but also enables operations in narrow spaces, contributing to environmental sustainability.



The incorporation of storage batteries is essential for efficient energy storage in our current role as project owners.

In an interesting side story, our first engagement with one of the leading worldwide outdoor brands faced obstacles due to their misunderstanding that our involvement in renewable energy, particularly wind power assets, negatively impacts the environment by disrupting forests. In response, we explored alternative solutions, such as the tower cranes, showcasing our commitment to addressing environmental concerns. They finally convinced our environmental credentials, and the business was fully completed.

When you started the conception of wind turbines, the two challenges you faced were the transportation of various gigantic parts like the blades and the weight of such motors to be assembled several meters in the air. You developed Japan's first tower crane exclusively for wind turbines, with a maximum working height of 150 meters and a capacity of 140 tons. You also developed a specific blade transport device, which is the FTV-500, installed on your Goldhofer multi-axle trolley (SLE). How does developing this machine make you a partner of choice when assembling wind turbines compared to your competitors in Japan and overseas?

My assessments of what benefits Japan's renewable energy industry are based on a deep appreciation for the values my grandfather had treasured in service to our country. We make decisions based on what we determine to be best for Japan's renewable energy sector.

Our approach involves strategic considerations such as exploring the use of the tower crane and developing innovative products geared toward cost reduction. For instance, even in the utilization of the tower cranes, our primary concern is not just our operational expenses but the impact on civil engineering costs, a factor that significantly influences customer satisfaction. I always make comprehensive improvements, recognizing that we need to go beyond our company's boundaries.

Have you ever considered exporting these services to overseas countries, considering that they could benefit people in many countries?

My exploration of the tower cranes began with watching videos of a Danish company's crane operations on YouTube. Impressed by their performance, I decided to incorporate similar tower cranes in Japan. Following a call to the Danish company, they extended an invitation to inspect their tower cranes in Thailand. We arranged a meeting at the airport in Thailand.

We initially tried to import the tower crane from Denmark, but it was impossible due to the seismic activity prevalent in Japan. The tower crane they made in Japan was more expensive because the materials used had to be stronger to resist an earthquake. Importing the crane from overseas, given the seismic requirements in Japan, isn’t cost-effective.

Japanese tower cranes adhere to stringent standards and are designed to withstand giant earthquakes. The inherent strength of Japanese cranes is remarkable.

What role does partnership play within your business model, and are you searching for new partnerships, especially with overseas companies?

Japan's wind power generation industry still has several subjects to learn from overseas. To address these distances, we are actively seeking out excellent companies with innovative technologies worldwide. Recently, we reached out directly to some overseas leading manufacturers and scheduled a meeting to explore potential collaborations. Japan's wind power generation industry will further develop from now; we emphasize the importance of collaborating with overseas companies to leverage their advanced technologies.

Your expertise in heavy cargo handling operations allowed you to diversify your services by offering to transport railway vehicles to overseas countries, including heavy ex-military goods like army jets. You also help transport and install heavy mechanical equipment for a wide range of industries. Which of these activities do you consider to have the most growth potential from a business point of view? Are there any new businesses or fields to which you would like to cater your services?

Now, we, Achiha, are expanding our business field over the whole wind power industry, leveraging our position as the project owner, as EPC contractors, as Operation and Maintenance contractors whatever. Now we are establishing the comprehensive framework that we shall handle in the whole wind power business as “from cradle to grave.” Looking ahead, we are also considering expanding our operations to overseas projects.

Through our experience in a similar venture project a decade ago, we dealt with the Japanese old trains which transported and sold them to Thailand, Philippines, and Indonesia, we have learned the value of handling the entire process. In that business, our holistic approach allowed us to reduce costs and bring satisfaction to people in Southeast Asia. Although we started business as a transportation company, our principle has “Consistently pursue roads that bring happiness to everyone involved.”

Where would you like to continue your international expansion?

We are actively exploring opportunities for international expansion into Southeast Asia. To facilitate this, we had initially established our overseas branches in Vietnam, Indonesia, and the Philippines. However, with our current focus on preparing for an Initial Public Offering (IPO) in 2025, we have made the strategic decision to assign and sell these branches to local partners.

In line with this process, our head office remains in Japan, and we are currently undergoing an audit for IPO. We now recognize the importance of establishing a well-organized structure and adhering to the correct procedures to obtain necessary approvals.

Imagine we come back in five years for your 105th anniversary and have this interview all over again. What would you like to tell us? What are your dreams for this company, and what goals would you like to accomplish over the next five years?

In five years, we aim to become Japan's leading company in the renewable energy sector, providing comprehensive services from wind power business development, project owner, construction, and operation & maintenance works.

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