With a wide network of locations and seven decades of experience, Asahi Etic covers clients’ every need, including construction, signage, electrical and painting services.
It is widely known that Japan’s construction boom occurred in 1964, around the time of the first Olympic Games in Tokyo. As such, many construction projects here in Japan are aged and in need of maintenance. Could you give us your assessment of Japan’s construction industry and its current needs?
We are focused on large roadside stand-alone stores including car sales stores, food service stores/gas and hydrogen stations, and truck fueling stations which are operated by companies specialized in managing chain stores throughout Japan. The current market necessitates an increase in the number of these stores, as well as the reconstruction and renovation of older ones.
We work with such companies, and if we have gained the trust of our clients, we will be chosen again to work on their next jobs. These large roadside retail stores need to finish construction in a short period of time.
We are able to satisfy this need and meet this demand because of our integrated system of "signage, store construction, electrical equipment, painting, and manufacturing" and our nationwide network of offices throughout Japan.
In Japan, there is a law called the Building Standard Law, which has many regulations in construction, electrical equipment, and signage. We have many engineers who are well versed in these matters and have the necessary national certifications to do the job.
Your firm is clearly much more than an engineering one, you have developed a range of technologies and skills related to plastic molding, electrical work, and even metal work. Everything is done in-house so as not to rely on outsourcing to other companies. Can you explain why you have chosen this fully integrated model and some of the benefits it allows for your company?
We have six factories in Japan for our manufacturing activities. This way, even in the event of a disaster in one area, our overall production will not be affected. And, because of our own factories, we are able to maintain strict quality control standards. The factories produce signs, LED lighting fixtures, construction steel fabrication, steel/non-ferrous metal fabrication, plastic molding, and screen printing.
Our factories are ISO 9001 certified, and its steel frame fabrication is certified by the Minister of Land, Infrastructure, Transport and Tourism as M Grade.
Our factories excel at "high-mix low-volume” production. This means that we cannot introduce robots to completely save labor and increase production efficiency. We cannot find a robot that can replace the know-how that has been cultivated over our 69-year history with the employees working for us. Each and every one of our employees has demonstrated very good efficiency and produced quality products.
However, in order to increase production efficiency, we have introduced many labor-saving devices. In particular, we have recently adopted welding machines that produce less CO2. In addition, we have recently developed sign boards that do not use welding and use bending and bolt nuts instead to reduce CO2 emissions in the manufacturing process.
Many Japanese companies now have a rapidly aging workforce and with the population decreasing there are fewer and fewer people to recruit to fill roles left by retiring workers. A recent Nikkei report said that Japan needs 6.5 million foreign workers by 2040 to sustain economic development. In the case of your company, how has the changing population affected your business, first in terms of the domestic demand for your services, and secondly how you are adapting your workforce?
In Japan, the aging of workers and national policies are tightening restrictions on working hours. Our construction division is exploring two options to compensate for these changes.
First, since we have our own factory, we are trying to produce as much as possible at our sites, not only for signage, but also for construction, so that we can simply assemble the already finished products at the construction site.
Secondly, we are promoting the construction of BIM. The government recommends BIM only for the construction field, but since our company's core businesses are signage, store construction, electrical equipment, painting, and manufacturing, we are building a comprehensive BIM system that covers all of these fields. This will be our own proprietary system, and we are building it in industry-academia collaboration with Nihon University.
During our research, we discovered that you currently hold 16 patents and some of them include illumination control systems and color change detection systems for your signage. Could you tell us a bit more about these unique patents that you have and the technologies you’ve developed for your sign-based business?
We have a Technical Development Center. When we receive an order for a signboard, we study the shadows and the placement of light sources to satisfy the customer's color requirements, and provide the results to our design department. In addition, sign boards are used outdoors for long periods of time and must withstand sunlight, wind, and other harsh natural conditions.
Due to major changes in the natural environment, the probability of damage to signboards has increased. For our customers, it is necessary to guarantee the safety of their signboards, and we have created a system called "Signit" which provides IoT outdoor advertisement safety management service to cover this need. This system uses sensors and an IoT network to remotely and constantly monitor the condition of outdoor advertisements. Signit was recently recognized by the Mobile Computing Promotion Consortium and awarded the grand prize in the service solution category at the MCPC awards 2022. We intend to expand sales of this product for the safety of signboards in the future.
You have completed a number of projects overseas, including the Idemitsu petroleum garage in Vietnam where you did the fuel displays and the signage at Wattay International Airport in Laos. Most recently you have worked on the urban metro railway in Ho Chi Minh City in Vietnam. Which project internationally has been the most challenging for your firm and which are you most proud of?
In 2010, we opened a representative office in Hanoi, Vietnam, and began to build a system to cover all of Southeast Asia. Currently, CNA-HTE, which was initially a collaborator, has joined our group through M&A, and we have been able to establish a factory in Vietnam. In Vietnam, we are engaged in the same sign business as in Japan and also a greenscape business.
We are producing and installing signs for Hanoi International Airport, Idemitsu Q8 gas station, Takashimaya department store, and Ho Chi Minh City subway. Outside of Vietnam, we have produced and installed signs at Wat Thai International Airport in Laos, and for Honiara International Airport in Solomon Islands and Nadzab International Airport in Papua New Guinea, we have produced and exported signs.
The Greenscape Division is mainly engaged in the construction of gardens for residences.
Is this M&A with CNA-HTE a strategy that you wish to further pursue in new markets in Southeast Asia?
When we first entered Vietnam, we were thinking of the entire Southeast Asia region, linking Japan-Vietnam. However, COVID-19 forced us to put those plans on hold for the foreseeable future. In particular, we believe that movement restrictions will be unavoidable for the time being. Instead, we are trying to strengthen our online platform as a way to enhance our PR and marketing mechanisms.
It is part of our strategy to be able to better respond to requests that may come from, for example, American and European car companies. Traditionally, prior to COVID-19, we would have had to create a sales office in Europe in order to respond to such client requests. In the post-COVID-19 world, everything is digital and online. Therefore, we want to enhance our online presence and digital capacity to meet these requests from abroad.
The Southeast Asian market is famous for how quickly it is developing, but at the same time, the infrastructure is not able to keep pace. Countries such as Vietnam spend 6% of their GDP on infrastructure, yet their current requirements are still not being met. Are you interested in pursuing more public-private partnerships or official development assistance (ODA) based construction projects?
Yes, we are continuing to work through this ODA model, and they are based on them being monitored and managed by large-scale Japanese general construction companies, through which we have been able to develop trust and a certain level of reliability. These large-scale general construction companies call on us to participate.
Imagine that we come back on the very last day of your presidency and have this interview all over again. What would you like to say, and what are your goals and dreams for the future of Asahi Etic?
We believe it is our responsibility to strengthen our core business of "signage, store construction, electrical equipment, painting, and manufacturing." To do so, we promote the growth of our employees and as a company whose business is monozukuri of construction, equipment, and products, we value “trust in people” and “quality of products” as stated in our corporate philosophy.
We will promote the development of new products and IT with technology and intelligence, add value to our core business and continue to contribute to the industry with our monozukuri.
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