Abe Nikko Kogyo’s unique technology, built to withstand Japan’s frequent earthquakes, enables the company to create fuel, water and sewage tanks that can stand up in the harshest environments. In this interview, president Tetsuro Ideguchi gives his insight into the infrastructure landscape in Japan and across the globe, explains what underpins the superior properties and performance of ANK’s tanks, and also discusses some of the company’s important projects around the world.
Japan’s infrastructure boom occurred more than 30 years ago. Nowadays, many construction projects are ageing. Furthermore, Japan also needs to address certain social issues related to its ageing population, which will require new social infrastructure. Looking at the future, what major infrastructural changes do you expect Japan to undergo? And what is your analysis of the domestic construction and civil engineering sector?
Numerous construction, civil engineering and building projects were underway in preparation for the Tokyo 2020 Olympic Games scheduled for last year. Preparing metropolitan infrastructure for the 2020 Olympics has triggered a wave of both private and public investment, injecting a great deal of liquidity into the construction and civil engineering markets. Tokyo's infrastructure preparation for the 2020 Olympics has triggered a wave of both private and public investment, injecting massive liquidity into the construction and civil engineering markets.
Shortly after Japan announced that it had won the bid to host the 2020 Olympics, construction industry leaders and observers rejoiced, predicting that the market would experience a wave of growth. Despite the promise of new civil projects in the short term, industry leaders had a common understanding that the market would decline again after the Games were over. Especially when it comes to civil engineering projects.
In contrast to the civil engineering market, the construction and building sector is sustained by long-term developments. As Japan’s population continues to age and as its demographic line pursues its decline, people living in rural regions are gradually moving to the cities. As such, the population of metropolitan areas is expected to grow in the decades to come. With Japan becoming increasingly urbanized, the population density of large cities, such as Tokyo and Osaka, will undoubtedly increase. To accommodate for this greater density of people, the construction of vertical buildings, such as skyscrapers, and the redevelopment of housing facilities, such as condominiums, is poised to grow.
Despite the signs presented by these macroeconomic trends, the construction sector can be difficult to predict; the decision to postpone the 2020 Olympic Games and the ongoing COVID-19 pandemic have brought about significant changes in the market for construction. One of the obvious reasons for this is revenue streams. In Japan, the construction building sector is dependent on private investment, and it is difficult to predict how private organizations will respond in the event of a major disruption.
Civil engineering projects enjoy greater stability compared to the construction and building sectors, which are more dependent on private investors and therefore more unpredictable in times of turmoil. Civil works, such as soil and land development, along with other public sector initiatives, are considered necessary for the livelihood of citizens. As such, this market is known for its stability and reliability.
Japan's construction boom peaked in 1964 when the country hosted the last Tokyo Olympics, but now the country is experiencing an economic boom. Today, these aging structures and civil engineering projects now require maintenance, repair, and redevelopment. This is a great opportunity for companies like us.
For example, Japan is currently renewing one of its major highways, which includes over 12,000 kilometers of roads, bridges, and viaducts. It has also started a project to convert about a quarter of its roads, or about 3,000 kilometers, from two-lane to four-lane roads. In the case of natural disasters such as earthquakes and floods, larger highways are more suitable than smaller ones, and four-lane roads allow for the efficient movement of special vehicles such as ambulances and fire trucks as emergency roads. Recognizing these advantages, the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) commissioned this large-scale project.
Another example of a large-scale civil engineering project is the building of a linear bullet train. This new linear motor car will greatly shorten the travel time from Tokyo to Osaka, causing new construction needs.
In the midst of new construction demands of urbanization along with the maintenance and redevelopment of aging civil engineering structures, we believe that our domestic business continues to show a strong foundation.
With its rugged mountains and its volcanic zones, only 33% of Japan’s land mass is considered inhabitable. Furthermore, Japan’s main island, Honshu, lies at the intersection between three tectonic plates, which subjects the country to frequent earthquakes. Because of this complex topography, Japan is considered an infrastructure miracle, and Japanese corporations have been forced to develop cutting-edge disaster prevention technologies. For example, by utilizing its expertise in prestressed concrete (PC), Abe Nikko Kogyo has developed “tsunami proof fuel tanks.” Can you tell us more about this technology?
PC concrete technology has been used in infrastructure structures and construction for over 60 years, thanks to its solid physical properties. To explain the function of PC concrete: When concrete is bent or stretched, cracking occurs in the concrete. When this happens, the concrete becomes vulnerable to cracking. To avoid cracks and other defects, concrete is subjected to compressive forces or "pre-stressing" during manufacture in a way that strengthens its resistance to tensile forces. This compressive force is created by the force of the tension (pull) of the high strength "tendons" in the concrete trying to return. These "tendons" often consist of steel wires that are inserted into sheath (tube) tubes placed in the concrete and then pulled. Compressive forces are applied to the concrete during manufacture to prevent it from cracking when pulled, bent, or subjected to large loads.
The best example to understand the importance of concrete is to consider a water tank. When a tank is filled with a metric ton of water, the walls of the tank begin to expand under the pressure of the water. Therefore, the larger the tank, the greater the water pressure it has to withstand. Now, what do you think will happen to the walls of the tank if the pressure is too great? The tank will crack and water will leak out. To avoid such a catastrophe, tank manufacturers need to calculate the pressure the tank will be subjected to. Once they understand the numbers, they apply compressive forces to the concrete walls in advance until they are robust enough to withstand the expected pressure. However, in the event of an earthquake, the tank will need to withstand an even higher level of pressure. During an earthquake, the ground will shake and the water contained in the tank will move. As the water splashes around, more heavy pressure is placed on some of the walls of the tank. To ensure that our structures can withstand this extra pressure, we perform a prestressing (pre-compressive force) process to simulate extreme situations. This ensures that the structure will not move, shake, or crack in the event of a natural disaster.
The same method is applied to the manufacturing of PC products for road and rail bridges. In the event of an earthquake, a normal reinforced concrete bridge will definitely crack and lose its shape. In comparison, PC structures can withstand high pressure before bending. Even after bending, our PC technology guarantees that the product will return to its original shape.
Abe Nittetsu Kogyo has participated in a series of projects internationally. For example, you have manufactured PC tanks in Sri Lanka, Jordan, and Egypt. These locations have very different climates, ranging from very humid to very dry, which can have undesirable effects on the PC structure. How do you adapt the PC structure to these different climates?
Thanks to our various achievements abroad, we have developed, in cooperation with prime constructors, technologies to adapt to different environments. In dry and hot places like Egypt, we placed ice water against the PC components when transporting and installing the structure. We also chose the best time of day to start the concrete work. In hot climates, our team often performs the pouring and mixing process late at night when temperatures are cooler. We also designed a special cooling room to store the PC materials.
To anticipate environmental conditions, we utilize advanced computer systems to calibrate all the component involved in PC construction. By inputting a series of data point, we are able to visualize the elements’, the stones’ and the cements’ required characteristics; and we are also able to predict the effects that varying temperatures could have on each component.
On top of our oversea projects, our domestic track-record and experience allowed us to grow accustomed to varying climates and topographies. In Japan, we have built structures in the frozen lands of Hokkaido and in the tropical climates of Okinawa. These experiences proved a great advantage when exporting our expertise abroad.
Abe Nikko Kogyo has conducted a joint project with Gifu University to develop a “next generation concrete.” This innovative product combines gel-like nanosheets with traditional concrete mixture materials, thereby increasing fluidity without having to change the concretes mixture itself. What advantages does this next-gen concrete offer? And how does it fit within your R&D strategy?
Unfortunately, the creation of new concrete material is a complex and intricate task. Our co-development project with Gifu University stemmed from the unexpected encounter between one of our staff and a chemistry professor. One day, a professor at Gifu University was giving a presentation about the future utilization of gel-like nanosheets. One of our staff happened to be there, and as he listened to the professor, he thought: “Hey, maybe we can use this kind of technology in concrete!” And that is how the partnership and tie-up was born. As such, our R&D strategy is not solely based on identifying a clear goal and pursuing it, but rather on keeping an open, curious and proactive mindset that welcomes new and unforeseen ideas.
Throughout our history, we have undertaken numerous research and development projects, many of which have resulted in the development of unique products. For example, the air dome method for tanks was born out of our R&D efforts. Instead of using the traditional dome method, we developed a unique technology called "Air Membrane Shape Engineering". With this innovative method, we used air membranes to shape the roof of the dome from the bottom up.
This technique has a series of added values. By using air to seamlessly shape the roof, it eliminates the need for scaffolding, pipes, and other construction equipment traditionally used in roof construction, reducing delivery time and cost.
When we utilized this method in Sri Lanka, our local engineers and partners were both surprised and excited about this innovative technique. While our “air membrane method” proved to be a success in terms of delivery and reliability, we have not been able to scale it further. The reason being that in Sri Lanka, we face stiff price competition from our Chinese counterparts; and it is difficult for us to compete on cost. However, it is interesting to note that while the nation's leaders continually prioritize cheaper prices, frontline workers, the ones present at the actual construction site, clearly prefer our technology and execution.
We have heard from our local partners certain unpleasant stories, such as Chinese contractors stopping their construction project as soon as the funding capital ran out, leaving the project half-completed. We often get queries from local companies asking us to complete a half-finished project; asking us to help them solve a real logistic mess.
In contrast to their Chinese counterparts, Japanese corporations believe it is their duty to complete and honor their assigned projects. Even if funding does not cover unexpected occurrences, we will continue and execute the project to the very end. In some cases, this actually turns out to be bad business for us, as our profit margins are squeezed. However, we believe reliability and dedication to be both a duty and a key differentiator against our Chinese counterparts.
Abe Nikko Kogyo has completed 25 overseas projects in countries such as Egypt, Bangladesh and Liberia. What other international markets are you looking to expand to?
One of the advantages that Abe Nikko Kogyo brings to international markets is its specialized technology, especially its PC concrete for tanks. Domestically, the majority of our peers are involved in the production of PC concrete for bridges, and only 10% of our peers are engaged in tank construction. As such, our overseas expansion will be centered around the construction of tanks, a sub-sector in which we possess unique technology and a long track-record.
While we also aim to provide our technology for the construction of bridges, our priority is to expand our tank-related business. With the support of JICA (Japan International Cooperation Agency), we built Sri Lanka’s first ever water tank, and to a large extent, our technology became a national standard there.
We are currently conducting a series of activities in Sri Lanka and would like to upgrade from Liaison office to Branch office in order to expand our activities in PC tanks. In the Nagoya area, we have established a strong partner network with companies involved in water related supply and storage systems. In the future, we would like to utilize the various strengths of this partnership to expand our services internationally.
Looking ahead, our aim is to expand our business beyond Sri Lanka and cater for a variety of Asian markets. With the support of our partners, including JICA and local governments, and our track-record in Sri Lanka and Japan, we hope to take on new challenges and new markets.
Furthermore, in my personal opinion, I believe that our international expansion is supported by ethical and social factors. Under the 17 goals of the SDGs (Sustainable Development Goals), goal 6 is to ensure that every country has safe water and toilets. In order to achieve this goal, it is important for developing countries to have adequate and reliable sewage treatment systems. We have developed and deployed our own unique sewage treatment system technology in Japan. This method is called "POD", which stands for "Prefabricated Oxidation Ditch". Under this process, all the components needed to build a complete tank are fabricated at the factory, and then production is transferred to the site, where it is assembled. In Japan, we have completed such projects in over 260 locations.
One of the advantages of this technology is that it can be used to build small-scale tanks and sewage treatment systems. This allows us to target rural areas with populations of 500 to 2,000. In many countries, rural villages are far away from large cities and are difficult to access. Thus, our technology can provide an effective solution not only for supplying adequate water to remote areas, but also for treating sewage. Again, thanks to the unique topography of Japan, we were able to develop this technology. Since 75% of Japan's land area consists of mountainous regions, our country is dominated by small villages located far from each other. Therefore, we needed to find a solution to this geographical hurdle. Looking to the future, we aim to export this technology to remote areas that require small-scale sewage treatment and sludge digestion tanks.
What project, domestic or international, are you most proud of?
The achievement we are most proud of is the variety of technologies we have developed for our tanks. Our tanks perform a variety of functions, from storing clean drinking water and treating sewage waste to agricultural and industrial applications. This diversity of applications is a source of great pride, along with the tank's disaster prevention application technology and superior functionality.
Even though the market for tanks, and especially water-tanks, has already matured and peaked in Japan, the demand for clean water tanks keeps on increasing in Asian market; which allowed us to contribute to the development of Sri Lanka, Bhutan and Bangladesh. At Abe Nikko Kogyo, we strongly believe that providing safe water to the world is our most important mission.
As the world continues to reduce its carbon footprint, the demand for ammonia, an alternative fuel that does not emit CO2, is increasing. In fact, we have so far contributed our expertise to the construction of two ammonia storage tank facilities currently located in Taiwan.
What objectives would you like to achieve during your tenure as the President of Abe Nikko Kogyo?
Our corporate philosophy is based on developing employees who will work for the prosperity of Japan and contribute to the global community.
In order to achieve this goal, we need to develop dedicated human resources and high corporate performance. To achieve our goals, we need to achieve both of these elements; we will not be satisfied with the achievement of only one of them. Therefore, I believe that the entire company, from the president to the workers, needs to work together to create a pleasant, committed group.
In this way, my goal is to create a company that is easy to work for and full of charm. Together with all of our stakeholders, I want all of our employees to be happy and proud to be able to work with Abe Nittoku Kogyo. I also hope that they will be proud to be a part of a company with unique technology and know-how.