Resolved to cater to the growing need for prefabricated concrete solutions, Nippon Concrete Industries has become the go-to specialist and a partner for Japan’s premier new linear shinkansen construction
Japan's first construction boom occurred before the 1964 Olympics. Since then, we've seen a lot of infrastructure age, and there have been issues such as tree roots penetrating piping and sewage systems. Many buildings have been built to less stringent standards and require retrofitting with anti-seismic technologies. As a concrete specialist with almost 75 years of experience in the industry, what do you see as the key technologies and needs for Japan's current construction industry?
It is true, as you say, that Japan’s buildings and infrastructure are aging, but the trend is not to build new infrastructure, but rather focus on the rehabilitation or the mending of existing infrastructure. Japan is vulnerable to earthquakes, and compared to other countries, it has advanced anti-seismic measures.
Japanese standards and regulations on anti-seismic standards have also been elevated over the years. There would be a growing number of projects on not new builds of infrastructure or buildings, but rather the maintenance and the rehabilitation of the existing infrastructure to elongate its longevity. We have accumulated technology and products catering to anti-seismic and the rehabilitation of aging infrastructure, so we are actively pursuing these projects.
Japan, as an island nation, is well known for its susceptibility to natural disasters. Honshu, the main island, is located at the intersection of three tectonic plates, and as such, frequent earthquakes occur. Japanese companies are developing technologies that are preventing this. Your company’s focus is on concrete and slope reinforcement as well as RC lining segments for the linear Shinkansen project that's being built currently. When it comes to concrete, what specific technologies are you integrating to ensure longevity and stability, even during seismic activities?
As for the linear Shinkansen project, the design is done by a design company. We receive the anti-seismic specifications and accordingly provide materials that are high quality and adhere to their request. We match their specifications on the strength and the surface finish, and we provide the highest quality products.
When it comes to your business, labor is a significant issue. Japan has the oldest population in the world, and more than 28% of people are over 65 years old. With a fertility rate of 1.37, it's expected that Japan's population will drop below 100 million people by mid-century. For firms, this creates a dilemma, as there are fewer business opportunities with new projects and a labor shortage. One in four construction workers is over the age of 65. As a company specializing in concrete solutions, to what extent must Japanese firms look overseas for new business opportunities, and in terms of labor, what are you doing to ensure long-term business success?
To establish a robust business, it's crucial to expand both domestically and overseas while being flexible and open to new opportunities. This new business may not be related to our current field, so being open to new possibilities is important.
Creating a comfortable work environment for the younger generation that's raising children is also crucial. Hiring women who have children is considered a downtime cost for the company, but we need to change our mindset and see it as an investment towards a sustainable company. We need to create an environment where women can come back after giving birth and feel comfortable working and pursuing their careers along with raising their children.
As for the shrinking labor force, it is crucial to rely on the foreign workforce in our factory. We are currently hiring overseas technical trainees, but I strongly believe that we should not consider them a one-off labor source. Instead, we should provide them with the long-term technology that Japanese companies have accumulated.
We are actively recruiting a foreign workforce to experience and learn Japanese technologies on construction and production sites and providing an opportunity to take them back to their countries to contribute to the construction of local infrastructure. This is the ultimate happiness that I would have.
You spoke earlier about being flexible and responsive to new market needs. Can you give us an insight into which new business opportunities you foresee as part of your mid-term? You're a specialist in precast concrete, so obviously you can make a series of different solutions, depending on the needs of your clients. Which new opportunities do you see for your business in the mid-term?
Firstly, we want to focus on expanding our current business by adding new solutions, such as for the concrete pole business, where we want to supply them. For the concrete pole business, we not only provide the product but also plan the purpose and usage to provide the most appropriate product.
The main ingredient of concrete is limestone, and there are 43 million tons of concrete produced here in Japan annually. And as you know, 34 million tons of CO2 is immobilized in that concrete. Now if we talk about annual emissions, that accounts for 7% of all CO2 here in Japan, including the supply chain that runs into double digits. We've met companies, like Aizawa in Hokkaido, who spoke to us about being a material revolutionary-based company, where they're looking to contribute to the decarbonization economy. We know you've produced several products like Padecs and Asticon calcium carbonate solutions using concrete-based sludge. Can you tell us about those products, and how they're contributing to CCU (carbon dioxide capture and utilization) based technology in reducing carbon emissions?
As for the environmental aspect of our business, we have had success in manufacturing environmental products by recreating new products out of the concrete sludge residue that was previously discarded as industrial waste. Through research and development, we were able to manufacture a new product from this waste, reducing a lot of treatment costs in the process, and even earning income from our new product.
We have three main environmental products: Padecs, an environmental cleansing agent used for cleaning water. By changing an amount of Padecs to be injected, you can vary the level of cleansing. The second product is Asticon, which absorbs harmful substances like lead and arsenic from soil and helps in waste treatment. We can use Padecs and Asticon in areas that are polluted to cleanse those environments.
The third product is ‘Eco Tankaru’, which is calcium carbonate produced by combining concrete sludge and CO2 emitted by the boiler. We can produce very high purity ‘Eco Tankaru’, or calcium carbonate, and there are many applications of the product, and we are collaborating with many universities and companies to find ways to further develop and utilize the product.
Our product stabilizes CO2 exhausted on a process of manufacturing concrete products, providing an environmentally friendly product. By providing environmentally friendly products, the company is contributing to the overall environmental approach of the construction industry, but I believe it’s also very important to reduce the amount of concrete used on construction sites to further reduce the environmental burden. Reducing concrete volume is a different approach of contribution to reducing the amount of CO2 in the production process of concrete piles.
If we can introduce our piling method based on our piling design, then the total volume of concrete for the piles can be reduced compared to the piling methods which are now still standard (eg. pure driving by hammer) in South East Asia or other developing countries.
Of course, such piling could be more expensive than the current piling method, however, total piling construction fee can be possibly less cheap by reducing certain amounts of concrete materials.
As part of your foundation's business, you have developed a product called Green-ONA, which is a concrete pile that reduces CO2 by 40%. As you're looking to win more large-scale construction-based projects, can you tell us why you believe this is the solution your clients should take up, and is it cost-competitive in Southeast Asia, for example?
Green-ONA actually uses Eco Tankaru in its production, so it stabilizes the CO2 within the product. Once global awareness towards more environmentally friendly products increases, creating more demand, the cost will be reduced but currently, it’s still more expensive than the current products that we have, so we are still waiting for the global trend to catch up.
You're going to be celebrating your 75th anniversary this year, as a concrete specialist. Could you highlight some of the milestones in your history - important technical milestones - as you celebrate your 75th anniversary?
Our company has been producing precast concrete products and has supported the expansion of electricity poles, and we want to replace timber poles in developing countries, where the risk of fire and environmental degradation is high.
Japan used timber electricity poles until the 1950s. However, if we kept using wooden poles it would have required so much wood that it would have destroyed the natural environment. Our company philosophy is to contribute in creating assured, safe, and affluent society through our products. Based on that philosophy, we have developed and can provide concrete poles.
You have also collaborated with other companies in the Green Innovation Fund, a consortium of 55 companies including large ones like Takenaka, Denka, and Kajima. Can you tell us a little bit more about that fund and your contribution to it, moving forward, are you looking for partnerships with foreign-based companies to expand your technologies?
Regarding NEDO’s (New Energy and Industrial Technology Development Organization) Innovation project, as you mentioned, it is led by Kajima, Denka, Takenaka, and other companies, to reduce overall CO2 emissions. Our company is providing the Eco Tankaru product and technology, and collaborating with other companies to jointly produce new approaches or products that reduce CO2.
We aim to spread and utilize our existing and new technologies together with any other companies, so if any overseas companies are interested in our products, we are happy to collaborate.
We know that since 2015, you've had operations in Myanmar, and you continue to do so despite the turbulent political situation there. You're also present in Thailand since 2017 and Indonesia. Could you provide more information about your current operations in those countries and which countries do you plan to target for further international growth in the midterm?
The reason for our establishment of the Myanmar factory was to increase the electricity penetration level in the locality, allowing locals to manufacture electricity poles for themselves. Despite the political unrest, we are continuing operations there, although the number of employees has decreased.
Once the political situation settles, we believe that this factory will be a driving force in pushing the electricity penetration rate forward. Our overseas strategy has always been based on joint ventures, where we work together with local companies to learn about the demand and let them do sales in their way, while we take care of the technologies. We will continue to do it that way.
New locations will be in areas that require new infrastructure and have a growing market. Affiliation with the Japanese is important, but finding the right partner and creating a trusted relationship is necessary for establishing our company in a new country.
This year is a very exciting year for your company, as you are celebrating your 75th anniversary. Let's imagine we come back five years from now for your 80th anniversary and have this interview again. What would you tell us? What is your dream for this company, and what goals would you like to accomplish by then?
First and foremost, we have many unique technologies, and I want to expand these technologies to the world and find new applications. Providing a comfortable working environment and job security for our employees is also important. In this rapidly changing society, we have to be flexible enough to respond and provide adequate solutions.
Interview conducted by Paul Mannion & Sasha Lauture