Nikken Lease has leveraged major investments, advanced safety-focused scaffolding systems, and digital planning tools to support Japan’s evolving construction landscape. With growing global demand, the company continues to expand its solutions for safer worksites, improved productivity, and greater operational efficiency.
Thank you very much for taking the time today. Could we begin with a brief self-introduction?
Certainly. Allow me to start by briefly introducing myself. What I’m about to share is also written on the back of my business card, where I list the qualifications I hold. At the top is the title of Small and Medium Enterprise Management Consultant, which is a national certification in business administration here in Japan. If you look at the pass rate noted there, you’ll see just how rigorous this exam is—especially for someone pursuing it while working full-time. The exam covers a broad spectrum of subjects, including economics, finance, marketing, and more.
My second qualification is that of a Social Insurance and Labor Consultant, which is also a national license. This too has a notoriously low pass rate, and it certifies me as a specialist in labor laws and social insurance systems—essentially someone deeply familiar with employment and social welfare frameworks.
In addition, I hold an MBA, as well as a somewhat unique master’s degree in Project Design from a Japanese graduate school. This particular degree focuses on entrepreneurship—on starting and building new businesses.
Thank you for that overview. Could you share some performance metrics or milestones during your time as president?
Of course. When I took over the company, our annual revenue was approximately 52.2 billion yen. As of our most recent fiscal year, we’ve grown to 100.9 billion yen. This year, we are projecting to close at around 104.5 billion yen, after accounting for final adjustments. Our fiscal year ends in September, and today is actually the last day of the period.
If you look at our revenue growth curve, you’ll see two indicators: a more gradual line showing our average growth rate, and a jagged line that reflects year-over-year comparisons.
That’s impressive growth. What were the key drivers behind it?
Earlier, I mentioned that I’m certified as a Small and Medium Enterprise Management Consultant. In that training, we learn that economic growth stems from a combination of capital and labor—this is fundamental economic theory. Applying this to our company, prior to my tenure as president, we were investing about 4 billion yen annually in rental equipment. After I became president, I raised that to 200 billion yen per year. Since then, we’ve cumulatively invested over 200 billion yen in capital expenditures.
That’s a bold investment strategy. What gave you the confidence to make such aggressive capital allocations?
People often refer to Japan’s “lost decade,” but in reality, it’s been 30 lost years. However, around the time I became president, we began to see early signs that Japan might finally be exiting its prolonged deflationary period. Simultaneously, many of the buildings in Tokyo—originally constructed around the time of the 1964 Olympics—were due for redevelopment. And then the 2020 Tokyo Olympics were announced, which created real, immediate demand on top of that latent need for reconstruction.
This resulted in a surge in urban redevelopment and infrastructure improvement projects, such as the enhancement of Tokyo’s expressway system. The last time major expressway construction took place was during the previous Olympics. This time, in preparation for the 2020 Games, existing routes were upgraded, extended, and in many areas, congestion was significantly reduced—something that’s a marked improvement over how things were in the past.
That certainly makes sense. How did you pair capital investment with organizational development?
As I mentioned earlier, economic growth is a function of both capital and labor. So, in parallel with increasing capital investment, we also expanded our workforce.
Here’s where I drew from my background in management theory. In the academic field, Alfred Chandler argued that “structure follows strategy,” while Igor Ansoff proposed that “strategy follows structure.” Regardless of which theory you subscribe to, the important thing is that structure and strategy are deeply interconnected.
Before I became president, Nikken Lease was primarily a rental company that simply purchased scaffolding from manufacturers and rented it out. Our headquarters only had minimal departments—procurement, HR, and accounting. But I realized this wasn’t enough to compete in a changing market.
So, I restructured the company. We segmented the market by the types of scaffolding used for different construction methods and created specialized business units for each type—steel-frame structures, formwork, finishing scaffolding, and so on. Previously, we had one large sales division that handled everything. Now, we have multiple divisions at HQ, each focused on a specific product and customer segment.
In doing so, it sounds like you moved from being a generalist to a highly specialized organization.
Exactly. We also began designing and manufacturing our own scaffolding systems, although we outsource actual production. The reason is simple: the conventional scaffolding products available on the market couldn’t meet the increasingly diverse and specialized needs of our clients. There are so many different construction types—from residential to bridges, high-rises, and interiors—each requiring different scaffolding configurations.
So, we created proprietary systems, such as the DARWIN scaffolding system. One of its key features is significantly faster setup and takedown compared to traditional systems. This is critical in Japan, where workers are generally smaller in stature than their Western counterparts. Importing large, heavy scaffolding from overseas isn’t practical here. Moreover, our designs emphasize safety above all.
Could you expand on the safety aspect? Especially in relation to overseas markets where safety standards may differ.
Japan has some of the world’s strictest safety regulations for construction, particularly scaffolding. Accidents still happen here, but they are far less frequent compared to many other countries.
The DARWIN system incorporates a pre-installed guardrail feature, meaning the handrail is placed from the level below before a worker even climbs up. So, when the worker arrives at the next level, the guardrail is already there—at waist height—virtually eliminating the risk of falling.
In many parts of Asia, unfortunately, labor is cheap and worker safety is often not prioritized. There are few protections or social insurance frameworks in place. For instance, in Vietnam, if a worker dies in a fall, the payout may be as low as 200,000 yen. In Japan, that figure is between 60 million and 100 million yen.
Furthermore, the high turnover rate of migrant laborers—say, Burmese workers in Thailand—makes safety even more difficult to enforce. In contrast, our systems are engineered for safety and designed to protect lives.
Have your scaffolding systems been adopted by local companies overseas, not just Japanese general contractors?
Yes, absolutely. In fact, in Vietnam, about 80% of our clients are local companies. Our products are superior in both design and safety compared to many regional alternatives. But more importantly, we also export know-how. We provide training and technical guidance on proper use and safe practices.
We’re also involved in working with local governments—for example, in Taiwan, we are collaborating with the Labor Bureau to help shape legal frameworks for construction site safety.
You’ve recently launched a BIM-based scaffolding planning system. How has that enhanced the value you provide to clients?
The construction industry is facing labor shortages, and many general contractors now lack the in-house expertise to design detailed scaffolding plans. This has led to growing demand for full-service scaffolding solutions, where specialists like us handle everything—from design to logistics.
Traditionally, clients would send us 2D plans via fax or email, but with BIM (Building Information Modeling), we can provide 3D visualizations accessible via web browsers. Clients can see the exact scaffolding layout from any angle, even without specialized software. This helps clients without technical knowledge to easily understand the plan.
Moreover, through our proprietary Nikken Connect platform, clients can not only view the scaffolding models online but also extract exact material quantities and submit orders directly. This eliminates the need for manual calculations and ensures accuracy, improving both productivity and safety.
You’ve shown remarkable innovation. Looking ahead, what are your goals before passing the baton to the next generation?
To answer that, let me touch on Japan’s broader economic context. After the remarkable post-war economic boom, Japan entered what we now call the “lost 30 years.” We are now cautiously emerging from that stagnation.
The construction industry is somewhat insulated because general contractors secure projects years in advance. Even if Japan’s economy were to slow down, the effects on construction would lag by about three years. From what I’ve heard, many contractors already have projects lined up through 2030.
However, Japan faces two demographic crises. The first is the 2025 issue, when the post-war baby boomers—Japan’s largest demographic—will all become late-stage elderly (75+). The second is the 2042 issue, when the baby boomers’ children—Japan’s second-largest generation—reach the same stage. If productivity does not increase, Japan’s GDP growth could stagnate entirely.
Our growth can no longer rely on population. It must come from productivity and capital investment. That’s why we’re investing in automation, digitization, and global expansion. Small rental companies can’t match our scale, particularly with the kind of capital-intensive innovations we’re developing.
Also, scaffolding is a reactive business—it depends on buildings being built. If construction halts, so does demand. That’s why we’re also diversifying into new ventures like logistics and elderly care.
One unique project I heard about is your work with live fish transportation. Could you elaborate?
Yes, we’ve developed a technology that allows us to transport live fish while keeping them asleep. This helps preserve freshness for sashimi and sushi. Conventional refrigerated transport often degrades quality due to water loss and cellular damage.
Our solution involves a special container—basically a modular tank—that can be mounted on any truck. This makes logistics much more flexible compared to specialized fish transport vehicles. We’ve even opened a small Italian restaurant that serves ultra-fresh seafood as a proof of concept.
That’s fascinating. Thank you for sharing so many insights—from economic theory to strategic diversification. Your perspective adds a great deal of depth to our coverage.
Thank you. It’s been a pleasure to share our journey. At the heart of everything we do—whether it’s construction, system innovation, or new business development—is the belief that strategy comes first. Tactics and execution follow. That’s the mindset I want to leave as my legacy.
For more information, please visit their website: https://www.nrg.co.jp/nikkenlease/global/
To read more about Nikken Lease Kogyo, check out this article about them.
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