Through well construction, geological survey work and advanced civil engineering technologies for disaster prevention, Nissaku is paving the way for universal access to clean water through its activities in Africa and Asia.
Japan’s construction boom started over 50 years ago, spurred by the 1964 Tokyo Olympics. Today, there is need for maintenance rather than new builds and at the same time, demographic trends such as an aging population and declining birth rate require new kinds of infrastructure. What is your take on the state of Japan's construction sector?
The future of construction in Japan is quite tough. Social issues such as a shrinking population, declining birth rate, and young people’s unwillingness to work in construction represent a predicament for this field. To overcome this predicament, two things need to happen. First, there needs to be a switch to automation: we can use machines in areas in which they can replace human labour. Some companies have started doing this, but more can be done. However, automation also raises concerns as to what extent workers should be replaced by machinery. There is always going to be work that cannot be replaced by machines. Therefore, how much education and technical training should the young incoming labour force be subjected to? This is one of the issues we are facing. We are trying to pass on the know-how acquired over many years to the younger generation in conjunction with new technologies.
The second thing that needs to change is our mindset or business approach. Some companies have problems attracting new workers; it is difficult to hire new employees since the value of young people is diversifying. These situations need to be eliminated. Companies need to create a safe and friendly working environment for people who want to join the construction sector. We want to attract more people to join this field.
The construction industry has been quite slow in adopting digital technologies, especially in Japan. Your company has developed tools such as MVP underwater 360-degree cameras and AI and IoT solutions. Can you tell us more about your approach to new technologies?
We are not limited to hiring people with educational backgrounds related to construction, such as civil engineering or geology, but employ personnel with different backgrounds. We are entering the world of automation and will hire people with knowledge in AI and IoT who can understand new technologies. It is no longer enough to just have one field of expertise, so we are trying to diversify our personnel. We are also interested in people who have a background in electronics, mechanics, and even economics. This provides an added value for the company. Traditionally, the construction field has mainly been staffed by men, but women are also increasingly being hired. We are also employing foreign workers from other Asian countries to compensate for Japan’s diminishing labour force.
SfM and LiDAR using UAV for 3D topographic analysis
As a water and geological engineering company, you are active in several areas. First, the well construction where you create source wells, geothermal wells, gas wells, and observational wells for earthquakes. Second, through your geological survey work you engage in underground mapping and consultation services. Third, you have advanced civil engineering specializing in disaster protection. Which division are you currently focused on?
All three divisions are closely related to our goal, which is to improve the lives of people in Japan and around the globe. As a corporate entity, we profit from drilling and creating wells, but we also want to contribute to society by fostering a work environment that benefits all those involved. Well maintenance is one of the business divisions we are focusing on. Some wells are already 20 to 30 years old and must be properly maintained to sustain a good underground water source. As a result, such work provides a higher quality of life for people who use the well. The same quality of service exists also in our company’s other divisions such as groundwater treatment construction, civil engineering works, and geological surveys. Making wells from scratch is a huge undertaking and drilling without careful planning can cause problems. Geological surveys must be conducted to evaluate ground conditions and ensure the quality and safety of water drawn for drinking or industrial purposes.
One tool for Japanese construction and consulting companies to reach developing countries that need better infrastructure is Official Development Assistance (ODA). Your clients include the Japan International Cooperation Agency (JICA), government departments, and embassies and you have conducted projects in Africa, South America, and the Middle East. Which areas are you currently focusing on?
Domestically, our business is split between 60 percent public and 40 percent private sector projects. Our client portfolio includes local municipalities and national institutions. Internationally, almost 100 percent of our projects are via ODA. Our projects used to be overwhelmingly funded through ODA, but we will grow and diversify our portfolio with a ratio of 70 to 30.
Currently, we are very active in Africa and all our projects there are ODA, financed by the Japan grant aid. In Africa, we are focusing on underground water supply facility construction, and anything related to this field. These are big projects that can amount to up to ¥1 billion each. Just one such project can account for up to 20 percent of our total annual sales so we would like to focus on undertaking these kinds of projects in Africa.
However, as good as the ODA projects are in terms sales, we still need to diversify because ODA projects are not always ordered constantly. Our company’s adaptable technologies and services for various ODA projects have been an advantage for us by allowing us to work on different projects. Our company philosophy is to contribute to society with a combination of traditional and cutting-edge technology. We would like to use our technologies to help areas where there is a difficulty in access to water.
You have patented some of your technologies, such as the Renewwell method which allows you to repair wells. In addition, your MVP camera system allows you to check the well’s condition before performing repairs. Could you talk to us about some of your technologies?
Drilling a well to draw water is not especially complicated if you have the proper tools to do it. However, you also need to know the proper techniques in well maintenance, which starts the moment you drill the hole. Well maintenance should not be thought of as an after-service, but the well should be built to be used and maintained for the next 50 years, at least. Well maintenance is quite tedious, but we have solutions to maintain wells for a long time, such as carbon dioxide injections.
We do not want to just drill a hole and draw water once. We want to build wells that can continuously draw groundwater and can keep groundwater for a long time. We want to keep the well from drying up or keep the water flowing into the well from aquifer. This requires maintenance. Some companies only offer to drill, but our company offers a package of drilling and maintenance. We have also introduced AI and IoT features in our maintenance programmes and these new technologies with the MVP camera are being used alongside traditional well maintenance components.
Villagers gathering at a new water supply facility (Zambia)
Given the limitations of ODA, what strategies are you implementing to diversify your portfolio?
There are three types of ODA. One is the grant type, which is financial cooperation with developing countries with no obligation for repayment, then there is technical support which also does not require repayment, and the third is loan aid. Our company has only participated in grant type ODA projects, which are contributing our sales as well as company’s reputation. For example, our ODA project completed in Senegal won “2nd Japan Construction International Award (Construction Project Category)” from the Japanese Ministry of Land, Infrastructure, Transport and Tourism. However, there is no guarantee that the next possible ODA projects are going to be granted in good time for us. This is what we would like to change.
We started activities in Vietnam for diversification. Vietnam was a good expansion for us because we support local students by recruiting and training them, and then having them work for Nissaku in Japan for five years, so they can then return to Vietnam with the expertise gained through working at our company. At the same time, this scheme provides a temporary solution for the labour shortage issue.
Nepal has also been a success story. We started by sharing our drilling expertise and currently, there are about 40 of our staff working there, 30 of which have an engineering background. We went to Nepal via ODA to drill wells but when the local Nepalese stuff learned about our technology and we realized that they had sufficient skills, we decided to establish our own subsidiary company there. Nissaku owns 100 percent of the company in Nepal and all the workers are Nepalese. The drilling technology adopted there is also entirely owned by Nissaku. The technology is difficult to maintain and must be compensated for with new technologies, so our Nepalese engineers regularly come to Japan for training. We refer to this training as a technical internship operated by the government of Japan, with the aim of educating the trainees to learn the company’s new technologies.
What role does co-creation play in your company? Are you currently looking for foreign partners?
We work in a very small and specialised field, so all the different players know each other. We feel it is necessary to partner up with others when it comes to projects that are beyond our capabilities. Especially when it comes to entering foreign markets, working with local partners is the way to go.
What are your goals for the company over the next five years?
We want to work on different types of ODA projects, including non-governmental ones. Over the last 40 years our overseas projects have primarily been related to governmental ODA so we would like to expand our participation in corporate and business projects as well. We are looking to expand in South America and Asia due to high demand in these markets for our well drilling services and underground water expertise.
We want to contribute to local societies by providing clean drinking water in areas where it is scarce. We carry a great social responsibility. The Earth is facing a climate crisis, which will likely become worse in the years to come, and access to clean water is vital. In many areas of the world, women and children fetch water from rivers and lakes without sanitary measures in place to ensure the water is clean and safe. Our company aims to help with this issue and raise quality of life in these areas by providing clean water.
Doing business is good but we also try to look beyond and fulfil our social responsibilities. These days, many young people are focused on earning money, but we want to encourage them to join our company and adopt our credo of achieving a sense of self-fulfilment as we pursue excellence in the field of underground water and well drilling to solve social issues. This goes hand in hand with the Sustainable Development Goals and transition towards a carbon neutral society.
When it comes to prioritising, we can refer to the Japanese characters for “down”, “middle”, and “up”. Down is equivalent to money and profit, which are not the most important thing. In the middle is sustaining the business. And up at the top is social and human capital, which is the most valuable asset for any company, including to fulfil its responsibility in society.