As both a trading company and a manufacturer of construction materials, Okasan Livic is heavily involved in Japan’s infrastructure development, with a focus on public works projects. The typical solutions the company offers include corrugated pipes, liner plates and the multi-anchor reinforced soil wall method, among others.
As both a trading company and a manufacturer of construction materials, could you please share with us your analysis of the Japanese construction sector and how you foresee its evolution in the years to come?
As a trading company, we propose construction methods as solutions and sell construction materials to general contractors. We must be involved in infrastructure development and concentrate on upcoming public works projects.
Before the previous Tokyo Olympics in 1964, Japan had completed a lot of infrastructure work, including the Shinkansen and Tomei Highway that connects Tokyo, Nagoya and Osaka, in addition to the metropolitan highway, which is a toll road in Tokyo.
Since then, a lot of infrastructure has aged, and we also must think about what it looks like. At the moment, there are a lot of public facilities that are not visually appealing, but there are projects that will amend this. For example, our Metropolitan Expressway runs directly above Nihonbashi, the starting point of National Highway No. 1, and there are plans to develop the expressway as an underground route to improve the traditional landscape of Nihonbashi.
There needs to be both maintenance for old facilities and new construction projects among these projects. With regard to Shinagawa, the location of our head office, the train station will be overhauled for the new Maglev Shinkansen, and it will be the starting point. As a result, we expect there will be projects in the Shinagawa area for the next 10-20 years. We supply a lot of the technology needed by the general contractors involved.
In addition to that, the Japanese government is undertaking a large project preventing natural disasters, allocating a budget of 15 trillion yen over the course of 5 years, and it will reinforce existing infrastructure to prevent damage from natural disasters. We have a lot of old structures, like roads, and we need to maintain rivers and dams too. Our company is trying to supply good techniques and materials for this, including water and sewer pipes, and bridge reinforcement/restoration.
More than one third of the Japanese population is over sixty-five, which means a reduced labor force and less demand for products in general. How has this declining demographic affected your company and how are you reacting to this particular challenge?
On any construction site, there are a lot of highly skilled and experienced workers, like on-site steelworkers who are specialized in creating a framework for the reinforced concrete. There are different methods and technologies available to do the job, but we are trying to simplify them. For example, in the concrete works, we use a lot of precast methods so that experienced workers are not really needed, and we have many methods and technologies for this purpose.
We are also trying to provide methods that enhance productivity; for example, if you have fewer people, the work will take longer. It may take double the time, but to shorten that duration, you must increase productivity. “EDO-EPS” is a method that uses very light foam material - if the required bearing capacity is not available, it will take time to construct, such as the need to improve the foundation ground for embankment - but by using lighter material, you can shorten the duration of the construction work without the ground improvement.
There is also technology for climate change. Due to the high frequency of rain in a short period of time, we offer groundwater tanks - “Geo pool” - made of recycled plastic. In large-scale developments, structures for storing rainwater are put underground, and we use them instead of concrete for speedy construction and also for ecological reasons.
How do you ensure that your products and your techniques function the same in different operational environments across different countries?
There is a reinforced wall construction method which is a technology that came from France, but that was developed for sandy soil. However, the “Multi-Anchored Reinforced soil Wall'' was developed in Japan for Japanese soil. What is important is how we face and deal with challenges.
When it comes to ODAs (development grants) in the future, do you plan to keep pursuing them in the same capacity, or are you trying to diversify the kind of contracts or projects that you apply your expertise to internationally?
We do not get involved in ODA’s directly. That is for general contractors, and we provide the materials or solutions to them. Now, a lot of Japanese companies and contractors are trying to proceed with ODA projects for new infrastructure, such as railway systems. What we do is provide products and solutions to enhance productivity or increase the durability of the infrastructure, and we provide that technology to the contractor.
We were involved in large-scale projects in Pakistan and Nepal, and we are currently providing products for the reinforced soil wall method, “RRR”, for a railway project in the Philippines, but it is usually the general contractor who works on those big projects. We are the company that provides the products and the construction methods as a solution to them. We also help domestic workers complete the project with our construction guidance if required.
You’ve created several proprietary techniques and items with your R&D department. Could you tell us more about the current focus of your R&D strategy?
Japanese public works are now focusing on national resilience and maintenance, in addition to carbon neutrality and regenerative energy. I think there will be a lot of changes in the infrastructure to align with these requirements and we will try to provide new methods to accommodate that. For example, if we are talking about wind farms, we try to minimize the size of the farm so that you can build them in different places.
Regenerative energy is something that the national government is focusing on. They are also looking into how to make existing public facilities and infrastructure more durable. As you know, Japan is a disaster-prone country; there are lots of earthquakes and typhoons. There could be a volcanic eruption any day, but we can't prevent that. It's impossible to stop, but at least you can try to mitigate the damage. We have these clear objectives.
Could you tell us more about your technologies and the techniques that you are developing for the sake of natural disaster protection?
The intensity of heavy rain is increasing due to climate change. Soil structures and natural slopes can become fragile and collapse if they contain rainwater. The "Drainage reinforcing pipe" was developed for soil structures and natural slopes and it has been applied to keep stability of road and railway embankments.
With current civil engineering technology, you can't restore what is partially broken. That's impossible, but there is a product that we supply called "Skeleton", which reinforces the surface of concrete. Sometimes when a concrete structure gets older, you have fragments falling off, and this "Skeleton" is used to prevent that happening. It's transparent and it covers the surface so that the condition of the concrete surface can be seen.
We also have one more original technology called "RCG Innerseal"; a reinforcing liquid that goes over a concrete surface. It is colored when spraying to avoid paint failure and becomes transparent when dried for easier visual confirmation of the condition.
Looking back on the history of Okasan Livic, we have been in this field for fifty years and we are providing materials for civil engineering construction. We started with the "Corrugated Pipe", and then the second product was the "Liner plate", which retains the soil surface when digging underneath the ground. After that, we developed many products and introduced technologies from overseas.
What we do is we have many offices all over Japan, and we have sales staff who don’t just stay in their office, but go out to construction sites, and then they look carefully at the site to understand and suggest the user's needs. If there's any request from the general contractor, we try to find a suitable method, technology or manufacturer, and those same staff are the ones who implement our technology and products to the construction site.
However, we cannot provide the technology just by ourselves; we need the cooperation of university professors who do the research with us. Sometimes we send our staff to the Public Works Research Institute where they can learn from them. Our staff can also develop new technologies and then bring back that expertise to use on construction sites, promoting new solutions to general contractors.
What role does collaboration or co-creation play in your business model and are you currently looking for partners either in Japan or overseas?
If you're talking about involvement in international projects, the one in Vietnam is a priority for us. We opened a local company there and we are collaborating with the University of Transport and communications.
Currently, we are trying to get a certificate for the technology and the quality of our product is undergoing evaluation. We’d like to get the EPS block evaluated so that we can utilize that in Vietnam. An EDO-EPS business in Vietnam would be probably our first step to be successful in a foreign country.
Are there any particular markets or regions that you consider key as part of your international business and in those regions what kind of strategy will you employ? Could please elaborate for us a little bit about your international business strategy?
We have proven that we can introduce excellent overseas civil engineering products and technologies to the Japanese market. Unfortunately, we do not currently have any established business models for the international market and as I mentioned, we have a company established in Vietnam, our only overseas office. We believe that our experience in Vietnam will be a stepping stone for our overseas business development.
In this field, it is very difficult to sell products, technology or methods directly, so if you would like to expand, you need to have knowledge of the market and have the connections. We can probably leverage this Vietnamese firm and then we can expand the EDO-EPS light weight material business for the softer grounds of the Mekong Delta.
Let's say we come back to interview you again in a few years' time. What would you like to tell us about your goals and dreams for the company in that timeframe, and what would you like to have achieved by then?
I want Okasan Livic to continue to be actively involved in the construction business five years from now, just as did in the last 50 years. Our company has a very high employee retention rate, and most of us joined the company after graduating from university. Our employees still have the expertise, but by reviewing what has been taken for granted, eliminating waste, and evolving our mindset, we will continue to grow over the next five years. Of course, I think it will be a period to lay a solid foundation for achieving even higher goals.
Japan has many issues, such as national resilience for disaster prevention and mitigation, urban compactification (Compact City) concepts, climate change measures, expansion of regenerative energy, etc. We will support these and aim to be a company that is loved and trusted as a group of producers with abundant creativity who knows the construction site more than anyone else and will strive to realize a safe and secure society.
This company has overcome a lot of challenges since its establishment. We’ve made partnerships and we’ve acquired a lot of technologies from overseas too. Even after five years, we will continue to be involved in the infrastructure of everyone's lives in the same way.