Sunday, Jun 23, 2024
Update At 14:00    USD/EUR 0,00  ↑+0        USD/JPY 0,00  ↑+0        USD/KRW 0,00  ↑+0        EUR/JPY 0,00  ↑+0        Crude Oil 0,00  ↑+0        Asia Dow 0,00  ↑+0        TSE 0,00  ↑+0        Japan: Nikkei 225 0,00  ↑+0        S. Korea: KOSPI 0,00  ↑+0        China: Shanghai Composite 0,00  ↑+0        Hong Kong: Hang Seng 0,00  ↑+0        Singapore: Straits Times 0,00  ↑+0        DJIA 0,00  ↑+0        Nasdaq Composite 0,00  ↑+0        S&P 500 0,00  ↑+0        Russell 2000 0,00  ↑+0        Stoxx Euro 50 0,00  ↑+0        Stoxx Europe 600 0,00  ↑+0        Germany: DAX 0,00  ↑+0        UK: FTSE 100 0,00  ↑+0        Spain: IBEX 35 0,00  ↑+0        France: CAC 40 0,00  ↑+0        

Seismic Risk Management in Japan

Interview - April 26, 2024

Amid Japan's aging infrastructure, seismic risks, and population decline, the construction industry faces a pivotal moment. From seismic retrofitting to urban redevelopment, the sector grapples with diverse challenges, while also embracing digitalization and global expansion. 


Japan’s construction boom occurred more than 50 years ago. Many of those projects are now aging and require maintenance such as water and sewage piping where there are cracks or buildings which do not meet the standards of safety regarding anti-seismic technology for example. While we are seeing new builds in cities such as Tokyo and Osaka that are continuing to grow, this is expected to level off around 2040 due to Japan’s population decline. As a company that specializes in the planning, designing, and construction of various social infrastructure projects both overseas and in Japan, how would you define Japan’s current construction market and its needs for the years to come?

As you mentioned, Japan’s infrastructure was built during the economic boom that occurred 50 years ago. It was estimated at that time that the infrastructure would last for approximately 50 years. It is now a critical time for the renewal and maintenance of Japan’s infrastructure. This applies to all the existing structures in Japan, both on the ground and underground including the water and sewage piping systems that you mentioned. They all currently require maintenance. Japan is vulnerable to earthquakes and there have been multiple large earthquakes over the years. Each time a large earthquake has occurred, the manual on regulations has been updated. With more stringent regulations, new builds as well as existing structures need to abide by these regulations. The construction industry is busy adapting to these stringent regulations. Earthquake resistance is key since there is an expectation for larger earthquakes to occur in the future. The government expects this earthquake-resistant construction to be completed in five years.

Another construction project that is taking place in Japan is the improvement of Japan’s highway and road infrastructure. The peak is expected to come soon. This renewal project is massive with a large budget being allocated. Only a few major companies can take care of these massive projects. The workload is concentrated on super-general constructors. They focus too much on these renewal projects which means that fewer new building projects are being completed. Unless their workload related to renewal projects is lowered, they will not be able to enter into new projects and new builds. For the next 10 years, there is the prospect of continuous rehabilitation work. By the time these projects are finished, there will be a huge issue surrounding Japan’s population decline. That is why we have to find a new way to do business. The population decline will mean that the population is scattered in regional areas and there will also be less income from taxation. As a result, maintaining the infrastructure will be difficult. On the other hand, the aging population will increase in the cities which will lead to an increase in demand for hospitals and medical facilities. However, there will not be enough supply. They are the two major issues that the rural and urban areas will experience.

As a countermeasure for the rural area issue, rather than scattering the population, creating a compact town is necessary. These towns will require new roads and sewage systems. This also includes the relocation and reconstruction of public facilities such as schools. This will create a new demand for the construction industry.

In urban cities, continuous redevelopment and a more sophisticated approach will be needed. I believe that the population in urban areas will not decline as much. The overall Japanese population is expected to fall below 100 million. However, at the same time, people are centering more around urban cities, especially in the Kanto area. The population in these areas will not decline too much. There is a high possibility that rural areas will have their unique development such as creating a compact town or city or rebuilding a city. For example, Toyama and Utsunomiya are regional cities that are building their mass transit systems to connect the area and have a more comfortable living space.

In urban cities, the intensification of climate change disasters such as heavy rain causing floods and rivers to overflow, is a big issue. Construction projects to mitigate these disasters are also upcoming. Currently, construction is focused on the ground. However, with the intensification of climate change issues, underground construction is something that is being researched. With that, there will be the need for a shielded underground tunnel system, and new types of infrastructure and civil engineering technologies will be required. As climate change issues become more severe, river overflows will continue to be a grave issue for urban areas. Civil engineering technology will be necessary to overcome these issues.


The effects of Japan’s demographic situation are at the core of your answer. However, what is quite interesting is that it is also having a big effect on the workforce. It is expected that within the next few years, more than a quarter of the population will be over the age of 65. However, this is already the case in the construction field which is by and large a super-aging industry. How is your firm reacting to these labor shortages that are so pronounced within the construction and infrastructure segment?

We are not a construction company. Rather, we are a consultant. Having said that, we are trying to incorporate DX and computer systems to facilitate our operations. We are trying to structure ourselves so that we can provide a one-stop service to other companies without being reliant on partners. However, we cannot take care of everything within the urban cities. In our business operation, being present only within the urban cities is not enough. Having branches in regional areas to take care of the workload is the new system that we are trying to introduce.

Conventionally, the idea was to have regional offices and center the facilities around sales. However, the new approach is more of an amoeba type of growth where we have multiple offices across the region even if we only have a few engineers. We want to have multiple smaller offices rather than a few large ones. That is our current business growth model.


Another issue caused by Japan’s declining population is that local projects in Japan will also continue to diminish. As a result, to what extent must your company look overseas to ensure long-term business success?

As a consultancy firm, our core asset is our human resources. Training human resources is therefore vital to the operation of our company. As a result of Japan’s diminishing population, we will need to look overseas for talented individuals. We will also need to find local partners in overseas locations. Many major Japanese contractors are moving their headquarters from Tokyo to countries in Southeast Asia. For example, Shimizu Construction now has its headquarters in Singapore. Having a local headquarters or entity is key to creating channels for the recruitment of talented local engineers. Having the headquarters for overseas business outside of Japan expedites the decision-making process and makes the acquisition of overseas human resources easier. We will look to follow suit in the new future. Where to place ourselves is up to the uniqueness of the company.


It is a very exciting time for the global construction infrastructure field. We are seeing increased investment in developing nations. The Asian region for example spends USD 1.5 trillion every year on construction. We have also seen big investments in Africa with increases of 50% each year in the value of projects. Furthermore, in the US for example, the Biden administration is spending big to redevelop the social infrastructure of the US. What regions do you foresee to have the highest growth potential for your company?

Our focus is on Asian countries. I have worked overseas for quite some time. However, the company has only had overseas operations for a few decades. There are already many Japanese companies operating in the Southeast Asian infrastructure market. There is no passageway for us to enter that market. As a result, our core focus is now on South Asia, Central Asia, and Ukraine.  There is an affiliation towards the Japanese culture in Central Asian countries.


Your company has provided a wide range of services since its foundation over 60 years ago. These include providing consultancy and engineering services for civil engineering projects, energy and power plant-related projects as well as private and public construction. You have also provided your services for overseas projects. Among all of the projects you assist and provide support to, which one do you believe has the most growth potential for your business, and are there any types of projects or businesses you would like to support and provide your know-how and technologies to in the future?

I believe that the most fundamental and indispensable infrastructure is energy, namely the electricity that supports industry and people’s lives. There will be increasing demand for electricity with the growth of the EV market.  There are different types of electricity generation such as thermal, hydropower, and other renewable sources. They cannot all just be combined. The electricity generated by different generators cannot simply be converted and put on the grid. Therefore, it is important to create a system that makes efficient use of switching the electricity onto the grid, so that we can combine all the energy sources and increase the efficiency of electricity generation. We need to brush up on our technology for electricity transmission as well as grid implementation and networking. This includes the substation to convert electricity. That is the vital role of a consultant.


It is very interesting to hear that you are focusing on energy. When we talk about these kinds of social infrastructure, whether that be bridges or energy systems for example, often overseas, it is done in an ODA format of government aid. We saw in our research that your company has also conducted PPP projects as well as purely private sector-driven projects that focused more on an educational framework. Looking at the future, are you planning to diversify the type of projects that you do?  Will you be looking to complete more PPP projects or private projects, or is the goal to remain working closely with JICA and the ODA framework?

Our plan for the future is to have a higher ratio of private projects. They include requests for the construction of infrastructure and bridges. Moving forward we want to continue our operations and provide our civil engineering services for both PPP and PFI projects. Roads and bridges are private projects whereas energy projects are ODA based. We will continue to balance these two pillars of our business in the future.


The energy industry will be the key industry of this century as we are seeing a lot of transformation towards more ecological energy solutions such as solar panels and wind turbines. However, this has been a challenge over the past two decades as there have been issues such as the efficiency of these alternatives and the fact that the energy produced needs to be immediately put into the system. The maintenance and replacement of such types of plants are not thought of in advance as well and they end up polluting the environment. How does your company try to alleviate the challenges faced by using renewable energy? What do you think is the best energy mix for Japan, and how can you support it?

The Project for Enhancing Grid System Operations & Maintenance Capacities through Strengthening National Transmission Despatch Company TSG Training Center in Pakistan

We have been designing solar panels across Japan for the past ten years. In the past, solar power-generating plants needed to be located on the mountainside. It also required trees to be cut. That was very painful as a construction consultant. We proposed using existing unused golf courses for power generation. However, we were unable to reach a substantial agreement with the operators, and therefore, we were not involved in many cases. Connecting the solar power generated on the mountainside to the grid is very costly. When it comes to Japan, from the environmental and power-generating perspective, solar power panels may not be effective. Personally speaking, since Japan is an island country surrounded by the ocean, offshore wind power generation is the best method. However, unfortunately, the manufacturers of offshore grids are mainly from European countries. Mitsubishi also provides these services. However, they are quite expensive.  


Your company has a great reputation when it comes construction of mountain tunnels using the NATM, a method that your company started as a pioneer in the measurement technology used for this practice. Although very convenient, one primary challenge is dealing with the uncertainties of the geological conditions. NATM relies on the principle of continuously monitoring and making adjustments during the excavation, which makes it very sensitive when there are some unexpected ground behaviors. You must also ensure the ground settlement and stability, as well as deal with water ingress during the tunneling and the risk of rock bursts among many other aspects. How do you overcome these challenges to provide the most reliable tunnel using this method?

A situation where an invert is additionally constructed in the tunnel to reconstruct the tunnel from a horseshoe shape to a circular shape to make the structure more resistant to deformation.

This method is called the New Austrian tunneling method (NATM). When it was first introduced to Japan, we were the pioneers in the calculation of rock bolt strength. We have measured and recorded the data of the soil components across Japan. The data was amalgamated and tunnel operators such as the Japanese Ministry of Land and Nexco have access to the accumulated data. In the beginning, this NATM method was only applicable to hard and sturdy soil. However, nowadays, it has become applicable to softer ground too. To cater to soft soils, the size and strength of the bolt have to be changed.

We currently not only provide rock bolt strength measurement services. We also provide deflection calculations for tunnel excavation. Tunnel excavation accidents are quite rare once the rock bolt is in place. Accidents mainly happen at the locations of new excavations. To create a safer environment for a new excavation, we provide supporting methods that prevent the collapse of the soil. While there are sometimes issues related to water, accidents involving falling rocks are very rare. When the NATM method is conducted on softer ground, a thorough simulation is done on the deflection and strength calculations. That is why accidents are so seldom. Having said that, when the layer above the excavated tunnel is thin, the risk increases.

There is also the issue of water absorption after the construction of the tunnel has been completed. It can result in the expansion or contraction of the tunnel. To avoid this from occurring, we create another arch and make it circular. It is additional work to the existing tunnel structure. We keep the car passage open when we do this additional work. This is one of the unique technologies in Japan that we cater to. We conduct the measurement as well as the supervision of the construction.

If the ground surrounding the tunnel is expansive, moisture will increase its volume. This becomes an external force that causes the road surface to deform. Therefore, inverts are installed to counteract the earth's pressure.

At the beginning of the interview, you spoke about the fact that Japan is subject to many natural disasters. The island of Honshu is located at the intersection of three tectonic plates and is therefore often subject to natural disasters such as earthquakes. Throughout this report, we have met many Japanese companies that have developed various anti-seismic technologies that have saved many lives. You also mentioned the floods that are a result of global warming as another threat to the lives of Japanese people. You made it very clear that construction-related industries have a role and responsibility to save lives. What disaster prevention technology does your company provide, and do you anticipate any of the other countries in the region requiring your solutions in the coming years?

In the past, I participated in a bridge construction project in Papua New Guinea. The counterpart proposed a specification based on the New Zealand regulations. New Zealand is also vulnerable to earthquakes. However, the magnitude of the earthquakes in Japan is larger. New Zealand is also a volcanic country. However, the ground in New Zealand is stronger than in Papua New Guinea where the ground is more vulnerable. This is especially the case in the highland areas. Since the project was based on New Zealand regulations, the magnitude of earthquakes in the area was considered more of a lower grade of seismic acceleration. However, New Zealand’s regulations are not nearly as stringent as the Japanese regulations. We tried to bring the project up to the Japanese standard and provide stronger seismic protection. We proposed anti-seismic methods according to the Japanese standard.

Likewise, the Philippines is a volcanic area that experiences a lot of earthquakes. Liquefaction is an issue that is also seen in Japan. However, the Philippines has big concerns about liquefaction as it damages structures both underground and above ground. We clarified the conditions of liquefaction for them. It is caused by seismic acceleration combined with the local soil composition. We analyzed the ground and clarified the potential risks before proposing less costly countermeasures. Japanese technologies are supported by experience. The analysis and countermeasure proposals are very practical. Our strength lies in being able to provide Japanese technologies that are fully supported by experience, and we want to continue to promote these technologies to support local disaster prevention. The Philippines, Indonesia, and Papua New Guinea experience similar situations as Japan as they are also located on the Pacific Rim. Those countries have high hopes of utilizing Japanese anti-seismic technology.


Imagine that we come back to interview you again in 2028 which will be an important anniversary for the company. What ambitions or goals would you like to have achieved for the company by then that you would like to tell us about in that second interview?

We have a plan for 2028. My dream is to enhance the capabilities of our engineering. While our engineering is centered around construction, I also want to focus on plant engineering. Industrial plants supported the growth of the Japanese economy. However, they are now aging and require rehabilitation and renewal. That will be a core focus for us in the upcoming years. In Yokohama, there are four major industrial plants including Nikki, Chiyoda, and Mitsubishi Heavy Industries. In April or May of this year, we are planning to open an office in Sakuragicho in Yokohama which is the center of the industrial plants. Another focus of ours will be on agriculture. The declining population has led to a declining workforce in the farming industry. I want us to challenge ourselves to find new solutions for the dwindling agricultural field. That is more of a passion project for myself rather than a business. That will be my last mission as president.

For more details, explore their website at