Yasuda Engineering has developed numerous proprietary pipe jacking methods and technologies to contribute to underground infrastructure development in Japan, and is now looking to expand across South East Asia, including Vietnam.
As a company that specializes in public sewage and underground construction work, can you please give us your analysis on construction in Japan and how you foresee its evolution in the years to come?
Yasuda Engineering was established in 1975 as a subcontractor for pipe jacking work and chemical grouting work. After the economic bubble burst in the 90s, the Japanese economy declined, so the government pursued civil engineering and infrastructure projects to compensate for the economic decline. In fact, from 1995 through 1999, a little behind the bubble in the business world, the construction industry experienced a bubble.
In the field of pipe jacking work, the number of new construction works had peaked in 1999 and since then, has decreased year by year due to the spread of sewerage systems. In fiscal 2015 it reached 270 km, and I feel that it has continued to decrease by around 10% year by year.
The market forecast for future pipe jacking work is
The Japanese population has the oldest average life expectancy in the world of 85 years. More than one third of the population is over 65, which means a reduced labor force and less demand for products in general. How has this declining demographic affected your company?
It’s true that we are experiencing a shortage in the labor force. Currently we have 158 employees and their average age is 47.6 years old, and half of our employees are over 50 years old. Overall, the average age is increasing every year, so it's very important to consider how to pass down our proprietary technology and knowledge. We are now trying to recruit in a balanced way. We recruit new university graduates as well as those who already have work experience. At the same time, we're trying to welcome overseas engineers and workers.
Our company started expansion of our business overseas in 2004, starting with South Korea. Then, in 2010, we entered Vietnam. Since then we have hired and trained local Vietnamese engineers, and some of them have been invited to Japan to learn the pipe jacking method, which is a very unique Japanese construction method. And now they are among the top class special technicians in pipe jacking work.
We are also trying to recruit young Japanese people, but construction is not a popular occupation nowadays. It is considered a ‘3K’ job, as we say in Japan, which means it requires Kitsui (=hard work), Kitanai (= dirty) and Kiken (=dangerous). Many people actually are not willing to work in this industry.
In order to change this situation, we have to change the image of the company. At Yasuda we’re trying to create a very comprehensive training scheme where the young generation is taught by all of our employees. Traditionally newcomers are not given systematic work skill education in the Japanese construction industry. They are supposed to learn by themselves watching what their seniors do. If we continue this way in today’s society, the younger generation will soon quit. In order to retain staff, it's important to create a training scheme that is applicable and appropriate to the current social situation.
Currently we have 23 foreign staff from Vietnam, Myanmar and South Korea. Their average age is 30 years old. Excluding them, the average age of the Japanese staff is over 50. Most of the Japanese staff are above 50, so by having this balance of an elder generation and a younger generation, we are trying to pass on the knowledge and technology, thus creating a sustainable company.
What is the current focus of your R&D technology? What kind of new techniques or technologies are you developing to deal with today's challenges?
Since the Lehman shock, Yasuda Engineering has been focusing on machinery and equipment factories, and the area of research and development. Initially, we purchased and outsourced all the machines, but eventually we started our own maintenance work, and now we have more than 100 different types of pipe jacking machines. Then, we started to develop our own machine, and in 2006, we developed the JyAT method which can construct a curved underground tunnel over a long distance with use of a CCD camera sensor to enable automatic survey adopted to micro-tunneling method. In order to install the jacking pipe at the specified position and height, surveying in accuracy of millimeter is required, but before development of this method, the maximum distance that can be surveyed is about 50 meters, and the tunnel must be straight. However, with the JyAT method, it is possible to automatically survey 300 meters or more, and it is also possible to construct curved tunnels.
When reconstructing a pipeline network for large-scale urban redevelopment, social infrastructure renewal, flood control, etc., the location of such works will be centered on bigger cities.
However, since the infrastructure network is already in place in those cities, the underground is full of existing pipelines of various kinds.
Therefore, there are many cases of underground remnants such as shafts and temporary piles that were buried in old construction. Among them, metal obstacles such as steel sheet piles and H piles cannot be excavated with existing pipe jacking machines or shield machines. Therefore, it took a lot of time and cost because there was no choice other than to change the pipeline alignment to avoid the obstacles or to dig up from the ground and remove them.
Therefore, in 2011, Yasuda developed a Milling mole method that is equipped with an electromagnetic wave sensor that detects metal obstacles and can be cut with a special bit to penetrate metal obstacles. The feature of the Milling mole method is that the cut metal obstacles are made into small metal pieces, taken into the machine together with excavated mud, and transported to the ground through vacuum discharging hose. This is a very effective method for pipe jacking work where metal obstacles exist on the planned line.
Current R&D focuses on automated pipe jacking methods. Since operating a pipe jacking machine requires specialized skills and knowledge and it takes a long time to train new people as operators, we are working on developing machines that are easy to handle even for inexperienced people. At the same time, the development of automatic pipe jacking machines is urgently needed to respond to the impact on the construction industry due to the aging and declining population of Japan.
Our R&D efforts use artificial intelligence (AI) to perform image processing to determine the nature of underground soil. The new technology will also help determine the proper speed of the machine for excavation of tunnels and suitable types of slurry to be used.
What impact do you think new digital technologies such as AI, the IoT and robotics will have on your business and on the construction field as a whole?
I think DX isn't growing in the pipe jacking industry because few companies can afford to invest in R&D. With R&D, you have to think about its cost and effectiveness. It takes quite a considerable amount of money in order to develop new technology and machinery such as the Milling mole method. We can do most of the testing in-house, which keeps development costs down. However, in order to speed up development, it is important to combine the technological capabilities of other companies, including the IT industry. We hope cooperating with such companies will be useful for the development and evolving of the pipe jacking method.
How would you describe the role that collaboration or co-creation plays in your business, and are you currently looking for any new partners for collaboration, either in Japan or overseas?
We have many ideas for partnerships, but with the global pandemic, many of them are stagnating. We had some talks with a local Vietnamese construction company to do a joint venture, but with the pandemic, that became impossible. Nevertheless, we still are keeping a cooperative relationship with them. If they do a pipe jacking project, we will be very happy to support them with our training technology, and we are open to transferring our technology. At the same time, we are not only a construction company but also a manufacturer of machinery, so we can provide machinery for our own projects as well as promote it in overseas markets.
What is your method to apply the technology overseas?
The global standard for pipe jacking is the slurry method or the mud pressure method. However, Japanese companies developed a special technology called “high-density slurry method” about 30 years ago. Except for the condition of high groundwater pressure, this method is excellent in terms of workability (compactness of equipment) and soil adaptability (adapting to a wide range of soil quality from clay to boulder layers), it can handle sharp curves, multiple curves, long distances and boulder ground. This high-density slurry method is now the standard in the Japanese pipe jacking industry.
There are advantages and disadvantages in all three methods, but the high-density slurry method is common in Japan, and we are convinced that this unique method of Japan can be applied also to overseas.
Looking forward, is there a particular region, country, or market that you consider key as part of your international development? Could you elaborate on your international expansion strategy?
There are risks involved when expanding business overseas, and it is difficult to set specific target countries. But in overseas expansion, we would like to cooperate with a general construction company in Asia and proceed as a specialist in pipe jacking work. Our main target would be the Japan Official Development Assistance programs (ODA).
Sure, we also sought to participate in ADB and World Bank-financed works in Vietnam, but we are now focusing on cooperation with JICA (Japan International Cooperation Agency) with which we already has a connection.
We would like to make use of the experience cultivated in Vietnam and the Vietnamese pipe jacking specialists cultivated locally for pipe jacking work in expanding business to Southeast Asian countries. We also plan to sell and rent the pipe jacking machinery and equipment manufactured in-house to overseas pipe jacking contractors together with providing technical guidance.
The SDGs have set an international goal of "Safe water and toilets around the world", and one of the targets is to ensure that all people have appropriate and equal access to sewage and sanitation facilities by 2030. In countries and regions where water and sewage facilities are underdeveloped, we believe that pipe jacking methods can play a major role in achieving a safe and hygienic environment.
In developing countries, some countries have already begun to develop water pipes and sewerage facilities with loans from other countries including Japan, but Japan plans to continue to provide support through ODA, and we would like to work mainly on pipe jacking work.
Let's say we come back to interview you again on the last day of your presidency. What would you like to tell us about your goals and dreams for the company by that time, and what would you like to have achieved by then that you could pass on to future company executives?
To be very honest with you, I did not have a very big objective when I established the company. I am now fortunate to have been able to grow to one of the top Japanese pipe jacking contractors. I am grateful that this is the result of the efforts and technological development of all employees.
Yasuda Engineering started a business as a subcontractor of pipe jacking work and continued for about 20 years, but with the goal of not only subcontracting work but also contracting directly with the ordering party and receiving an order for construction as a prime contractor with Yasuda's signboard, over the years, we tried to get a qualification to become a direct contractor in the construction work ordered by Osaka Prefecture.
Then, in May 1997, we received an order for construction as a prime contractor for the first time in Higashi-Osaka City. In April 1998, we obtained Rank-A in the civil engineering qualification of Osaka Prefecture, and in October 1998, we received an order from Osaka Prefecture as a prime contractor.
And now, we are constructing a total of six projects as a direct contractor, three for Osaka prefecture, one for Osaka city and two in other areas. Our name is known now, which is a great source of pride for us. I hope that we can maintain this situation and pass it down to the next generation. And we would like to develop the technology of Yasuda's pipe jacking method not only in Japan but also in Southeast Asia in the future.