The Race to Build The World: Ja­panese con­struc­tion firms take their ex­per­tise global

Ja­panese com­pa­nies of­fer un­ri­valled qual­ity, tech­nol­ogy and project dura­bil­ity, and are ex­pand­ing over­seas to help other na­tions meet their build­ing and in­fra­struc­ture chal­lenges.

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Tokyo’s fu­tur­is­tic sky­line and the Shinkansen bul­let train sys­tem are amongst the most iconic sym­bols of Ja­pan, and a tes­ta­ment to the tech­no­log­i­cal prow­ess and ca­pa­bil­i­ties of the na­tion’s con­struc­tion and in­fra­struc­ture firms.

In its hey­day the Ja­panese con­struc­tion in­dus­try was thriv­ing do­mes­ti­cally. In 1989, Ja­pan’s con­struc­tion sec­tor ac­counted for some 45 tril­lion yen, or around 15 per­cent, of the coun­try’s en­tire GDP. The pe­riod that fol­lowed the real es­tate crash, known as the “lost decade,” saw a steady de­cline in Ja­pan’s con­struc­tion sec­tor. In 2010, it was worth around 25 tril­lion yen, and while the sec­tor has shown growth up to 2015, ris­ing to 28 tril­lion yen, it is still far from the dizzy­ing heights of 1989.

With con­struc­tion projects re­lated to the Tokyo 2020 Olympics and stim­u­lated by Prime Min­is­ter Shinzo Abe’s $61 bil­lion in­vest­ment plan, the in­dus­try should con­tinue to ex­pe­ri­ence mod­er­ate growth at home, but the na­tion’s con­struc­tion firms, like so many oth­ers, are eye­ing grow­ing op­por­tu­ni­ties over­seas, with a par­tic­u­lar fo­cus on Asia. To main­tain its growth mo­men­tum, the 45 coun­tries in de­vel­op­ing Asia will need to in­vest $26 tril­lion be­tween 2016 and 2030 in in­fra­struc­ture projects in power, trans­port, telecom­mu­ni­ca­tions and wa­ter, ac­cord­ing to a re­port by the Asian De­vel­op­ment Bank (ADB) re­leased in March.

In 2015, Prime Min­is­ter Shinzo Abe pledged to in­vest $110 bil­lion in “qual­ity” in­fra­struc­ture projects across Asia over five years. In No­vem­ber, fol­low­ing the meet­ing of U.S. pres­i­dent Don­ald Trump and Mr. Abe, Ja­pan re­it­er­ated its com­mit­ment to in­vest in “high-qual­ity” in­fra­struc­ture in Asia, in part­ner­ship with the United States.

Ja­pan’s sup­port of in­fra­struc­ture projects in Asia is noth­ing new. For decades, it has of­fered over­seas de­vel­op­ment as­sis­tance (ODA) to its neigh­bors through or­ga­ni­za­tions like the Ja­pan In­ter­na­tional Co­op­er­a­tion Agency (JICA).

“Ja­panese ODA fo­cused on in­fras­truc­tural de­vel­op­ment in East and South­east Asia. In­fra­struc­ture was a cat­a­lyst for pri­vate in­vest­ment and was a re­mark­able con­trib­u­tor to the over­all eco­nomic growth of these coun­tries,” says JICA pres­i­dent, Shinichi Ki­taoka.

“In­fra­struc­ture was key to cre­at­ing a con­ducive en­vi­ron­ment for Ja­panese man­u­fac­tures to bring their in­vest­ment in the re­gion. With­out ports, roads, bridges, or wa­ter sys­tems, it would have been im­pos­si­ble for these coun­tries to at­tract pri­vate in­vest­ment.”

From ODA to PPPS

Thanks partly to Ja­pan’s ini­tia­tives in the re­gion, there has been a shift from a fo­cus on ODA to pub­lic and pri­vate in­vest­ment. In the mean­while, China has be­come a global su­per­power and the largest in­vestor in Asian in­fra­struc­ture. Over the com­ing years, Ja­pan will com­pete with China for tril­lions of dol­lar­sworth of in­fra­struc­ture con­tracts.

Ja­pan knows it may not be able to com­pete with China in terms of quan­tity, but it is fo­cus­ing on sell­ing it­self as a de­vel­oper of high-qual­ity in­fra­struc­ture projects. Ja­panese com­pa­nies as­sure that their projects may cost more than those of Chi­nese com­peti­tors, but they are built to stand the test of time – re­quir­ing less main­te­nance, which ul­ti­mately makes them cheaper in the long term.

“In com­par­i­son to China’s rapid and large-scale de­vel­op­ment, Ja­pan aims to­ward long-term, sus­tain­able and growth-ori­ented projects with con­sid­er­a­tion for so­cial and en­vi­ron­men­tal im­pacts and ap­ply­ing ad­e­quate tech­nolo­gies to each coun­try specif­i­cally,” says Yoshikazu No­mura, Pres­i­dent of Ni­hon Suido Con­sul­tants, Ltd. (NSC).

“It is a fact that Ja­panese firms are fac­ing se­vere com­pe­ti­tion, es­pe­cially with Chi­nese firms. So far, Ja­panese firms have be­lieved in their ad­van­tage of qual­ity and in the ad­van­tage of our life-cy­cle cost.” NSC has been pro­vid­ing wa­ter and en­vi­ron­men­tal con­sul­tancy

ser­vices, in­clud­ing wa­ter sup­ply, waste­water en­gi­neer­ing, sew­er­age, drainage and san­i­ta­tion, for ODA projects over the past five decades. The com­pany also par­tic­i­pates in con­sor­tiums to de­sign, build, fi­nance, and op­er­ate and main­tain pub­lic-pri­vate part­ner­ship (PPP) projects. As the shift from ODA to pub­lic and pri­vate in­vest­ment con­tin­ues, NSC will lever­age on its vast ex­pe­ri­ence and tech­no­log­i­cal knowhow to sup­port the de­vel­op­ment of world-class wa­ter and re­lated in­fra­struc­ture across Asia and be­yond.

“The need for wa­ter and sewage in­fra­struc­ture in emerg­ing coun­tries is still high and our tech­ni­cal ca­pa­bil­i­ties will be widely de­manded and it is an im­por­tant role for us to take over in­fra­struc­ture as­sets to the next gen­er­a­tion prop­erly,” says Mr. No­mura.

“We can bring com­pre­hen­sive en­gi­neer­ing con­sult­ing ser­vices – not only in de­sign and con­struc­tion su­per­vi­sion, but also in plan­ning and ad­vi­sory ser­vices for any as­pect of wa­ter in­fra­struc­ture, by in­te­grat­ing and utiliz­ing so­phis­ti­cated knowl­edge and tech­nolo­gies.”

Ja­panese com­pa­nies have built up decades of un­ri­valled ex­pe­ri­ence in build­ing re­silient, long-last­ing and high-qual­ity struc­tures in a na­tion prone to nat­u­ral dis­as­ters and with var­ied cli­mates – ex­pe­ri­ence Ja­pan is will­ing to share with the world, and par­tic­u­larly with its neigh­bors in fast-grow­ing Asia.

“We have ac­cu­mu­lated knowhow on the con­struc­tion of re­silient in­fra­struc­ture sys­tems,” Mr. No­mura points out. “NSC has decades of ex­pe­ri­ence in wa­ter-re­lated projects through­out Ja­pan. This ex­pe­ri­ence is widely ap­pli­ca­ble in emerg­ing coun­tries and we have an abun­dance of ex­pe­ri­ence around the world.”

An­other con­sult­ing com­pany that has been in­volved in ODA and has been work­ing in con­junc­tion with the JICA is Chuo Kai­hatsu Cor­po­ra­tion (CKC), which has been pro­vid­ing pro­fes­sional en­gi­neer­ing ser­vices since 1948. “We went abroad with JICA, but cur­rently we are look­ing for new ways to go abroad, in order to ex­pand our over­seas op­er­a­tions. And of course we are look­ing for PPPS, but maybe in the fu­ture, as they are big projects.” says pres­i­dent, Ichiro Seko.

“In the past, we were solely fo­cused on ex­pand­ing our ac­tiv­i­ties in­ter­na­tion­ally. How­ever, presently, only 5 per­cent of our to­tal rev­enue of 8 bil­lion yen comes from our over­seas projects. Nev­er­the­less, our for­eign projects are not stag­nat­ing, and we ex­pect a big ex­pan­sion abroad.” CKC has brought its seis­mic tech­nol­ogy global to other dis­as­ter-prone coun­tries. Fol­low­ing the 2008 Sichuan earth­quake in China, the com­pany worked with the Chi­nese govern­ment to de­velop its ‘K3 Sys­tem’ to pre­dict and mon­i­tor the pos­si­bil­ity of other earth­quakes.

“The real com­pet­i­tive ad­van­tage is not the ma­chine it­self but be­ing able to im­ple­ment, to con­trol and to ef­fec­tively use this tech­nol­ogy, which can mon­i­tor all seis­mic ac­tiv­i­ties from a com­puter thanks to our trans­mis­sion de­vices.” ex­plains Mr. Seko.

“Our K3 tech­nol­ogy is not only present in China; it has been im­ple­mented in Aus­tralian, Tai­wan and Sri Lanka. In the fu­ture, we want to con­cen­trate in im­ple­ment­ing this tech­nol­ogy in South East Asia, with the help of lo­cal part­ners.”

Pa­cific Con­sul­tants

Es­tab­lished as a U.S. com­pany in 1951 to sup­port Ja­pan’s re­build­ing ef­forts af­ter World War II, Pa­cific Con­sul­tants Co., Ltd. is one of Ja­pan’s lead­ing con­struc­tion con­sul­tancy firms and to­day man­ages thou­sands of projects across 29 coun­tries. In Ja­pan the com­pany has worked on some of the na­tion’s most im­por­tant in­fra­struc­ture projects, in­clud­ing to Shinkansen high­speed rail­way. Out­side of Ja­pan, the com­pany has been en­gaged in rail­way projects in South­east Asian coun­tries, and in the new high-speed rail­way in In­dia. At home in Ja­pan, Pa­cific Con­sul­tants is fo­cused on de­vel­op­ing “nextgen­er­a­tion in­fra­struc­ture that will sup­port fu­ture growth” in re­sponse to the na­tion’s ag­ing pop­u­la­tion. Like most Ja­panese con­struc­tion firms, the com­pany is mak­ing the in­evitable ex­pan­sion over­seas. “At Pa­cific Con­sul­tants, we adapt our over­seas strat­egy de­pend­ing on the mar­ket at hand. For de­vel­op­ing coun­tries, we pro­vide our in­te­grated con­struc­tion con­sult­ing ser­vices for the cre­ation and op­er­a­tion of new civil en­gi­neer­ing projects,” says chair­man, Shinichi Hasegawa.

“For ad­vanced na­tions, we pro­vide our ex­per­tise in the main­te­nance and re­newal of old in­fra­struc­ture in order to en­hance the char­ac­ter­is­tics of ex­ist­ing build­ings. I started an­other over­seas en­tity five years ago, and while it is still small in size, I have great hopes for the fu­ture. Our ob­jec­tive is to sur­pass the $100 mil­lion in over­seas sales by 2020; and to be­come a 100-bil­lion-yen com­pany by 2030.” Echo­ing NSC’S Mr. No­mura, Mr. Hasegawa ac­knowl­edges the com­pe­ti­tion faced in Asia by its low­er­priced Chi­nese com­peti­tors, but re­it­er­ates that Ja­pan’s ad­van­tage lies in the qual­ity, sus­tain­abil­ity and dura­bil­ity of its in­fra­struc­ture. “Chi­nese cor­po­ra­tions are our

“Ja­panese ODA fo­cused on in­fras­truc­tural de­vel­op­ment in East and South­east Asia. In­fra­struc­ture was a cat­a­lyst for pri­vate in­vest­ment and was a re­mark­able con­trib­u­tor to the over­all eco­nomic growth of these coun­tries” Shinichi Ki­taoka, Pres­i­dent, JICA “In com­par­i­son to China’s rapid and largescale de­vel­op­ment, Ja­pan aims to­ward long-term, sus­tain­able and growth-ori­ented projects” Yoshikazu No­mura, Pres­i­dent Ni­hon Suido Con­sul­tants, Ltd.

great com­peti­tors. In Ja­pan, we be­lieve that any in­fras­truc­tural project must pro­vide safety and se­cu­rity, while sus­tain­ably sup­port­ing the lo­cal econ­omy in the long term. We call it ‘smart in­fra­struc­ture’.

“For any con­struc­tion project to achieve longevity, qual­ity must be pri­or­i­tized. In our in­dus­try, it is un­fair to re­gard the im­me­di­ate cost over the long-term re­turn. If one de­sires to have long-liv­ing in­fra­struc­ture, the price can­not be dis­counted. At Pa­cific Con­sul­tants, we be­lieve that all con­struc­tion projects should be of high qual­ity, and pric­ing should re­flect the right cost for the right value.”

Ja­pan Port Con­sul­tants

Ja­pan Port Con­sul­tants, Ltd. also has a his­tory that dates back to Ja­pan’s post-world War II re­de­vel­op­ment. The com­pany was be­hind the de­sign and con­struc­tion of the in­ter­na­tion­ally ac­claimed and award-win­ning Kan­sai Air­port in Osaka, which has been com­pared to en­gi­neer­ing mar­vels such as the Panama Canal and Hoover Dam.

“We had to de­velop Kan­sai air­port 5 kilo­me­ters (3 miles) away from land. As the air­port is lit­er­ally in the ocean, the build­ing con­di­tions were ex­tremely se­vere and dif­fi­cult.

Many Amer­i­can peers called the project ‘fan­tas­tic, but crazy’,” re­calls pres­i­dent, Tet­suo Omura.

“Kan­sai air­port is built at a level where the depth of the sea reaches 30 me­ters while be­ing far away from land. We are very proud of this project as it is the proof of the unique­ness of Ja­panese tech­nol­ogy.” JPC has been in­volved in ODA port projects abroad. Mov­ing for­ward, the com­pany wants to draw on its 57-year track record of de­vel­op­ing port and har­bor fa­cil­i­ties in Ja­pan to pro­vide high-qual­ity con­sult­ing ser­vices for over­seas pri­vate port projects.

“Ja­pan is a small is­land na­tion with se­vere nat­u­ral con­di­tions, such as earth­quake, tsunamis and dif­fi­cult

land on which to build. We have had no choice but to de­velop the nec­es­sary ex­per­tise to con­struct dense and highly tech­no­log­i­cal projects. This know-how in den­sity and in deal­ing with nat­u­ral dis­as­ters is a strength we wish to bring to the world.”

Su­mit­omo Elec­tric

While wa­ter, ports and rail in­fra­struc­ture is im­por­tant for Asia’s de­vel­op­ment, so too, of course, is elec­tric­ity. Ow­ing to its ca­pa­bil­ity of ma­te­rial de­vel­op­ment, Su­mit­omo Elec­tric has de­vel­oped the world’s best-in-class high-volt­age, di­rect cur­rent (HVDC) cable and con­verter tech­nol­ogy. “As our HVDC tech­nol­ogy is char­ac­ter­ized by low loss for longdis­tance power trans­mis­sion, it will be uti­lized to con­nect re­gions and na­tions alike,” says com­pany pres­i­dent, Osamu Inoue.

“We have also achieved a world record for the most pow­er­ful HVDC XLPE cable sys­tems.”

In recog­ni­tion of Su­mit­omo’s in­no­va­tive tech­nol­ogy, ex­cel­lent qual­ity con­trol sys­tems and proven track record in Ja­pan, the com­pany was proudly awarded a con­tract for the Nemo Link project, a HVDC sub­ma­rine power cable un­der con­struc­tion be­tween Eng­land and Bel­gium, which is a joint ven­ture be­tween the UK’S Na­tional Grid com­pany and Bel­gium’s Elia Group.

“We were awarded the Nemo Link project by show­cas­ing our DC 400 kv in­ter­con­nec­tor us­ing the DC XLPE cable. This HVDC cable can carry up to 1 GW of power, an as­ton­ish­ingly high bulk power for a trans­mis­sion line. And also, HVDC tech­nol­ogy can lower the elec­tri­cal loss for long-dis­tance power trans­mis­sion com­pared with HVAC tech­nol­ogy,” ex­plains Mr. Inoue.

This ground­break­ing tech­nol­ogy com­bines higher bulk power with lower trans­mis­sion loss, and will en­able Nemo Link to ful­fill the en­ergy trans­mis­sion de­mands be­tween the UK and Bel­gium. “Through­out its his­tory, Su­mit­omo Elec­tric has al­ways been a pioneer in ma­te­rial de­vel­op­ment and power cable in­no­va­tion. We were the first in the world to de­velop nu­mer­ous er­adefin­ing power ca­bles and we will fur­ther ex­pand our busi­ness to meet the de­mands of mod­ern so­ci­eties.”

Meet­ing the en­ergy de­mands of a mod­ern so­ci­ety is also the fo­cus of Hi­tachi Zosen, a com­pany which is among the world’s lead­ing ex­perts in the gen­er­a­tion of en­ergy from waste.

“More than ten years ago, we started to en­hance the pro­duc­tiv­ity of our en­ergy-from-waste plants and our power gen­er­a­tor sys­tems. And now, we have started to in­cor­po­rate AI tech­nol­ogy into our op­er­a­tions,” says pres­i­dent, Takashi Tan­isho, who be­lieves that all Ja­pan’s con­struc­tion firms must adopt new tech­nolo­gies such as AI and ro­bot­ics mov­ing for­ward.

“We must in­crease our pro­duc­tiv­ity through the use of in­no­va­tive tech­nolo­gies, such as ro­bot­ics and AI,” he says.

“We must place our ef­forts in de­vel­op­ing the con­struc­tion tech­niques of the fu­ture. To­day is the time to cre­ate the growth foun­da­tions for to­mor­row.”

“We be­lieve that any in­fras­truc­tural project must pro­vide safety and se­cu­rity, while sus­tain­ably sup­port­ing the lo­cal econ­omy in the long term” Shinichi Hasegawa, Chair­man, Pa­cific Con­sul­tants Co, Ltd. “Mov­ing for­ward, we must place our ef­forts in de­vel­op­ing the con­struc­tion tech­niques of the fu­ture” Takashi Tan­isho, Pres­i­dent, Hi­tachi Zosen Cor­po­ra­tion

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