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Business Strategy
The Kajima Group will meet increasingly sophisticated customer
needs in shrinking construction markets by fully utilizing
its technical capabilities and providing superior quality.
In doing so, Kajima will increase market share as well as
profitability in its core construction business.
More specifically, Kajima will expand its presence in urban
renewal markets where Kajima's construction expertise
and real estate development experience can be integrated to
produce unique solutions. Kajima will focus on market segments
that require engineering, environmental, and renovation skills
and input. The Group will also work to build additional sources
of revenue including PFI projects, life-cycle management services,
and overseas ventures.
Kajima will also improve business fundamentals by cutting
back administrative expenses and taking measures to reduce
financial risk.
The following are the specific targets and tactics of the
plan.
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Performance Targets for Fiscal 2006 (Ending
March 31, 2006)
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Consolidated
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Non-consolidated
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Revenues
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1,600 billion
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1,100 billion
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Recurring profit
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42 billion or more
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32 billion or more
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Interest-bearing debt
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480 billion or less
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300 billion or less
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Principal Tactics
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1.
Augment profitability of the construction business
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(1)
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Secure orders by enhancing
marketing initiatives
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Assist clients to coordinate
pre-construction tasks, provide clients with
technical advice that makes strategic sense,
and integrate marketing/design/construction
staff in ways that allow this marketing approach
to work most efficiently.
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Aggressively pursue projects
where Kajima's know-how and expertise can have
the greatest impact. Specifically targeted are
“engineering” and “environmental”
fields and reinforcing renovation operations.
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(2)
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Improve project profit
margins by boosting cost-competitiveness
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2.
Strengthen involvement in overseas business
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3.
Diversify and expand sources of profits
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(1)
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Real estate operations
in Japan
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Launch complex, large-scale
development projects in strategically selected
CBD or railway-linked locations.
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Achieve sufficiently high
returns on equity by structuring deals such
that the funds invested by Kajima are minimized
and/or quickly recovered.
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Launch a real estate investment
fund (tentatively called the Kajima Fund) with
a mission to acquire and manage income producing
properties that will generate stable fees/dividends
over the long haul.
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(2)
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Enhance involvement in
PFI projects
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(3)
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Building life-cycle management
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Enhance capabilities in the
area of building maintenance and operation as
well as consulting on related tasks.
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4.
Focused research and development
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Stay focused on innovations
that enable cost reduction, shortening of works
schedules, and improvements in other areas of
importance to Kajima.
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5.
Cut fixed costs and selling and administrative expenses
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(1)
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Downsize the workforce
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(2)
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Revamp the retirement
benefit system, etc.
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(3)
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Slim the administrative
divisions and cut back on selling and administrative
expenses
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6.
Restructure the head office and branches
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Reinforce
Group management systems (enhance revenue generating
capacity and increase in consolidated profits)
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8.
Improve risk management and return on assets
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Reduce assets by disposing
of asset holdings (shares, real estate, etc.)
and reduce interest-bearing debt (target for fiscal
2006 year-end: reduce consolidated interest-bearing
debt to 480 billion or less).
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9.
Strengthen the Kajima brand
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