“Vision for the future”
To secure and maintain revenue streams in overseas markets in the future, it is essential to nourish and expand existing businesses and simultaneously cultivate new markets. In this section, we would like to outline our “Vision for the future” which will see Kajima bound ahead with a diverse and resource-rich business platform that fortifies our positions in regional markets through M&A and collaboration with local partners. We asked each leader to talk about their ardor for cultivating new markets, measures they have already implemented, and new initiatives and services they are working on for the future.
KAJIMA U.S.A. aspires to be a unique group of
companies that outstanding local enterprises
with distinctive business models
want to join and work with.
President and CEO
Please tell us about the initiatives unique to Kajima U.S.A. (KUSA)
As you know, construction and real estate businesses are deeply seated in local communities. Without respect for the cultures and customs where we operate, achieving business success is quite difficult. This is why having locally hired executive personnel to lead and manage each of our group companies is very important. KUSA has grown by inviting successful companies operating in various regions and business fields to join our group and has become a collective of operating companies spanning both the construction and real estate development segments. As the holding company, Kajima U.S.A. oversees each company led by local management based on the principles of “Autonomy: respect for independence”, “Alignment: promotion of cooperation”, and “Accountability: clarification of responsibilities”. We endeavor to be uniquely competitive as a unified company, not just a loosely assembled group.
What are the specific directions for growth?
For KUSA to grow as a group, it is essential that we steadily develop existing individual businesses, realize the value created by collaboration among group companies, and explore new domains for business as well as areas of expertise. Regarding the second point, we work to expand profit opportunities not only through collaboration between construction and real estate development companies, but also through collaboration within real estate development companies by combining their respective characteristics and strengths. We also expect that joint and shared construction methods and/or technology development among construction companies will enhance respective productivity resulting in improved cost competitiveness.
KAJIMA OVERSEAS ASIA
I am convinced that our achievements spanning
more than 50 years in eight countries across Asia
have gained us the trust of local communities, and
that we are recognized as one of the leading general
contractors in Asia.
Are there any initiatives specific to Singapore?
In order to be competitive across all eight Asian countries, we established the Singapore office of the Kajima Technical Research Institute (KaTRIS) in 2013. In 2014 we also established an Engineering Division in Singapore. For many years now, we have leveraged the combined strengths of all nine divisions of Kajima, including the Real Estate Development, Civil Engineering and Interior Design Divisions, which also operate businesses in this region. Allow me to give you an example. Since April 2019, expats in charge of business development from Kajima Overseas Asia (KOA) have been assigned as members of KaTRIS to promote cutting-edge technologies to our clients. Kajima’s expats and clients alike are highly interested in new technologies, and so I am looking forward to future business development.
What should you pay attention to when developing new business?
Looking ahead, we believe that collaborating with local companies will enable us to build a more community-based business model and provide high value-added services. However, there may be uncertainties when expanding our business through immediate mergers and acquisitions with local construction companies so we must proceed cautiously. Therefore, we began by first getting to know other major general contractors by forming joint ventures for some major projects, and have already achieved excellent results in Vietnam, Malaysia, and other countries.
When working abroad, rather than unilaterally imposing
our own ways, it is necessary to understand
the different cultures and customs of each country,
and respond to their needs with our flexibility
Chief Executive Officer
How do you view the risks of real estate development business in Asia?
In Asia, where market maturity differs from country to country, each opportunity presents a completely different set of risks. We have to assess the risk accurately, and mitigate it by diversifying our business portfolio (offices, residences, hotels, shopping malls, etc.) and regions where we operate. However, in a manner of speaking, real estate development business in Asia is profitable because of the inherent risk. So rather than always trying to avoid risks, sometimes I may advise you to think critically about the best way to proactively approach and manage those risks.
What do you keep in mind as a project progresses?
Real estate development differs greatly from contract business because of the high degree of creative freedom. While having freedom demands that we be creative, we must use this responsibly. When we are deeply involved in a project and are trying to embody interesting and enjoyable elements, it is also important that we do not focus only on ourselves. While having passion is good, it is also important that we view the project objectively through the eyes of others and work on the development project patiently.
It is our basic policy that, rather than simply acting like an investor, we endeavor to build our business as a developer with strong capabilities and expertise thus differentiating ourselves without reliance on fee-based developers.
For our next step, I would like to explore partnerships with institutional investors that do not have a professional development team. This gives us an opportunity to challenge projects of a much larger scale from a very early stage.
People often believe that in overseas markets, a contract
speak volumes. However, there will always be national
and individual characteristics that exist in every country
and building a good relationship of trust with the people
you are working with is of the utmost importance.
Director, President and Chief Executive Officer
Any new progress with your business that you can share with us?
Until recently, the real estate development division of Kajima Europe (KE) had been focusing on the PFI business, value-added investment business in the United Kingdom and logistics facilities business in Central Europe. As I was involved in rental housing projects when I worked in the United States, I wanted to add housing-related business development, such as student dormitories, to KE’s portfolio. The presidents of KE's group companies then identified significant business opportunities in student dormitories in Poland. I immediately flew to Poland and met with executives of Student Depot, a student dormitory development and an operation company. As our corporate cultures seemed to fit, I made the decision there and then to work with them.
That was a very quick decision. Please tell us how things have progressed since then.
The acquisitions were made in May 2019 at which time they managed and operated six student dormitories, including those under construction, for a total of about 1500 rooms. Although the student accommodation market in Poland was still in its infancy, they were already the market leader. While there were more than one million university and graduate students across the country, there were only about 5,000 student dormitories with modern, individual rooms. My idea was to create comfortable living environments as soon as possible for all the students that were sharing rooms in old, public corporation housing from the communist era. Now we are steadily expanding our business based on the relationships of trust we have forged with the company's Polish executives.
* Photo of Les Domaines de Saint Golf and Spa Resort, a golfing resort developed by KE located in Southern France.
Kajima Australia is a local business with strong ties
to the community. We will focus on strengthening
our offerings capabilities based on the region’s needs and
steadily improve the quality of our services.
Managing Director and CEO
How would you define Kajima Australia (KA)?
The big picture which I aspire to for KA is a corporation that is both credible and capable, but simultaneously young and energetic with huge growth potential. Through the acquisition of Icon Co. and Cockram, and subsequent merging of the two companies to form the new Icon, we have created a robust foundation in Australia and New Zealand to provide comprehensive and high-quality construction services.
I also have high expectations for our overseas operations in Cockram China and Scenario. While Cockram China's construction management (CM) operations specialize in production and research facilities for pharmaceutical companies, and Scenario’s expertise is in designing, manufacturing and constructing distinct and unique interiors and exteriors, such as for theme parks, both are reputable as high-quality providers of premium services in Asian and U.S. markets.
Please tell us more about the future prospects of each.
The construction division in Australia and New Zealand is already growing into one of the leading regional companies, but we will continue to focus on strengthening our offerings capabilities based on local needs and steadily improve the quality of our services. In addition, we will strengthen collaboration between construction and development businesses in order to build a more stable business platform.
A major feature of our overseas business is that it targets niche markets, which are on the rise. Both Cockram and Scenario will strive to further cultivate and evolve their technologies as well as refine their unique and highly specialized services.
Chung-Lu Construction has a history of around 120 years
in Taiwan and is a high-profile brand.
We will continue to raise the value of this brand and
take on new challenges.
Chairman and General Manager
Please tell us about your efforts to enhance Chung-Lu’s competitiveness.
In order to construct buildings that are both competitive and bring our clients satisfaction, we established the Production System Reform Promotion Office at Chung-Lu’s head office in April 2019. Specific initiatives include:
- Construction Drawing Group: Utilizes BIM (Building Information Modeling) to reconcile mechanical, electrical, piping equipment with the structure and imbed the problem-free data into the construction drawings.
- Construction Planning Group: Before we start construction works, this group checks if the construction schedules and plans are appropriate and cooperates with site project managers in order to formulate suitable plans for every single project.
- Commercial Group: Cooperates with site project managers, and completes material purchases first; allow them to focus on managing the projects including safety, quality and construction schedule control.
Project managers may have a hard time until they become accustomed, but they all agreed to try these new initiatives.
And are you planning any further measures?
Kajima Japan assigns 10-20% of young engineers who have gained six years’ experience with the company to overseas subsidiaries for five years. I am thinking of assigning these young Japanese engineers that are posted to Chung-Lu to the Construction Drawing Group, Construction Planning Group, and Commercial Group to learn and understand Chung-Lu methodologies or the “Chung-Lu standard” to manage projects in Taiwan before assigning them to project sites. I also hope to be able to assign new Taiwanese graduate engineers to these three groups on a rotating basis to gain experience. In this way, Taiwanese and Japanese employees will be able to engage and work together more smoothly, improving their abilities and in the process, fill Chung-Lu with energy and vitality.
KAJIMA CORPORATION (CHINA)
Our vision is to contribute to Chinese society
through technology and shape the future.
Further, it is our goal to become the preeminent brand
of choice for pharmaceutical companies
and other high-tech industries.
What is your strategy in such a huge market?
Our business is based on the trust and confidence we have built up not only in Japan but also all over the world throughout our history. Our business is one where clients buy buildings, space, and plans that are yet to take form.
For clients considering business in China, first and foremost, it is important to build trust by reliably addressing clients’ needs in areas that require advanced technologies. As China's economy develops, demand is rising not only for quality buildings, but also for project management. We believe the cornerstone to growing our business in the future will be continually providing finely tuned construction management and high-quality buildings with a view to fields that will be opened to foreign capital in the future.
What specific measures have you implemented?
The more difficult a building becomes, the better we must understand "what we produce and what our clients expect." To create high-quality products, it is imperative we design and construct buildings fit for purpose.
In the field of pharmaceuticals, for example, the Kajima Australia (KA) Group's Cockram China specializes in pharmaceutical manufacturing facilities.
Since the Kajima Group has a wealth of such specialized organizations, we will collaborate with them to further raise client expectations.