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Bringing integrated facility management services to South East Asia

Interview - April 25, 2019

In this interview for the Worldfolio, Mr. Ryusei Kajiyama, President of Biken Techno Corp., provides a unique insight into his company’s history, philosophy and the business model that makes the success of his firm.



Can you give us an overview of BIKEN TECHNO’s recent developments?

My father established Biken Techno in May 1963. At the beginning, we were but a handful of workers, a small group of people motivated to succeed. From its humble beginning, Biken Techno has grown into a corporation of more than 5,000 employees supporting a multitude of customers in Japan and abroad.

For the next 8 years, the strategy of the company is to create a stronghold in the ASEAN region. Up until now, our involvement in ASEAN has been successful. To put it simply, it is a necessary investment to ensure the sustainable development of our company. Our competitive advantage in all the business segments we serve is: high-quality service. Our high standards are implemented across all our activities to ensure that the Japanese commitment of “client care” is transmitted to all our customers. Our major segments are facility management and maintenance services.

Since our expansion in Singapore 8 years ago, we realized that our experience in Japan allowed us to deliver high-scale, high-quality services. Wherever we operate, be it in Japan, Singapore or in any other oversea location, we apply our extensive knowledge to the market at hand. This expertise allowed us to experience a surge in demand while receiving positive evaluations from our domestic and international customers. Our track record shows that we matched and exceeded our customers’  expectations.

Currently, the level of quality and service we provide in Japan is high. We'd like to keep the same bar of performance and translate it to other countries in the ASEAN region. We're not only talking about service provision, but also wellness. There's definitely a gap between the Japanese lifestyle and the wellness level of developing countries. As long as this gap exists, we feel it is our duty to fill it by providing our services.

Due to Japan’s ageing society we face several problems, such as labour shortage. To prepare for such issues, we already have a vision for the next several years. Three years ago, we started our expansion to Vietnam and to the Philippines. We established satellite companies and invested capital into local affiliates. To train our overseas personnel, we transferred them to our local offices in Japan and taught them how to deliver a similar level of performance.

To counter the declining workforce, we have invested in robotics and automation to increase efficiency and lessen human dependence. All combined, the company is looking forward to its bright future.


How did you adapt to the “ service gap” between Japan and ASEAN? What made Biken Techno able to perform in Japan and abroad?

Prior to 2011, the Japanese construction industry prioritized the “scrap and build” approach when it came to building management. “Scrap and build” means that when a building began to decay, it would be destroyed and a new one would be erected. About 8 years ago, the Tohoku region was hit by an infamous natural catastrophe: “The 2011 Great East Japan Earthquake.” This disaster transformed the construction industry’s mentality as to building management and maintenance. Consequently, the “scrap and build” approach was abandoned in favour of long-term, sustainable building constructions. Nowadays, newly constructed buildings are meant to last over 100 years. As a result, maintenance has become more important than it ever was. For a facility to be sustainable on the long term, it requires proper maintenance.

In Singapore, we faced a major difference as the tendency is to dissolve the entire facility and build a new one.

To be successful in Japan and abroad, our focus isn’t solely on building maintenance. We also pay great attention to our attitude towards customers. This includes respecting the set time frames for completing projects. Doing things on time and in order is the Japanese way. For example, each time you enter a building, there is some kind of facility where you must take off your shoes and line them up in a beautiful state with no mess. This example embodies Japan’s attention-to-details and customer care philosophy. Sanitation-wise, it's not allowable for business owners, particularly higher ranked managers, to face customers and talk to them while sweat is dripping off their shirts. It's a hot country so people have to keep themselves in a good state. Appearance is key.

The competitive advantage of our work is linked to our notion of hospitality: the “omotenashi” spirit.


Could you give us a brief overlook of the Japanese real estate market and the trends related to it?

Investing in the Japanese real estate market is increasingly lucrative, and there are three main factors for that. Firstly, the value of the Japanese yen towards the dollar has been kept relatively low, making purchases interesting. Secondly, Japan shows a steady investment yield, with a net operating income at 4% approximately, making it higher than many other countries while the initial cost of purchase is cheaper than most markets. Thirdly, the country itself is safe, secured and peaceful. Investing in Japan has proven to be stable and to deliver long-term profit.


What do you believe will be the influence of the Japanese 2020 Olympics on your industry?

The two years leading to the Olympics will create an upside for real estate. Even after the events have taken place, the “after-party” syndrome will trigger positive developments for years to come. We see a solid perspective in that matter and our influence will be significant. Practically speaking, this growth will affect large towns, such as Tokyo and Osaka. We are already seeing an increase in property price especially for commercial facilities, hotels, and condominiums.


In the first quarter of this year, Tokyo overtook London in terms of total value as the most traded city in the world. Despite that fact, we saw that the number of foreign investors represented a lesser amount than in London, New York and even Paris according to recent statistics. What must be done to attract these foreign investors that are reluctant to invest in the Japanese market?

There is still room to grow in terms of infrastructure for business, particularly in regards to airports or railway stations, which will have to be improved to appropriately represent Japan as the host country of the next Olympics.

Getting back to our history, Japan has been secluded for a long time and foreign corporation may be worried to invest due to the language barrier and cultural differences. This can be easily observed in the leisure service where Onsens are closed to tourists with tattoos. What scares investors the most is cultural misunderstanding.


Today you're a major Japanese corporation in the facility management and maintenance industry. You're traded in the first section of the Tokyo Stock Exchange. Back in 1963, you began as an independent Japanese building maintenance company. Could you quickly run us through the evolution of Biken Techno and some of the main events and milestones that have changed the history of the company?

Biken Techno began as a specialized cleaning service provider. Our first achievement occurred in 1964, as we won the bid to become the outsourcing company in charge of handling cleaning services for the horse-race tracks in Osaka. The horse-racing stadium was a large facility and we had limited time to finish our cleaning duty. Consequently, we required a great amount of staff members to finish our cleaning duty on time. But since horseracing only occurred on Saturdays and Sundays, our large workforce was idle during the week.

In 1970, there was an international exhibition held on weekdays called the Banpaku Expo. Thanks to our track-record and qualified staff, we were able to secure a partnership with the American Pavilion of the Banpaku Expo. As a result, the large workforce deployed on weekends for the horse-racing was also mobilized for the American Pavilion on weekdays.

After several events in Kyoto, we established a positive relationship with the American embassy. The American ambassador highly evaluated our services and our connection with him allowed us to perform at airports. My father started this as a family business and our services were introduced to Haneda Airport thanks to the American ambassador. At the time, we provided on-flight cleaning services.

Providing dishwashing services inside airplanes started from the exposition in Osaka. There was a chance to move onto higher scales to introduce cleaning services inside airports. There were certain risks we could not take so we started off small and only provided dishwashing services inside airplanes.

I used to work at Sanwa Bank, which has now merged with UFJ. In 1995, I joined this company. Since that time, the company started expanding to new businesses and exploring new opportunities.


When you arrived in the company in 1995, were the company's main activities still related to cleaning? How and why did diversification happen and what was your role in it?

Back in the 1990s, the system was changing. The greater expansion of WTO and foreign participation in the service and property management business transformed our industry. Foreign investors received more freedom and started attending Japanese bidding by themselves. Our former management had the vision that something needed to change. The rivalries that were occurring at the time caused them to expand the business beyond real estate management and property management. They started to explore what else could be used in building management and what the sole purpose of a building was.

The facility management services we provide can be divided in two sections. The first is the “Hard Side,” which implies taking care of the hardware of the building itself. The second is the “Soft Side,” meaning services to the human beings that visit or work in the facility we maintain. In our business line, taking care of people -not just hardware- is a crucial factor for success.

We are currently involved in the revitalization of buildings and facilities in Matsudo city, where we oversee building maintenance as well as construction. Our clients request us to provide ideas on how to revitalize the building. For example, we proposed to set up a food court, which are more adequate to working people, instead of restaurants inside the building. We define this line of work as a “value-added business,” where we suggest to rebuild or reform a given building to add-value to its facility offering. As a result, we do not just handle the cleaning and maintenance, but we also provide consulting services.

That happened to be the diversification of the company's business. Our role was similar to that of an owner who manages both the outside and inside of the facility.


What are the competitive advantages of your firm?

The appealing point towards potential customers and investors from overseas is that we are a "One-Stop Service". The investor doesn't have to be physically here in Japan. They could be any place in the world. Even from a distance, we provide the same level of response and feedback as if we were in the same country. We might say that we compare ourselves to the conglomerates or zaibatsu in Japan, but being independent gives us flexibility compared to other companies and that's the strength of our firm.


How do you benefit from the synergy and complimentary of all your business segments?

At Biken Techno, our major business is facility management. There are several branches that expand from that. Many activities can be classified under facility management. To create synergies between our segments, we collect information on each level of the company's management. We analyse information from major offices and satellite companies, management facilities, hotels and nursing centres. We centralize the acquired information and formulate solutions to enhance our service level and reactivity. I myself check this on a daily basis and focus on the bad news because bad news works as a signal to make something better. That is how we do business here and having the ability to share this information through different areas of the company makes it easier to synergise.


How would you convince a potential client to choose Biken Techno for their real estate needs?

In comparison to other companies, we provide timely and sharp decision making skills. One of our major sales points is to offer high-quality, sustainable services at a reasonable price. In the realm of Integrated Facility Management, we are the industry leaders in cost-efficiency and value-for-money. This is why people love our brand. We are also a historical company with unparalleled know-how in sanitation service. Throughout the years, we have won the trust of our loyal customers by fulfilling all their expectations.


Keeping on the topic of your diversification, it has allowed you to touch a large clientele. On the one hand we find individual business owners. On the other hand, we find specialised clients such as in the medical sector or the food industry. What allows Biken Techno to cater for such a large clientele?

Let's start off with the company’s philosophy. At Biken Techno, we propose the highest quality of building management based on our “customer first” philosophy. All of our services are order-made and we stand alongside our clients to guide them through the process. We make our services as easy to apply as possible. We tend to go into challenging territories that are hard to fulfil for other companies. That helps us win the trust of our customers. Times are changing and the previous generation of company owners, such as my father, were facing different struggles. We are complying to the social problems of modern society, and that is our company's strength.

Secondly, our company successfully engaged in governmental matters and outsourced our management services under the PFI model  (Private Finance Initiative).

By successfully analysing and responding to rapid changes in the market, we have been able to adapt and cater for a variety of clients.


Would you run us through your strategy to continue with the corporate growth that is to come?

The strategy for the company's further growth is to reduce administrative costs while increasing asset value. Having said so, the company is trying to keep up the existing businesses and improve them while attaining a new level of quality.

Furthermore, multiplying our activities portfolio and expanding it to other businesses, such as governmental facilities, is a priority.

To achieve these objectives, we will strengthen our nationwide deployment and labour force.

For the future, we will respond to the needs brought about by Japan’s internationalisation.

Integrated facility management originated in the USA and the EU. At Biken Techno, we replicated that business model but added a Japanese touch to it.

A firm doesn’t just take care of construction, it also handles security, maintenance and operations. Each division of the company is responsible for different parts of facility management. In the US, the operator also provides consulting services to assist investors; which is something missing in Japan. This transition could be the next step for our company. We're trying to transform into a fully-integrated service provider, including consulting. That transition has to happen smoothly and reliably, with high quality and low cost so that no business will be lost.


As you mentioned your company has been moving around when you opened offices in Singapore in 2011. Since then we have seen your expansion into the Philippines and more recently, in Vietnam. Can you tell us more about your plans for overseas expansion, and what are the competitive advantages that Biken Techno brings to these foreign markets?

Currently there is no country that comes to mind as a candidate for future expansion. Of course, we already have subsidiaries in three South East Asian countries, namely Singapore, the Philippines and Vietnam.

To be successful overseas, we must think global but act local. Our strategy is to tailor our approach to the particularity of each market. So instead of “globalization,” we believe in “gLOCALization.” As the population in ASEAN is expected to grow exponentially, it represents a great opportunity to offset the problems created by Japan’s declining birth-rate.


You became the president after your father created this company. When you will retire, what legacy do you wish to leave behind at Biken Techno? What do you hope to be remembered for?

Next week, I will go to Silicon Valley in the US. The last time I went there was 20 years ago. You can see that drastic changes happened, especially in regards to new generations. With the introduction of iPhones and cell phones, the amount of information shared and transmitted is greater than ever before. Today, you can expand your vision and practically exchange information at a speedy level. That has to be observed and it has to be taken into consideration. I would also like to convey to the new generation that it is important to be tough. Even if you're exchanging information, it has to be solid and confirmable information.

Furthermore, I want to leave behind sustainable facility management principles. The success of Biken Techno resides in its high quality expertise. This experience has been transmitted from father to son, and it is my responsibility to perpetuate it. My father and I go to Ise every month to pray for good fortune in business. Along with our corporate results, we pray for the wellbeing and satisfaction of our employees. At Biken Techno, we believe that our employees are the most important asset we have. Thanks to our stable business foundation and the devotion of our employees, the future ahead is bright.