Bringing Japanese Construction Expertise Abroad

The structural problems of Japan, the negative demographic line and ageing population, have made the policies of Abenomics focus on attracting more tourist while pushing for a stronger presence internationally. Under Minister Abe, Japan will spend 6.2 trillion yen ($61 billion) on infrastructure to further enhance the country’s connectivity.

Following our demographic decline, Prime Minister Abe has articulated reforms to transform our working ways and to create a new capable workforce. So far, elderly people and women were not actively engaged in the labor market. Under Abe’s policy however, elderly people and females will begin taking greater roles in society and will serve to compensate for the shrinking amount of workers.

Up until now, Japan’s primary strategy in the fields of manufacturing, trading, logistics and more, was to grow domestically. Due to this ethnocentric vision, we encountered problems in terms of labor cost and market expansion. This historical reliance on our domestic market led us to be labelled as a “Galapagos Island.” To answer this issue, Japanese organizations have made large monetary investments to increase their oversea networks in African and South East Asian countries. By using this international network, we can stimulate our economy and create great opportunities for logistic companies.

Since the global financial crisis, both China and Japan have been intensifying their expansion of overseas investment, with a prominent focus on infrastructure. As Jianping Zhang from the Institute of International Economic Research explains it: “China competes on easy capital, cheap price, swift implementation and developing country experience.” From your point of view, what is the difference maker of Japanese infrastructure and construction firms?

Up to 150 years ago, we shut our country to outsiders and developed little networking with foreign nations. When Japan opened and broke away from isolation, the economy grew with rapid speed and developing ports became a necessity in order to increase trade with international economies. Japan is a small island nation with severe natural conditions, such as earthquake, tsunamis and difficult land. In order to sustain our country from natural hardships, 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 disaster is a strength and a competitive advantage we wish to bring to the world.

The global construction industry is projected to grow at an average annual growth rate of 3.9%, passing from US$8.5 trillion in 2015 to an exuberant US$10.3 trillion in 2020. Led by an ever-growing middle class, the emerging markets of Africa and Asia are to bolster by an astonishing 5.3% year-on-year. For Japan Port Consultant, which international markets are to be prioritized upon and why?

For many years, Japan experienced incredible and unprecedented economic growth. Back in the 70’s, our GDP grew by 8% per year. During that period, we acquired skills and techniques that transformed us into a knowledge base economy and an added-value manufacturing nation. As our land lacked natural resources, we imported raw materials and processed it inside the country before sending it abroad from our ports. Following this pattern, we developed port and its surroundings as “packages;” or giant economic zones that link ports with factories, logistic centers and more. This “package model” allowed us to drastically grow our industry and today, it has the potential to be exported to South East Asia. We have the expertise to assist neighboring nations in building a powerful industry based around ports. Furthermore, we can provide guidance and consultation as to daily operations, repair and maintenance.

Can you highlight the key milestones achieved since inception?

Japan Port Consultants has an extensive track record with more than 24,000 projects conducted. Since our history dates back to Japan’s Post WWII development, we have achieved and survived through a multitude of achievements and catastrophes. This long history has been filled with important events and it is complicated to pick out  “clear milestones.”

There is one event that stands out though, and surprisingly, it is not a port: The design and construction of Kansai Airport. This project has been highly evaluated and regarded internationally. In the USA, an American association awarded us with the “Premium Monument reward,” a prize that celebrates the success of epoch-making construction projects. They awarded this prize to the panama canal or the hoover damp for example. Domestically and internationally, Japan Port Consultant’s work is respected and recognized.

As Japan’s land is limited, many places are inhabitable. Because of noise and other complains, it is illegal to develop airports with sky routes flying over our land. Consequently, we had to develop Kansai airport 5km away from land and on the sea. As the airport is literally in the ocean, the building conditions were extremely severe and difficult. Many American peers called the project “fantastic, yet crazy!” The reason why they believed it to be crazy is because they did not understand why, where, and how we could conclude such an infrastructural project.

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 Japan’s technical uniqueness.

Today, Japan Port Consultants is more than a port developer. In recent years, you have diversified your activities into environmental engineering, infrastructural consulting (roads, bridges), waste treatment, river management and more. Can you give us a quick overview of your services? What are the competitive advantages that this array of services allows for?

25 years ago, a massive earthquake hit Kobe prefecture, greatly damaging the Kobe port. At the time, it was the second biggest Japanese port in activity and the earthquake was a massive hit for the country as a whole. Back in 2011, The Great Eastern Japan Earthquake damaged many ports in Tohoku and around the entire nation. Within five years, these two ports were totally renewed and the newly repaired facilities are today better than they were before being hit by this natural catastrophe.

Our business diversification is closely related to our way of life. While Osaka and Tokyo are our biggest cities, the Japanese population is dense in a multitude of areas and every type of social and civic request must come from the sea, including ports. Sewage systems, garbage treatment, water treatment… all these activities are related to ports. At Japan Port Consultnats, we use our track record and commit to the development of bay areas.

For example, in the field of power generation we import natural resource such as LNG and Coal to be processed domestically. From a logistics point of view, efficient management cannot get done in land and must pass by ports.

Another example is garbage treatment and disposal. As our land is limited, we developed artificial islands to dispose and treat trash.  Japan has always expanded its technology and facility by the sea. After developing these artificial islands, people utilize them and that creates the need for bridges, and so we develop bridges and roads to connect the island. This accumulation of needs has forced us to learn a multitude of skills.

Key points that you look at prior to investing.

Ten years after our foundation in 1961, we expanded our business to Sri Lanka, which was our first international track record. It was the first example -not only as JPC- but in the sector as a whole, of going aboard. There was an incentive for us to utilize our technology to overseas right from the start. Many Japanese people’s mentality is to be inward looking. However, we at JPC are expectational. We have conducted a variety of port works, so if we look inland only, there is no work for us! We have accumulated international experiences right from our beginnings and our staff has an acute know how of oversea markets. We have people that lived abroad, studied abroad and worked in foreign nations. This outward looking workforce forces us to look abroad; it is simply embedded to in our DNA.

What are the differences between working in developed and developing economies?

We have accumulated experience in developed and non-developed nations. When we work in developed countries, we always learn something from them. When we work with developing countries, we always teach them something. Therefore, we are able to learn and teach for the betterment of our world. When we conduct projects, our mission is to educate people. Educating people is not limited to the domestic market only, for it involves the people we employ and collaborate with internationally.

What are your competitive advantages?

The technological skills of our staff, the wide network we have established and our historical track record are our competitive advantages.

Through its 57-yearlong track record, Japan Port Consultants (JPC) has contributed to the technological development of port and harbor facilities in Japan, hereby accumulating an extensive knowhow that facilitates the application of state-of-the-art technologies to relevant construction works. This historical expertise is put to good use for overseas port development projects that count on Japanese Official Development Assistance (ODA). In the future, we, at JPC, desire to provide high-quality consulting services for overseas projects implemented by private enterprises.

What are your ambitions for the future?

The years leading to 2020 will unfold at rapid speed. Post-Olympic Games, economic growth will return to flatness and the economy will have matured once more. The Japanese mentality is a “soft one,” one that includes living in harmony with people and nature. Therefore, I would like to bring the Japanese “soft mentality” to the world.