Building Japan's Future with Sustainable Construction Materials

When pundits look at Japan’s construction industry, they look at it through two lenses. First is the aging infrastructure and we are a far cry from the construction boom associated with the 1964 Olympic Games, with many buildings in need of maintenance, repair, renovation, and upkeep. On the other hand, we have Japan’s aging and declining population, meaning that outside of urban centers like Tokyo and Osaka, the number of new construction projects has steadily decreased. What is your take on the current needs of Japan’s construction market and what do you anticipate as the new needs for the years to come?

I agree with you that buildings are becoming much more obsolete recently, especially outside Tokyo, Osaka, and Nagoya. These areas in particular are seeing a number of reconstruction projects, so I do believe there is currently a rebirth of buildings. I believe that there will be a wider gap between urban areas and rural areas in terms of reconstruction which will be taking place. If we try to rebuild these kinds of obsolete or older buildings in rural areas, we will have budget issues as well.

Within our industry there are various targets, one is for private real estate and the other is for commercial buildings as well as offices. In terms of commercial and office buildings, I think the demand is going to increase shortly, however, I don’t think it is going to be as simple as observing growth in real estate and that is because of the demographic changes and the decline of Japan’s population.

The argument can be made that the cost is higher in the short term to use Japanese materials, over time given their durability and high-quality as well as the added value properties, Japanese materials can be a more cost-effective option. In your opinion, what do you think are the competitive advantages and unique aspects of Japanese construction materials when compared to materials from Asia, Europe, and the United States?

In terms of the overall framework of the gypsum industry I think there are no major differences, however, in the Japanese market domestically I think it tends to be compared to the whole world and Japan is a bit more of a closed-off society. Other parts of the world have their standards just as Japan has its unique standards in terms of gypsum boards and also industrial materials. The look and the shape might be quite different.   

In the United States as well as Japan there is something called drywall, and globally it is more common to coat the putty material all over the board initially on top of the gypsum. In Japan, it is more common to have wallpaper directly applied to the drywall without a coating material. The demands are different depending on the point of origin.

Knauf is a company you’ve been working with for nearly 20 years now; since 2006. Could you tell us more about that relationship and what synergies you’re able to leverage now that you have joined the Knauf group last year?

Chiyoda Ute is now a full member of the Knauf Group, which is the global leader in our industry, not only in APAC but as well worldwide. There it has been understood that Japanese customers prefer continuity over disruption, which is why it was decided to continue the Chiyoda Ute brand directed to Japanese customers. The change of ownership allowed us as well financial stability and increased investments in the factories and internal processes. As president, my main job is to represent Japanese customers, while our Knauf-designated CEO is in charge of strategy, results, sales, manufacturing, and administration.

Earlier you mentioned this urban-rural split, and I think this is something that is often overlooked when talking about Japanese demographic trends. There has been intense urbanization over the last 20 years in major cities in Japan, and obviously, we are going to see new kinds of needs from construction and real estate companies to compensate for the greater concentration of people. I think some of your products have added value functions that fit this bill very well, for example, your Sound Insulation boards which is a sound absorbing material. Could you talk to us about how your materials are best suited for these kinds of highly urban environments as we see in Japan?

We do have a track record of selling products from Knauf and the AQUAPANEL as well. The product you mentioned isn’t an official product of ours but we do sell it alongside our gypsum board offerings, acting as an agent in collaboration with Daikin.

Do you find this role you’ve taken as an agent for other products is something you’re looking to put more energy into?

In terms of our business, our utmost importance is to answer to domestic demands. The Knauf Group is better prepared to work on the international level.

Just last week there was a pretty big earthquake in Chiba, and it is amazing how Japanese people seem to just shrug these seismic activities off. Can you talk to us about how your products and technologies are supporting Japanese people and creating a safe environment that can allow that level of nonchalance?  

I think there are two areas where we apply our gypsum boards; those being the ceilings and walls. For walls we do not have to be that attentive to earthquake resistance standards, however, for ceilings, we need to be very careful. There are various types of construction methods and application methods that we have to think of for gypsum boards. Alongside the gypsum boards, we also search for profiles of lightweight materials for the foundation as well so that we can meet standards. Not only are we researching internally but along with our manufacturers we think about these kinds of construction methods.

When the Great East Japan Earthquake happened in 2011 there was an issue with ceilings falling down, so I think it has become a goal for the country to raise awareness and rethink anti-seismic standards. Every manufacturer in the industry is trying very hard to face this issue.

At the forefront of all industries right now we have this issue of environmental consciousness. Construction accounts for more than 35% of CO2 emissions and the former administration of Mr. Suga said that by 2050 Japan must be carbon neutral. In the midterm, the strategy is to reach a 46% reduction by 2030, and we are seeing big general contractors (GC) taking big action, but in terms of smaller companies like yourselves, we are very curious to know how your business is reacting to this. Obviously, there are two elements; you can use recycled materials for your gypsum and you can also create a seal for an environment, preventing the escape of heat and cool air. Could you speak to us about your technologies as it relates to environmental friendliness and how you are contributing to carbon neutrality?

In terms of environmental consciousness and the emission of energy, we are of course conscious about using recyclable materials and we are trying to think up other methods to reduce CO2 emissions to as low as possible. In developing these kinds of products and methods we are also conscious about producing and reusing materials derived entirely from recycled gypsum.

To find ways to solve these social issues and what we are currently number 1 in the world at is the creation of circular systems where we can turn a portion of waste gypsum directly back into material gypsum. That is something that only we can do right now in the world which I feel is a fantastic edge we have over our competition.

Is the ultimate goal to have 100% of your material recycled?

In terms of gypsum, we are already very circular, with some boards being 100% derived from recycled gypsum, but our paper is a portion that is recycled. Some of our gypsum, it is used as an ingredient in cardboard as well, which we consider upcycling. Additionally, we are using some of this recycled material as a heat source in our biomass boilers. We try not to use and consume fossil fuels but instead wood chips from demolishing wooden houses. By using waste gypsum as well as wood chips we try to answer environmentally friendly needs.

On June 1st, 2023 we proudly launched Chiyoda Circular Boards (CCB) to answer social needs. There are two elements to the CCB. First of all, it is 100% derived entirely from recycled gypsum, so in terms of material, it is environmentally friendly. The second element is the fact that during the construction phase, only sustainable energy sources are used. Although this is the first step, I think it will become a great strength for our company in the future.

CHIYODA CIRCULAR BOARD
World First Gypsum Board made out of 100% waste gypsum

You’ve mentioned a couple of times how meeting the needs of the Japanese market is your focus, producing your products as well as acting as an agent for overseas products, bringing them to the domestic market. How do these kinds of partnerships come to be, and are there any other overseas makers that you are interested in making contact with?

There is nothing new in particular that we are considering right now, and our role right now is to expand the introduction of our gypsum boards within the internal Japanese market. Of course, if there are any opportunities to introduce Knauf products to Japan then we would be willing to follow that as our role in the group.

Imagine that we come back on the very last day of your presidency. Is there a goal or dream that you would like to achieve before you pass the baton onto the next generation of Chiyoda Ute executives?

We just introduced to you our CCBs and the company as a whole would like to continue to answer the needs of the market moving forward. Answering those broad needs in the domestic market of Japan has always been a mission for Chiyoda Ute, and I think it will continue to be the mission of all our personnel and myself too. If we are able to provide our clients with more options, we will gain their support and become many clients’ first option, which in my opinion is the best thing we can wish for.