The Kumagai Gumi Group Corporate Report 2018

The Kumagai Gumi Group Corporate Report 2018

Insight,
Insight,
Onsite,Onsite,Farsight
Farsight

The
The
Kumagai
Kumagai
Gumi
Gumi
Group
Group

2018
2018
Corporate
CorporateReport
ReportOur Company’s Code of Conduct (Mission Statement)●●●

TRUST:
To develop client trust and earn their confidence.
CONSISTENCY:
To be consistently professional and responsible.
CO-OPERATION:
To promote cooperation and mutual prosperity.

Management Philosophy
●

●

●

●

ENVIRONMENT We aim to use our breadth of expertise to design and construct projects, which
are environmentally-friendly and which will improve the quality of life and satisfy the needs ofsociety.
CLIENTS We aim to be an innovative and dynamic company, one that can provide our clientswith a comprehensive service of consistently high standards, tailored to satisfy our clients’
individual requirements.
STAFF
We strive to be a progressive and nurturing company, offering each individual theopportunity for personal growth, pride, and satisfaction in his or her work.
REPUTATION
We strive to be a responsible corporate citizen, recognized for our businessintegrity and social awareness.

Table of Contents

Mission Statement, Management Philosophy and Editorial Policy_ ____ 2
The 120-Year History of Kumagai Gumi______________________________ 4
The Kumagai Gumi Group's Value Creation Process__________________ 8

Financial and Non-Financial Highlights ______________________________ 10

Growth Strategy____________________________________ 12
The Medium-term Management Plan (FY2018-2020):
Strategies for Accelerating Growth__________________________________ 12
Top Commitment_ ___________________________________________________ 15
Group Power________________________________________________________ 20

Insight________________________________________________________ 22
Technology Development System_ __________________________________ 23
Technology to Create Social Value__________________________________ 24

Onsite________________________________________________________ 26
Aiming to Be No.1 in Safety, Quality and Environment Management___ 27

Farsight_____________________________________________________ 32■ Worksite Excellence to Farsight: Large-scalereconstruction work for the“sand flow-through dam
operation”to support the future of hydroelectric power
generation_______________________________________________________ 33

Editorial Policy

Corporate Governance_______________________ 36

This Corporate Report is issued with the goal of communicating the Kumagai Gumi Group’s management policies, businessstrategies and CSR efforts to all its stakeholders. It is offered from the three perspectives of our group vision: 1. “Insight”,
2. “Onsite”, 3. “Farsight”. It features Kumagai Gumi Group’s concern for the environment and efforts to provide solutions
to social issues. It also strengthens corporate governance, thereby actively contributing to the formation of a sustainable
society.

Period of Reporting:

FY2017 (April 1, 2017 to March 31, 2018)

The information in this report includes some cases after April 2018

when necessary.

Scope of Reporting:is in Taiwan. The references in this report to “Kumgaigumi Gumi,”

or “our company” are used to report on Kumagai Gumi Co., Ltd. only.
When it comes to its group companies, the name of each company

Reference Guidelines:●

Environmental Reporting Guidelines (2012 Edition) by the Ministry●

IIRC International Integrated Reporting Frameworkof the Environment

2

Information on the website:

https://www.kumagaigumi.co.jp/en/index.html
Notes on the Outlook for the Future:

Gumi in Japan only, while other construction data is provided bybased on data currently available to us and certain assumptions

joint venture projects with Kumagai Gumi as the lead company.

Organizational Chart_ _______________________________________________ 41

for August 2019)is used to report on it. In reporting on conservation activities, con-struction data is provided by the projects undertaken by Kumagai

Risk Management_ __________________________________________________ 38
Corporate Information and Stock Information________________________ 40

Issue Date:
August 2018 (Previous Issue: August 2017; Next Issue: Scheduled

The scope of this report covers Kumagai Gumi Co., Ltd. and its

seven group companies, six of which are in Japan and one of which

List of the Board of Directors________________________________________ 36
Corporate Governance______________________________________________ 38

Opinions and other forward-looking statements in this report arethat we believe are reasonable. Actual results may, therefore, differ

materially from these statements for various reasons.

The Kumagai Gumi Group Corporate Report3Meeting
the Expectationsof Society

120

The

-Year

History of Kumagai Gumi

Since its foundation in1898, the construction company Kumagai Gumi has been making efforts to extensively contributeto the development of Japanese society through its core business of construction. It has already contributed to themodernization of Japan from the late 19th century through the early 20th century, as well as to the rehabilitation of wartorn Japan and the remarkable postwar economic growth.
Although we have had a difficult time for nearly 20 years since the burst of the bubble economy, we have been able
to celebrate our 120th anniversary this year. It is unquestionably the result of the warm support from our loyal customers
and clients. We will further enhance our own Worksite Excellence that we have gained over our century-long history as
the product of our solid technology and human resouces by working diligently. We believe that this enables us to create
the quality that inspires happiness, and to construct buildings that continuously satisfy people who use them. Kumagai
Gumi will continue to contribute to the development of society together with its customers and clients, aiming tobecome a comprehensive construction service company.

The Sanshin Railways Opens Its Entire Line.

In 1934 Santaro Kumagai received an order for theconstruction of the Sanshin Railways, which is currently
part of the JR Tokai Iida Line, connecting the areas Mikawa
in Aichi Prefecture and Shinshu (Nagano Prefecture). The
construction was said to be incredibly dangerous andno one believed that it could be completed. However,Santaro’s passion for its construction and his eagerness tomake a contribution to the people in the area made him
determined to take the order.

Omachi Tunnel in Kurobegawa No.4
Hydro Power Plant Opens.

This effort was said to be the most difficult
construction project of the century. Kumagai
Gumi undertook the construction of Omachi
Tunnel, which is currently named Kanden Tunnel.
The construction proceeded at a good pace until
we hit a crushed zone in May 1957. Rock in the
crushed zone is hard to drill through due to its highcompressive stress and the fact that it contains agreat amount of water. It took seven months forthe construction team to penetrate this zone. The
construction and the challenge our workers facedin the ‘Great Crushed Zone” was later made into amovie named “The Sun of Kurobe (Kurobe no Taiyo)”
which was released in 1968. Kumagai Gumi gave its
full cooperation in the making of this spectacularmovie and offered one of its factories to be used asa set for filming.

Construction of the Plover
Cove Water Tunnel in Hong
Kong Is Completed.

In 1961, Kumagai Gumi received its firstorder from overseas for the construction of
the Plover Cove Water Tunnel in Hong Kong.
This was the first commercial construction
project that a Japanese construction
company had ever done. The project
became a stepping stone for the company
to expand its business abroad especially in
Taiwan and Southeast Asia.

1958

1945: Architectural Construction Department Launched.

Follow the tracks of our values that led
to the next generation of construction

1937■ The History of the Kumagai Gumi Group

1898〜1920
Start-Up Period■ The Kumagai Gumi Group’s
Credo and Guidelines

1941〜19604

1921〜1940

The Wartime and Postwar Period of Recovery

The Initial Growth Period

In 1975 Kumagai Gumi started
construction of the Shinjuku
N o m u r a B u i l d i n g i n To k y o .
and the company successfully
finished the construction of theskyscraper with 53 floors and fivebasement floors. The completion
made Kumagai Gumi the firstJapanese construction company
to build a skyscraper on its own,
which greatly enhanced thereputation of the company.

1966

1978

1963: Kumagai Road Co., Ltd. was established(Currently GAEART Co., Ltd.)

1974: Taiwan Kumagai Co., Ltd. was established.
New headquarters building opened.

1961〜1980
The Second Growth Period

1963

1946
1939

Establishment ofCompany Rules andRegulations

Founder: Santaro Kumagai

1957: The Kumagai Gumi baseball team won its first
victory in a nationwide tournament.

1958: Toyokawa Factory opened (currently Technos Co., Ltd.).
1938: Kumagai Gumi Co., Ltd. established

1898: Kumagai Gumi is founded.

1954: Headquarters Building Opened.
(After the Tokyo Branch office)Construction of the
Shinjuku Nomura
Building in Tokyo Is
Completed.

On New Year’s Day 1939, Santaro
Kumagai, then President ofKumagai Gumi, established thecompany rules and regulations. At
that time, 90 employees including
seven executives pledged further
efforts on behalf of the company.

Establishment of Our
Mission Statement

The company rules and regulations
were revised and incorporated
this Mission Statement: “Trust”,“Consistency”, and ”Co-operation”.
To this day, principles have been
passed down to new generations
and remain reflected in our corporate
activities.

Revised Version corporate
logo
Some revisions were made to theoriginal corporate badge designed by
Santaro Kumagai and Jin-ichi Makita
at the time of its founding. The new
badge became very close in design
to the one we wear now.

Logo atthe time offounding

After revision

Related info > P. 2

The Kumagai Gumi Group Corporate Report5

Kumagai Gumi Group Vision Statement

New City Higashi
Totsuka Project Is
Launched.

The Eastern Harbor Crossing (EHC)
Tunnel in Hong Kong Opens.

Since Kumagai Gumi took its first order in Hong Kongin 1961, the company has undertaken more than
60 construction projects in the region. Out of theseprojects, the construction of the EHC Tunnel, which
was completed in 1989, attracted the most nationwide
attention both in Japan and Hong Kong as the first BOT*
project in which a Japanese company was involved in
Hong Kong.

This project was the largestscale urban development inJapan by the private sector.
Having been involved in thedevelopment of towns andcities for a long time, Kumagai
Gumi built four super- highrise residential buildings
as well as approximately
100 buildings in the vicinity
including 4,500 residential
units and environmentallyfriendly commercial buildings.

*BOT stands for Build, Operate, and Transfer and is a formof project financing where a private entity receives
a concession, usually from the local government, tofinance, design, construct, own, and operate facilities
for a certain period of time before transferring
management of the project to the government.

1981

1991: Our corporate basketball team won its first victory in theJapan League.
1993: Kumagai Techno-Space Co., Ltd. was founded.
(renamed Techno-Space Creates Co., Ltd. in 2000)
1995: Technical Support Co., Ltd. was set up.

1996: The Toyokawa Factory spun off as Kumagai Technos Co., Ltd.
(renamed Technos Co., Ltd. in 2002)
1998: The celebration of our 100th anniversary

1981〜2000

Since the establishmentof its mission statement,
Kumagai Gumi’s business has
been greatly expanded andthe scale of its projects has
become larger. In order toclarify our values and sharethe direction and goals of
the company once again,
our management philosophy
was formulated so that it
could survive competition
from other companies andmaintain steady growth in
the future.
Related Info > P. 2

2004

1998
The Customer
Satisfaction
Promotion Office
Is Created.

This department was set up
to further increase customer
satisfaction. Since 2002, it has
made posters to be placed in
all the company’s offices sothat every employee can bereminded of the importanceof customer satisfaction. All
our activities demonstrate
the company’s strong will tosatisfy its customers.

When we build a structure, we build a community –together with the people who will use that space.
Kumagai Gumi constructs and maintains structures where people can congregate and live fulfilling lives while feeling safe
and secure. This is our job, our mission.
We deliver Quality that Inspires Happiness by optimizing construction for the people who will use the built space. Whenputting plans into practice we apply our unique concept of Worksite Excellence – the powerful synergy of our technology andhuman resources.
Our relationship with our structures continues beyond physical completion. It includes ongoing operation, maintenance,
renovation, and restoration. With this ever-ready support, our structures serve as the timeless stage where each generation
performs their part in life’s ever-evolving story.
Insight, Onsite, Farsight

2001: K&E Co., Ltd. was founded.

2004: GAEART T. K. Co., Ltd. was launched.
(renamed GAEART Co., Ltd. in 2016)2010: First to be certified as “Eco-First Company” inthe industry by Ministry of Environment.
2017: Entered into a business alliance with
Sumitomo Forestry Co., Ltd.

We feel a deep responsibility to our clients – built on mutual trust and collaboration – that we have nurtured over ourhundred-plus year history. In this spirit, we are committed to taking on the fresh challenges the future will bring.
Working with people, creating community.
Setting the stage for tomorrow to unfold.
Kumagai Gumi Group

2018: The celebration of our 120th anniversary

2001〜 The Present
From the Economic Slump to Revival

From the Third Growth Period throughthe Long-lasting Economic Slump

Our management
Philosophy Is
Established.

The Taipei 101 is a landmark skyscraperin Xinyi District, Taipei, Taiwan. The nameof the building comes from the factthat it has 101 floors. It was the world’s highest building at 509.2 meters asof 2004 when the construction of thebuilding was completed after a sevenyear construction period.

1989

1985: Our company received more than one trillion yen’s worth oforders, which resulted in the biggest ordinary income in theindustry.

1993

The TAIPEI 101 Project Is
Completed.

Insight, Onsite, Farsight

2016

2018

Establishment of“Kumagai Gumi Group
Vision”

The Medium-termManagement Plan (FY2018 to
FY2020)Kumagai Gumi Group Vision
was established to make thecompany more valuable to andnecessary for society regardlessof any changes in markets andsociety, where employees canwork with great pride in theircompany. The vision clarifies
the value Kumagai Gumi wants
to deliver to its customers andsociety as well as its goals as aconstruction company in thenext five years to ten years.

The Medium-term Management
Plan (FY2018-FY2020) --Strategies for
Accelerating Growth-- was launchedin 2018 with the three strategic pillars:
1. Maintain and increase contracted
construction businesses, 2. Create new andinnovative businesses, and 3. Form strategic
alliances with other companies. With thesestrategies, Kumagai Gumi will further
expand its business and contribute tosolving various challenges in society, whileachieving an increase in corporate value.
Related Info > P. 12

Quality that Inspires Happiness

What is Quality that Inspires Happiness ? It is more than excellenceof form and function. To inspire happiness, a structure must bringongoing satisfaction to the people who use it.

Ultimately this means putting those people first – by thoughtfully
considering their needs, hopes and dreams – and incorporating
optimized solutions into design and construction. With technology
honed through over a century of experience, combined with ourworkforce of diverse individuals, Kumagaigumi is passionate about
creating quality that positively impacts people’s lives in the present
and inspires enduring happiness for generations to come.

Worksite Excellence

Kumagai Gumi’s distinctive Worksite Excellence is the synergy of
our superior technology leveraged by our diverse workforce.

Worksite Excellence depends on making personal responsibility
and accountability the highest priorities for action.
This philosophy is based on the Three Reality Principle of leanconstruction: observe the actual task being performed, understandthe actual situation, and take realistic action. At Kumagai Gumi, thisis uniquely a company-wide practice, not limited to the physicalworksite, or gemba, itself. We empower all staff – whether on-theground or in the back office – to apply this principle as a unitedeffort, fully engaged at all times. We call this the Constant-alert
Worksite .

Worksite Excellence also requires that we always keep in mind
the fact that people will be living their lives at this worksite.
Therefore, we must stand in our customers’ shoes, learning fromthem, and sharing their concerns and desires. Moreover, we must
extend this understanding far into the future, considering the lives
and feelings of those who will use the space in the decades ahead.
Taking into account all we have learned, we think of all the ways
we can be of optimum service to customers and users. Only thendo we take action.
Disaster Prevention Construction using unmanned construction technology at Aso Ohashi Bridge Area

The Kumagai Gumi Group’s
Value Creation Process
For further details, see P. 8

6

The Kumagai Gumi Group Corporate Report

7The Kumagai Gumi Group’s Value Creation Process

Insight

Based on the Kumagai Gumi Group’s vision of “Insight, Onsite, Farsight”, we carry out our construction services with
our optimized solutions to satisfy the needs of society. In addition to our Worksite Excellence in constructing buildings,
the Kumagai Gumi Group companies strive to understand what customers expect and society needs through ourproactive communication. Once we identify issues, we promptly propose flexible and optimal solutions, while constantly
endeavoring to enhance our worksite skills.
The Kumagai Gumi Group has been making constant efforts to create new values for the future, utilizing our own
unique methods through the full participation of all the members of the group companies that share the same goals.

SuperannuatedInfrastructure
Natural Disasters

Sustainable Town
Development

Environmental
IssuesIssues of Quality

Labor Decrease in
the Construction
Industry

Equal Opportunity
for Education

Human Resources

Diversity
Human Resource
Development● Work Environment● Promotion of theGroup Vision●●

Contribution to Sustainable Development Goals (SDGs)
The Sustainable Development Goals (SDGs) that were adopted at the United
Nations General Assembly in 2015 are a universal call to action to end poverty
and inequality, promote quality education, and protect the environment. With
17 goals and 169 specific targets, SDGs try to solve a variety of issues, seeking
to build a better world in which all people in every country and region canenjoy peace and prosperity. The Kumagai Gumi Group pursues its own line ofbusiness – construction- which will contribute to solving various social issues
including SDGs, realizing new value creation on a sustainable basis.

Kumagai Gumi Group
Offers Its Stakeholders

Powerful synergy created from our technologies
combined with our human resources

OnsiteThe Kumagai Gumi Group Vision

Social Issues

Values that the

For further details, see P. 22

For customers andlocal communities

For further details, see P. 26

Worksite Excellence created by “Insight” willbring about the Kumagai Gumi’s original values
through construction under our slogan, “Being
No. 1 in safety, quality and the environment.”

Technologies

TechnologicalCompetitive Advantages● Research andDevelopment System● Research Center●

Farsight

For Special Feature, see P. 33

Customer Satisfaction (CS)Activities● Relationships with Stakeholders● Evaluation from Society●

The Kumagai Gumi Group stays involvedin the operation, maintenance, renovation
and restoration of the buildings evenafter the completion of construction. We
continue to support our stakeholders invarious ways.

Worksite
Excellence

Safety and Heath
Quality Control● Environmental
Protection●●

For employees

Human Resource
Development

For business partners

For further details, see P. 32

Worksite Excellence
to Farsight

Quality That
Inspires HappinessCoexistence in Mutual
Prosperity

For local communities

Sustainable
Coexistence with
NatureFor shareholders andinvestors

Stable Returns for
Shareholders by
Raising Corporate
Value

The Kumagai Gumi Group’s Fields of Business

Civil Engineering

Architectural Construction

Overseas Projects

Other Projects

The Kumagai Gumi Group builds strong and resilient infrastructurethat is indispensable in daily life so that people can live a safe
and comfortable existence. We continue to support people’s
happiness through the high quality of our work. We are ready todeal with large-scale renewals of superannuated infrastructureand natural disasters by further improving our technology. We
will also accelerate our initiatives to improve productivity by
utilizing Computer Integrated Manufacturing (CIM) and Artificial
Intelligence (AI), and to conserve forestry by state-of- the-art civilengineering technologies and unmanned automatic operations.

The Kumagai Gumi Group carefully considers people’s needs,
hopes and dreams in order to build stages for everyday life,
including condominiums, office buildings, hospitals, and shopping
centers. We will also promote our initiatives for environmentallyfriendly construction and medium- to large- scale wood buildings.
Furthermore, we will strengthen our efforts to improve productivity
by using the Building Information Modeling (BIM) and Information
Technology (IT).

The Kumagai Gumi Group is expanding our sales and marketing
networks in our overseas offices, and is striving to expand our businessto secure various sources of revenues. In order to realize our goals, wewill promote alliances with other companies, securing global humanresources and focusing on risk management.

Kumagai Gumi has a flawless track record in urban development
projects in the construction industry. Taking advantage of our knowhow and expertise, we will contribute to urban redevelopment andarea regeneration. We will also further accelerate our initiatives towork on concession projects, infrastructure operations, and renewableenergy which is expected to grow in demand in the future.

Corporate Governance8●

Corporate Governance Systems●

Risk Management●

Compliance

The Kumagai Gumi Group Corporate Report9Financial and Non-Financial Highlights
Notes: The financial information is based on the Kumagai Gumi Group consolidated results, whereas non-financial information is based solely on Kumagai Gumi.

The amount oforders received:
Unit: Billion yen

381.7 billion yen

Sales:*Kumagai Gumi Only

381.7

400

200

200

100

100

FY2014

Operating Income:Unit: Billion yen

FY2015FY2016

374

400
300

FY2013Equity:Unit: Billion yen

300

0374 billion yen

0

FY201723 billion yen

Unit: Billion yen

150

Unit: Billion yen

400

126.3

FY2013

FY2014FY2015FY2016FY201722.6 billion yen

1000FY2013

FY2014FY2015The Number of
Employees:

22.6

FY20160

FY2017The Number ofFemale Managers:

2,382 persons 39 persons# Employees (persons)

23

FY2013

FY2014FY201560

FY2016

Total Emissions:

Output Level:
Kumagai Gumi and
the Group Companies
Kumagai Gumi Only

10,000t-CO2

t-CO₂ /100 million yen

29.9

15

30

25.4

2,382

20

FY2017

CO₂ Emissions (Scope 1 and 2): See P. 30
Kumagai Gumi Group
Companies
Kumagai Gumi Only

# Female Managers (persons)

3,000

2,000

39

40

10

20

5

0

0

11.3
3.8

20

10
1,000

0

333.6

300

50

30

10

333.6 billion yen

200

Unit: Billion yen

20

Total Assets:

100

Ordinary Income:30

126.3 billion yen

FY2013

FY2014FY2015Current Net Income:

FY20160

FY2017

Research andDevelopment
Expenses:

Return on Equity:

15.7 billion yen 15.3 ％Unit: Billion yen

20

ROE %

Net Income

40

15.7

15
10

FY2013

FY2014FY2015FY2016FY20171.98 billion yen

1.98

2.0

FY2013

FY2014FY2015The Number of Patents:*Kumagai Gumi Only

Unit: Billion yen

0

FY2016FY201770

7.5

FY2013

FY2014FY2015FY2016FY2017

The Frequency of Labor Accidents:

Number

100

10

0

0.42

1.00

70

30

1.5

75

20

1.0

50

0.50

10

0.5

25

0.25

0

0

0.75

0.42

15.3
5
0

10

FY2013

FY2014FY2015FY2016FY2017FY2013

FY2014FY2015FY2016FY20170

FY2013

FY2014FY2015FY2016FY20170

FY2013

FY2014FY2015FY2016FY2017The Kumagai Gumi Group Corporate Report11Growth Strategy

The Medium-term Management Plan (FY2018-2020)~ Strategies for Accelerating Growth ~Based on the Medium-term and Long-term Management Direction released in November 2017, Kumagai Gumi has formulated its“Medium-term Management plan (2018-2020): Strategies for Accelerating Growth” with the following three strategies: 1. Maintainand increase contracted construction businesses, 2. Create new and innovative businesses, and 3. Form Strategic alliances withother companies.
We are determined to carefully implement these strategies geared toward accelerating growth.

Three (3) Strategies and Target Numbers

Strategy-1

Maintain and Increase Contracted Construction Businesses

The Kumagai Gumi Group will strengthen its proposal capability to increase the number of orders received, promotetechnology development to enhance productivity, and maintain and increase the earning power of its core business ofcontracted construction businesses.

Fields of Focus on for
FY2018-2020

Medium-term and Long-term Management Direction

Domestic Civil Engineering

Kumagai Gumi will continue to provide high quality construction services, responding to the qualitativeand quantitative changes in the construction market.
● Kumagai Gumi will strengthen its ESG management to realize a long-term growth and contribute to theformation of a sustainable society.

Maintain and increase
contracted construction
businesses

Strategy-3

Form strategic alliances withother companies

Consolidated
Sales:

460 Billion Yen

Sales
500

billionyen

400

Consolidated
Operating
Profits:

33 Billion Yen

ROE:

12%

New Business Sales

50 Billion Yen

Operating
IncomeNew Businesses

300

Reinforce Ability to
Make Proposals andIncrease Productivity

As sales rise, so will
operating income

100

Target Sales from Our Business Alliance with
Sumitomo Forest in Operating Income (Image)

FY2015FY2016FY2017FY2018FY2020The Mid-term Management Plan

*Investment income and dividend income are included in the operating income.
*The new businesses include overseas businesses, real estate, investment income and dividend income.
*The existing businesses include contracted construction businesses.

12

FY2022

8

60

6

40

4

20

2

billion
yen

200

0

OperatingProﬁt Margin
10%

Operating Proﬁt
Marginskills and resourceful manpower

Making good use of BIM and AI
Promoting Precast Concrete● Strengthening on-site technicalskills and resourceful manpower●●

Strengthening the sales and marketing network of existing international offices, including Taiwan, Myanmar, and India
Securing global human resources and reinforcing project managers● Securing reliable production systems by building good relationships with local partners● Infrastructure development and renovation work0●Technology that satisfies the needs of society, e.g., disaster prevention and reduction technologies, renewal ofsuperannuated structures and deterioration prediction technologies, light and reinforced building materials, and others● Technology that corresponds with a recycling society, renewable energy technology, medium- and large-scale woodconstruction technology, ZEB technology, among other things● Technology that contributes to improved productivity and safety, e.g. robotics, cost reduction technology, construction
time reduction technology, and others
Securing personnel to reinforce construction systems, as well as personnel who are experts in the new field ofinternational real estate business● Promoting diversity and inclusion to create a workplace environment where a variety of personnel can use their abilities,
as well as the human resources management system, to the fullest● Advancing a human resources development system for employees to improve their skills and expertise, e.g., OJT, grouptraining and self-development●

Consolidated Operating
Profits:

Operating Income from New Businesses

Operating Income from Existing Businesses

Technology Development

Consolidated Sales:

Continuous Investment beyond
the Medium-Term Plan

Making good use of ICT and AI●

500 Billion Yen

30%

Hotels and accommodation facilities geared toward the ever-increasing inbounddemand● Welfare and medical facilities that cater to the elderly in the aging society● Production, commerce, and distribution facilities with high productive efficiency● Medium- and large-scale wood construction● The complete renovation of multiple-dwelling complexes●● Strengthening on-site technical●International Business

FY2022 Goals

60-Billion-Yen Growth Investment

Existing Business Sales

Domestic Architectural
Construction

Create new andinnovative businesses

Dividend
Propensity:

Large-scale infrastructure renewal, such as superannuated highways and others
Renewable energy, including wind power, biomass, hydropower, andgeothermal energy● Disaster prevention and reduction preparation for catastrophic natural disasters● Civil engineering projects using wood efficiently, which will lead to forest
preservation●

Strategy-2

Our Four (4) Target Indicators (by FY2020)(Cost reduction, manpower savings, etc.)●●

Three Strategies for
GrowthEfforts to Improve Productivity●(announced on November 9, 2017)

Strategy-1

By strengthening our proposal capability
and expanding orders received

0

Human Resource
Development

Strategy-2

Create New and Innovative Businesses

Utilizing its expertise, experience, and technology, the Kumagai Gumi Group will make effective
investments and seek to create new revenue sources in addition to contracted construction business.

Fields of Focus on for FY2018-2020

Japanese Markets

Overseas Markets

Renewable energy business
PPP, PFI, and Concession● Urban renewal and redevelopment business● A series of redevelopments in the area surrounding
the Kumagai Gumi headquarters building● Projects utilizing forest resources

High-end multiple housing complexesHigh-end elder-care facilities● Renewable energy business● MOM (Management, Operation, Maintenance)businesses

Sale of bridge parts for large infrastructure renewal
marketplaces● Sale of paving materials for roads called FFP that
help prevent traffic accidents● Commercialization of patents that utilize unmanned
construction technology● Lease of steel frame erection piece called ACE UP● Sale of home self-walking support machine called
FLORA TENDER●●

Endeavors as Project
Commissioning Entity*

●

●
●

●

Sale of Commercial Products
Developed by Kumagai Group
Companies

Lease of the steel frame erection piece called
ACE UP
Overseas expansion of other commercial
products developed by Kumagai Gumi Group
companies*Participation in business that comes with investment, such as facility ownership and management, real estate development, etc.
The Kumagai Gumi Group Corporate Report13

Growth Strategy Medium-term Management Plan (2018-2020): Strategies for Accelerating Growth

Top Commitment
Strategy-3

Make Strategic Alliances with Other Companies

In addition to growth from its group partnership, the Kumagai Gumi Group is aiming for an innovative type of growththrough the synergistic creation and promotion of cooperation that surpasses its group framework.
Partners

Sumitomo Forestry

Renewable Energy
Companies

Fields of Focus for FY2018-2020

Design Companies

Specialized
Construction Companies

Field of BusinessContracted Construction Business●

Large-scale Infrastructure Renewal

Renewable energy business● Medium- and large-scale wood construction● A series of redevelopments in the area surrounding
Kumagai Gumi headquarters buildings● Projects utilizing forest resourcesJapan
New Business

Necessary Management Resources
Bridge design technology
Prestressed concrete manufacturing technology● Repair and reinforcement technology●●

Expertise in planning, development, and operation
Refractory technology, technology required fordesigning and constructing wood buildings● MOCCA (application of timber and wood products
and greening technology)● Expertise in modeling development for theutilization of forest resources●●●

International construction projects
High-end multiple dwelling complexes● High-end elder-care facilities● Renewable energy business

Expertise in international business(construction management and execution of works)● Expertise in planning, development, and operation●●

Overseas

International
Business Partners●

Our Strategic Alliances with Sumitomo Forestry
The Kumagai Gumi Group will actively promote its strategic alliance with Sumitomo Forestry in various areas anddevelop new businesses.

Areas

Key Projects
Proposal for “wood” construction of housing complexes and elder-care facilities● Design and construction of medium- to large-scale wood buildings(starting Project W70*1 at the earliest possible time)● Renovation of housing complexes and accommodation facilities(hotels and Japanese-style inns)● M&A and alliances with architectural design, drawing and construction companies● Consulting for the 2022 issue of productive green spaces●

MOCCA andgreening-related
construction
Projects

Renewable
Energy Projects●●

Domestic biomass, wind, solar, and low-head hydropower generation
The development of large-scale domestic projects through our business allianceswith Sumitomo Forestry and other companies

Overseas Projects

The development of high-end housing complexes and elder-care facilities in Taiwan
The development of high-end housing complexes in Myanmar and Vietnam● Business alliances with construction, interior, and greening companies in Asia, North
America, and Australia● Renewable energy alliances with Sumitomo Forestry and other companies in Asia
● M&A of construction companies in foreign countries

Peripheral Businesses●●●(Healthcare Products,
Technologies, andOthers)picture provided,
Sumitomo Forestry Co., Ltd. and
Nikken Sekkei Ltd.

14

Joint ResearchandDevelopment

Leasing and selling of technologies and products developed by Kumagai Gumi Group
companies (e.g., steel frame erection piece “ACE UP”, walker for home use “FLORATENDER”) by fully implementing the Sumitomo Forestry’s domestic and internationalsales and marketing networks

We are ready toaccelerate growth asa “reborn” Kumagai Gumi.

Kumagai Gumi Co., Ltd.
President
Yasunori Sakurano

Target Earnings
In five years*2(Kumagai Gumi Share only)

3 billion yen

from theExisting Business＋3 billion yen

from theNew Business

TOTAL:

6 billion yen

Establishment of technology geared toward Sumitomo Forestry’s Project “W350”
Development of unmanned construction technology and forest road construction
technology that support forest conservation projects, utilizing the Forest Environment
Tax funds and local government’s Forest Conservation System● Development of robotics in the interest of labor-saving in construction and forestry●●*1. 70-meter-high structures with hybrid components made from wood and steel.
*2. The sum of operating income and investment income.

The Kumagai Gumi Group Corporate Report15

Growth Strategy Top Commitment

Executive Summary of the Previous Medium-termManagement Plan (2015-2017)
Target Numbers

Q: First of all, please tell us about your plans and hopes as a new president.

A: In order to achieve further growth as a “reborn” Kumagai Gumi,
I believe that it is my mission to serve as the leader of the management plan.
Kumagai Gumi launched its new Medium-termManagement Plan in April 2018, based on the Mediumterm and Long-term Management Direction announced
in November 2017. The year 2018 represents a major
milestone for us since we celebrate our 120th anniversary.
I am keenly aware of the heavy responsibilities I facein taking over the management duties during thisimportant year.
After I assumed office as the president of Kumagai
Gumi, I had a chance to greet and speak with many of ourclients. I also visited all branch offices across Japan for the
ceremony of our 120th anniversary and had the chance tomeet and greet local business partners in person. Throughsuch experiences I realized once again that Kumagai Gumi
has been supported by so many partners as well as clients,
and we owe our success to all of them. Our relationshipwith them has made us what we are today. In an attempt
to reciprocate their trust in us, we have to seek a new
direction for further development as a “reborn” Kumagai
Gumi after going through the hardships of reconstruction
and regeneration. I am convinced that it is my mission to
spearhead the new strategies that will direct the company
toward a path of sustainable growth in a timely fashion.
In order to take a strong and solid step forward, it isessential that all the management and employees of the
new Kumagai Gumi join forces. Our previous president

had a policy of “All Management Participation" including
Kumagai Gumi Group companies and their business
partners. I will continue his approach and energize thecompany so that every employee can remain motivatedand work hard. I played baseball during my high school
and college days. Even after I graduated, I have continued
to play baseball, so I understand how important teamwork
is and that the victory is only achieved by improving thecooperation of the team.
Since I joined Kumagai Gumi, I have built my career as
an administrator, mainly in the administration department
and related offices. Through my experience, I haveobtained extensive knowledge and expertise related toconstruction, and I believe that I deeply understand the
feelings and circumstances of engineers.
I think, beyond the framework of civil engineeringand architecture, I can make the most of my career byoverseeing and directing our projects from my original
point of view. One of the strategies of the Medium-termManagement Plan starting in fiscal 2018 is the “Creationof New and Innovative Business”. I will make the best useof my expertise and experience that I have earned, andtogether we will build our future through the combined
efforts of our management and employees. When we jointhese forces for growth, I believe we can move toward thenext stage of development.

Q: What are your thoughts on the results of the previous Medium-term Management Plan?

A: I am happy to say that our improved performance has even surpassed our target
numbers. However, I am not satisfied with all the results and I think there are still somechallenges we need to tackle.

The previous Medium-term Management Plan endingin 2017 was aimed at securing stable earning power byshifting to growth from regeneration, with the two target
numbers of achieving a constant consolidated operating
profit of more than 4.0 percent and a 10 percent or more
ROE. As for the former, we exceeded the target number bya wide margin, and we also successfully achieved our goal
for the latter although the number itself was lower thanthe previous year due to a capital increase in fiscal 2017.
I think, however, the results were brought about by thefavorable business climate of the construction industry.
Therefore, I am not satisfied with all the results. Morespecifically, in our contracted construction business we
successfully entered into a new market of infrastructure

16

renewal/renovation in civil engineering by means of our
joint venture with another company from a different
industry. In architecture, we received orders involving
large-scale construction projects that are more productive
due to an increase in sole-source contracts. On the other
hand, our capability of making proposals and improving
the profitability remain to be seen. Our businessdevelopment in such areas as overseas projects, PFIs, andconcession projects has not gained satisfactory resultsthat we had visualized during planning.
But if our point of view changes, I think that there is a
lot room for growth for our company. I am determined
to make further efforts to realize the goals of the new
Medium-term Management Plan.

ROE

10% or more in ROE
9.3%

10.0%
4.0%
4.0% or move inConsolidated
Operating Proﬁt

20.4%

－0.4%
－2.5%

FY20122.0%
FY2013

FY2014Signiﬁcantly surpassed
the target numbers
15.3%

10.9%

4.4%

Actual

22.6%

7.1%

7.3%

Consolidated
Operating Proﬁt Rate

6.2%

FY2017FY2015FY2016
The Previous Medium-termManagement Plan

The ROE target number
was achieved despite acapital increase of
approx. 34.7 billion
yen in FY2017.
Given the favorable
business climate, thetarget number inoperating proﬁt wasachieved as a result of
our thorough costmanagement.

Q: How do you think the business environment will change in the future?

A: There will probably be a big turning point after the year 2021. Having identified exactly
what we have to offer, it is essential for us to make efforts to produce steady results.
We expect that in the next three years before 2020,
the current favorable business environment is likely tocontinue due to various projects in the fields of disasterprevention/reduction and natural disaster preparation,
superannuated social infrastructure renewal, and thecontracted construction business of the 2020 Tokyo
Olympics-related facilities. Actually, we have numerous
projects in the pipeline.
Opinions differ, however, when it comes to the trends
after 2021. It is estimated that there will be a shrinking
domestic market as a result of a decrease in populationand the financial constraints on public investment, as wellas an accelerated decrease in the number of constructionengineers and skilled workers.
Meanwhile, we expect to see a change in terms of
quality in the construction market as the number ofmaintenance and renewal, PPF/PFI and concession
businesses increases.
In any case, I expect that there will be a big turning
point for our company in the near future. In an attempt
to tackle such a challenge it is essential for us to create
new businesses and boost sales through strategic
business alliances. I think that it is very important to gain
steady results each year according to the Medium-termManagement Plan that was started in fiscal 2018.

Q: Please talk about the important initiatives in the new Medium-term Management.

A: We at the Kumagai Gumi Group will make efforts to establish a solid foundation for oursustainable future growth and implement proactive business strategies.
In November 2017, the Kumagai Gumi Group announced
its Medium-term Management Direction that contained
the three strategic pillars: 1. Maintain and increase
contracted construction businesses, 2. Create new andinnovative businesses, and 3. Form Strategic alliances withother companies. The new Medium-term Management
Plan is prepared to implement these three strategies.
Needless to say, contracted construction is the corebusiness for our company. However, the constructionindustry may change in the near future. At the same time,
it is essential to cope with the expected changes in orderto grow further by entering into new markets beyond
the conventional framework of construction. In order tomove forward, it is vital to formulate strategic businessalliances with other companies to propel new projects
and accelerate further growth.
The challenge we face in the contracted construction
business is the improvement of productivity above
all else. Since we expect the decreasing number ofengineers and skilled workers, we will actively promote

innovation in various ways, such as the introduction ofrobotic technologies, ICT, and AI, as well as down-to-earthbusiness improvement.
In our overseas operations, which will lead our businessexpansion in the future, we will strengthen our sales andmarketing networks in Taiwan, Myanmar, and India, andbuild up a system where we can produce steady revenue.
In this context, it is our most important task to secureand train international human resources who will playleadership roles in this field.
In technology development, we established theTechnological Headquarters in April 2017 to strengthen
our development system and launched our initiatives
geared toward open innovation as well as production
innovation. We will satisfy the needs of society such as
disaster prevention and infrastructure superannuation,
while contributing to a recyclable society by developing
innovative technologies for renewable energy, and for
improving productivity and safety.
The Kumagai Gumi Group Corporate Report17

Growth Strategy Top Commitment
Investment Plan during the Medium-termManagement Plan (FY2018-2020)
Fund on
Hand
OperatingCash Flow
CapitalIncrease:
Approx. 34.7
Billion Yen

Domestic and international Business
Alliances (Strengthen Functions):
Renewable Energy Business:

GrowthInvestment

PPP/PFI/Concession Business:
Domestic Real Estate Business:
International Real EstateBusiness:
Technological Development/
Facilities:

TOTAL: 60
Billion Yen

Investment Breakdown● “Wood” Architecture and Construction

Target Earnings(in ﬁve years)

Q: ESG Management has drawn a lot of attention lately. What are your thoughts on that?

(Conceptual Design, Working Drawing, and Construction)

23 Billion Yen● Large-scale Infrastructure Renewal(Drawing, Development of Machine Tools, and Construction)● Business Partners in Overseas Projects● Biomass power generation

7 Billion Yen
21 Billion Yen
3 Billion Yen
6 Billion Yen● Hydraulic power plants; toll roads● The redevelopment of the area surrounding the Kumagai Gumi

headquarters building● Income property acquisitions

7

Billion Yen● High-class condominium development and elder care facility

development business in Taiwan, Myanmar, etc.

● The development of “Wood” architecture/construction technologies, A total of operating

ZEB technologies and unmanned construction technologies● IT and human resource development

income andinvestment returns.

With regard to human resource development, a sense ofthis technology overseas in the future as well. It is vital for us
競争力維持･拡大と収益源多様化のため、
improvingproductivity and promoting diversity has started
to get cooperation from the group companies to create new
成長領域に投資する
to develop among our employees since the initiatives werebusinesses, and we believe that strategic alliances with other
implemented during the previous Medium-term Managementcompanies beyond the borders of our industry should bePlan. Our next challenge is to create specific results.
the key for our success in the future.
About the creation of new businesses, there are two major
As an example of an alliance with another company, we
directions; 1. The business that we promote as a businessannounced our business and capital alliance with Sumitomo
投資計画（3年間）
entity, and 2. The business for which we commercialize theForestry in November 2017. In addition, we are currently
technologies we have developed for sale. Examples of thestudying alliances and partnerships with prospective
former include renewable energy, PPP, PFI, and concession
business partners such as renewable energy companies,businesses. We have been also studying a potential businessdesign companies, and specialty construction companies as
where forest resources are utilized as wood chip supply forwell as foreign business partners. We have set up the Alliancebiomass fuel for power generation using domestic lumber.
Promotion Office specializing in business collaboration with
Overseas, we will promote new businesses such as theother companies, pursuing not only capital alliances but also
development of high-end condominiums and apartments,
various forms of collaboration.
and the operation of high-end retirement home facilities forIn the new Medium-term Management Plan, we have set
senior citizens.
challenging goals of 460 billion yen in consolidated sales
One of the examples of the latter is the hybrid pavement
and 33 billion yen in consolidated operating profit. We needtechnology developed by Gaeiart, a Kumagai Gumi Groupto pursue such unprecedented target numbers because
company. Having earned its outstanding reputation for
we really need to bring about innovations as the Kumagai
preventing traffic accidents, we have successfully performed
Gumi Group. In order to meet these goals, we plan to makemany road construction projects in Japan using thisa 60-billion yen investment over the next three years totechnology. We will obtain its patent in the U.S., and market
establish the foundation for future businesses.

Q: How will you proceed with the alliance with Sumitomo Forestry?

A: At present, we have been working on business alliances with Sumitomo Forestry in five
fields. We will actively develop new businesses through alliances as well as the further
expansion of the existing businesses.
Together with Sumitomo Forestry, we currently haveeight group discussion sessions in the five fields of focus.
One of them is what is called “Mocca” or wood-building
promotion and green-related construction projects withdesign and construction of wood buildings. In orderto realize the “W350 Project*”, a super high-rise woodbuilding being developed by Sumitomo Forestry, we
are working hard toward the early construction start of a70-meter wood and steel hybrid building called “W70”.
Moreover, K and E, a Kumagai Gumi Group company, anda Sumitomo Forestry group company, Sumitomo Forestry
Hometech have started their business activities together
in the field of building redesign and renovation.

18

In the field of renewable energies, we will promote
power generation businesses such as biomass as a new
business in the domestic market. In the overseas market,
we are considering the development of high-quality
condominium and apartment complexes in Taiwan,
Myanmar and Vietnam.
Furthermore, in the field of joint research anddevelopment, we will tackle the technological challenges
to realize the “W350 Project”, and work jointly on various
areas including unmanned construction technologies that
contribute to forest conservation and the forest industry.
Our target sales for fiscal 2022 from the business alliancewith Sumitomo Forestry is estimated to be 6 billion yen.

A: Our line of business, construction, is the work that supports society. From the ESG
perspective, we will review our stance toward our business activities once again andmake efforts to play a leadership role to help realize a sustainable growth of society.
The construction business that we have been engaged in forover 120 years is the work that supports the infrastructureof our society. Contributing to society through ourline of business is Kumagai Gumi’s ultimate goal as aconstruction company. The Sustainable Development
Goals (SDGs) adopted by the United Nations indicatesthe global challenges of priority we should tackle moving
toward 2030, and we firmly believe that we can contributeto providing solutions to various challenges through ourbusiness activities. In recent years, ESG has drawn attention
as one of the criteria for investment, and it has become very
important to understand accurately which social challenges
can be opportunities and/or risks. It is, therefore, a highly
important responsibility for corporations to communicate
all relevant information in a timely fashion to all the
stakeholders.
We have organized and clarified our initiatives with regard
to the ESG in the Medium-term Management Plan. As far as
the “Environment “of the ESG is concerned, Kumagai Gumi's
strategic alliance with Sumitomo Forestry has just begun
to expand in this field, exemplified by wood construction,
forest preservation and renewable energy, in addition to

the environmental load reduction we have been involved
in. Sumitomo Forestry has been actively engaged in several
innovative initiatives in the environmental area, and therefore
I think this alliance should serve as a good stimulus for ourcompany which should face environmental issues.
Regarding the “Society” of the ESG, we will promote
policies related to diversity and work-life balance. Kumagai
Gumi has been actively involved in its unique activities suchas donating school buildings in Myanmar on a continuous
basis. I think it is important to let our employees know aboutsuch activities to enhance their awareness of the ESG.
In our company, we have continued to strengthen"corporate governance"; in 2016 we introduced two externalboard directors and set up an advisory committee fornomination and remuneration. I feel that the introduction of
external directors made the board meeting more energizedand productive and I can already see the effect of it.
In order to enhance its effectiveness, we have been
improving the organizational structure by carrying out
periodical inspections. We will continue to strengthen thelegal compliance and further promote communication
with stakeholders.

Q: Lastly, talk about your commitment to the stakeholders.

A: Taking the lead of the Kumagai Gumi Group, I am committed to create an organizationalgroup full of vitality and growth energy in an attempt to contribute to a rich, sustainable
society.
In the Medium-term Management Plan, we have set atarget number of ROE at 12 percent among other target
figures for fiscal 2020, which is the last year of the plan.
I am pleased to say that we already attained the ROE of
15.3 percent in fiscal 2017, and therefore we will continue
to steadily maintain this level of ROE from now on. The
capital adequacy ratio also improved to 37.9 percent at
the end of fiscal 2017, and we will make further efforts toimprove our financial condition. In our Medium-term andLong-term Management Direction for the next five years
and ten years, we have set goals of realizing 500 billion yen
in consolidated sales, and 50 billion yen in consolidated
operating income for fiscal 2022. While optimizing thebalance of shareholders’ equity, investment for growth,and a return to shareholders, the Kumagai Gumi Groupwill attain these high goals by growing steadily with theunderstanding of the shareholders.
As I mentioned at the outset, I have strongly felt again,
since assuming the presidency, how much support
Kumagai Gumi has been given from many people. I
believe that it is our mission to live up to the expectationsof various stakeholders including customers, cooperative
companies, employees and shareholders, and attainsatisfactory results for them. We will move forward andgrow as the Kumagai Gumi Group.

*Develop vision high-rise wooden building with a height of 350 meters
Sumitomo Forestry’s plan
The Kumagai Gumi Group Corporate Report19

Growth Strategy

Group PowerThe Kumagai Gumi Group is a group of specialists that have further advanced and specialized technologies cultivated by
Kumagai Gumi, and built up unique expertise and technical ability. Our group companies coordinate to swiftly provide
satisfying services in all stages of the total life cycle of buildings, including surveying, planning, design, construction,
operation/continuous management, and renovation.

General Contractor

Kumagai Gumi Co., Ltd.

Kumagai Gumi implements its projects in close collaboration
with its group companies by effectively utilizing and mutuallycomplementing the technologies, expertise, products andmanagement resources held by its group companies so as tomaximize its collective capabilities.

Corporate Information > P. 40

https://www.kumagaigumi.co.jp/en/

Overseas
Projects andOthers

Civil Engineering

Architecture

Building Renovation

K&E Co., Ltd.

K&E Co., Ltd. specializes in building renovation. It offers consultation
for all aspects of renovation, from building diagnosis and renovation
planning to actual construction. Our services include the evaluationof seismic capacity, earthquake-resistant reinforcement design,and long-term repair and maintenance planning.
As a member of the Kumagai Gumi Group, the company isdetermined to create "more comfortable spaces" for all the phasesof the building's life cycle, and to give its customers across thenation comprehensive and satisfactory services.

GAEART Co., Ltd.

GAEART Co., Ltd. offers construction and paving services forroads, airports, harbors, and bridges, as well as the manufacturingof asphalt paving materials. The company has been engaged
in research and development to further improve roads. As amember of the Kumagai Gumi Group, the company will carefully
manufacture and further improve its technologies in terms ofenvironmental protection as well as hospitality. It will enhance
its application performance and ability to make proposals in
an attempt to make an even bigger contribution to a safe andsecure society in the future.

Civil Engineering, Renovation
and Production of Construction
Machinery and Materials

At the Toyokawa Factory where the headquarters is located,
Technos manufactures steel parts for shield tunnels, construction
machinery and cleaning equipment for soil contamination,
while owning a leasing business for a steel construction method
called ACEUP. At the Tokyo office, the company has beendeveloping a business with a horizontal multi-axis rotating
cutter named "Quattro Cutter", which was introduced from
Germany. The company is also expanding an environmental
business and a building renovation business in collaboration
with Kumagai Gumi.

Trading Company
Specializing inConstruction

FATEC Co., Ltd.

FATEC Co., Ltd. is a trading company that sells construction
materials and equipment developed with state-of-the-art
technologies. In addition to providing products, it also offers
technology to maximize the utilization of the products. Currently
the company has been engaged in the development oftechnologies related to building maintenance and renovation.
Furthermore, in the health and nursing care field, it has beendeveloping home-use walking assistant devices. We will makesociety more pleasant and comfortable by providing newtechnologies and new products in the future.

Established:

November 1963

Established:

February, 1996

Established:

June 1989

Capital:¥1,000,000,000

Capital:¥470,000,000

Capital:¥20,000,000

Sales:¥48,291,000,000(FY2017 ending in Mar-18)

Sales:¥8,899,000,000(FY2017 ending in Mar-18)

Sales:¥2,313,000,000(FY2017 ending in Dec-17)

Number of
Employees:

736 (as of March 2018)

Number of
Employees:

148 (as of March 2018)

Number of
Employees:

9 (as of March 2018)

Representative Kenji Yamamoto
Officer:

http://www.gaeart.com

Construction in
TaiwanTechnos Co., Ltd.

Representative Eiji Morita
Officer:

http://www.technos.info

Taiwan Kumagai Co., Ltd.

Taiwan Kumagai Co., Ltd. was established in 1974 as a group company
of Kumagai Gumi to undertake construction in Taiwan. For wellover 40 years, it has been involved in a number of construction
projects including semiconductor factories and golf courses. The
company boasts of its impressive track record as a Japanese generalcontractor operating in Taiwan, including the construction of suchlandmarks as Tatsumi Dam, the largest hydropower dam in the Eastat the time, Shinko Station Building, an early skyscraper in Taiwan,
TAIPEI 101 which was the world's tallest building at its opening, Art
House Hua Zhu Zi Huan which is known for its unique, DNA- inspired
spiral design. Its mission is to further expand the technologies of
the Kumagai Gumi Group in the Taiwan market.

Working Drawing
and Education

Representative Takayuki Aono
Officer:

http://www.fa-tec.co.jp/

Techno-Space Creates Co., Ltd.

Utilizing CAD and information systems, Techno-Space Createsprovides software services needed from the planning phasethrough the completion of a project, such as preparing schematicand working drawings, and various application preparation
support. It is currently developing a new business using Building
Information Modeling (BIM) in collaboration with Kumagai
Gumi. The company also offers educational seminars onarchitecture and construction for universities and construction
companies, where the basic operation of CAD and applications
are taught in various levels from beginner to professional. The
company will support the construction industry in various ways.

Work Outsourcing
and Insurance
AgencyTechnical Support Co., Ltd.

Technical Support provides administrative outsourcing services,which enables the customer’s work to become more simplified
and efficient in order to make the client’s core business moreproductive. The company also serves as an insurance agency
for both life and non-life insurance, offering various insurance
plans suitable for its clients.

Established:

January 2001

Established:

December 1974

Established:

November 1993

Established:

July 1995

Capital:¥300,000,000

Capital:

NT$600,000,000

Capital:¥30,000,000

Capital:¥70,000,000

Sales:¥24,477,000,000(FY2017 ending in Mar-18)

Sales:¥9,392,000,000(FY2017 ending in Dec-17)

Sales:¥830,000,000(FY2017 ending in Mar-18)

Sales:¥553,000,000(FY2017 ending in Mar-18)

Number of
Employees:

344 (as of March 2018)

Number of
Employees:

177 (as of March 2018)

Number of
Employees:

57 (as of March 2018)

Number of
Employees:

39 (as of March 2018)

Representative Kazuhisa Iwama
Officer:

http://www.k-and-e.co.jp/

20

Road Pavement
andMaintenance

Representative Toyohiko Ina
Officer:

http://www.taiwankumagai.com.tw/

Representative Tsukasa Wakuta
Officer:

http://www.technsp.co.jp/

Representative Koji Hidaka
Officer:

http://www.tsp-kumagai.co.jp/

The Kumagai Gumi Group Corporate Report21Insight

Advance Technology and Make the Best Use of Human Resources
We, the Kumagai Gumi Group, will contribute to the formation of a sustainable society
and strive to develop technology that enhances safety, quality and productivity.
At the same time, we aim to become an energetic company that leverages the
personal qualities and abilities of each employee.
“Technology Strength” and “Human Resources” ―In order to provide a place where people can gather, interact and enrich their lives
with a sense of safety, we will maintain and improve our “Worksite Excellence”
through the Technology and Human Resources.

Insight Onsite FarsightTechnology Development System
Technical Research & Development
Division leads to drive practical technology
development
Kumagai Gumi aims to offer high-quality construction
services and create a sustainable society. In order to raise
the quality of our proposal and the productivity of ourconstruction work, our Technical Research & Development
Division promotes technology development in alliancewith the Civil Engineering Division, the Architectural
Construction Division as well as the Safety, Quality
and Environment Division. The Civil Engineering andArchitectural Construction Divisions each have its
own Technology Control Department, which focuseson technology development directly affecting theirrespective field operations. The Technical Research &Development Division works in three areas, which are“technology to achieve a recycling-oriented society”,“research and development to respond to social needs”,
and “technology development for improving productivity
and safety”.
The Technology Institute is comprised of four
laboratories, namely, the Base Technology Lab (foundationand ground, construction material), the Disaster Prevention
Technology Lab (structures in general), the Environmental
Engineering Lab (sound, wind, heat environment), and
the Global Environment Lab (soil, greening, air quality).
The institute mainly handles basic research and element
technologies development. The New Technology
Creation Center is divided into the Development
Group 1, which works on robotic and AI technology,
and the Development Group 2, which specializes inalgae biotechnology. The center aims to do researchand develop products in alliance with companies inTechnology Development Systemdifferent fields. In the Technology Planning Department,
the Planning and Research Group, the Control Groupand the Intellectual Property Group devise technology
development strategies, and support for the researchers.

“TECHNICAL RESEARCH & DEVELOPMENTINSTITUTE” welcomes 30th anniversary
Tsukuba Technical Research & Development Institute has
progressively renovated its facility in anticipation of 2018,
which is the 30th anniversary of the lab. The showroom
newly opened by remodeling the second floor of themain building, which displays panels to show developed
technologies in different colors for the civil engineering
technology, the architectural construction technology andthe common technology. It also contains devices such as
the "sound camera", which visualizes and displays sounds,
the VR device and the 3D hologram display of wind flow
around our head office. The facility which used to be
the marine hydraulic experimental laboratory has been
converted into a multi-purpose indoor testing site.

The showroom at Tsukuba Technical research & Development institutePlanning and Research Group

Planning Group

Administration
Intellectual Property Group

Technical
Research &Development
Division

Generic Technology Research Office

Technical Research &Development InstituteResearch Office
Research Office
Research Office

New Technology
Innovation Center

Development Group 1
Development Group 2

The Kumagai Gumi Group Corporate Report23Insight

Advance Technology and Make the Best Use of Human Resources

Insight Onsite FarsightTechnology to Create Social Value
Reduce steel member and excavated soil

Support efficient survey work by utilizing iPads

KG Column (Kumagai Gumi Original Column) Method

Levelling work support application “VOISL” with voice
input function

Steel pipe poles (columns) used in many of the steel frame
structures are hollow inside. At the joint of a column and abeam, the stress of a beam flange (horizontal) is transmitted
to the steel plate (diaphragm) attached to the column, but thebeam web (vertical) where the joint is hollow, the stress is nottransmitted, and therefore, it is not assessed by the structure
calculation in the conventional steel framed structures.
We have developed KG columns, which have cruciform ribs
(vertical) inside the hollow space as supporting material, so as
to allow the beam web stress to be transmitted. As a result, thebearing force of the beam web can be effectively included in
the structure calculation, and the total beam material weight
can be reduced.
We have applied this technology for the base beam
structures of "Redwood Kuki", which now is under construction,
and achieved reduction in total steel frame weight and laborcosts of the foundation work. We were also successful inlowering the heights of the foundation beams and reducing thevolume of soil excavation.
We have adopted the phased array ultrasonic inspection
method, which is regarded as a promising new inspection
method (wide angle view inspection) in the production of KG
column in order to assure quality.
Conventional Design
The bearing forceof the beam web is
not assessed forthe purpose of thestructure calculation
when the inside of
the column is hollow.

Steel pile pole(column)

Diaphragm

FlangeBeam

VOISL is an iPad application developed to support an efficientlevelling work, which is conducted daily at the construction
sites. VOISL-installed iPad functions as field notebook,calculator as well as drawing, and helps to conduct efficientlevelling work.
Characteristics of VOISL① As values are input orally through a microphone
connected to an iPad, you can keep your eye on
the surveying tool while inputting values. The
application repeats the input values to confirm theaccuracy of the data.
② You can register standard and/or planned heights
and retrieve them. By registering the plannedheight, the application calculates the variance
between the planned and the actual heights.

The shield machine bits replacing
technology for long-distance and/or
composite grounds
Sunrise Bit Method
Recent shield work tends to be longer in distance andgreater in depth, and therefore, the need for replacing
cutter bids is increasing. Cutter bits need to be replacedeven in the middle of excavation work when thebits are worn out or the ground conditions change.
Conventionally, a worker manually replaces bits in frontof the working face, after the ground improvement
work is done. However, this involves the risk of groundcollapse and danger in handling heavy loads, in addition
to substantial time and a cost burden.
In the Sunrise Bit Method, a rotating body containing
multiple cutter bits is installed in the spoke of the shieldmachine, and bits are replaced automatically by rotating
the body via a hydraulic jack. Through this method, bits
are replaced through a remote control at a safe location.
Applicable case: ultralong distance excavation of about
10 km in distance③ Survey results are stored in an iPad and/or
Dropbox and shared with PC. You can also retrieve
past survey data.
④ VOISL can be used as field notebook as it displays
PDF drawings and allows for handwriting input.
Applicable case: difficulty in ground improvement suchas greater depth undergroundWeb

Stereoscopic visualization ofinvisible wind flow
Visualization Technology of Environmental Wind with
Virtual Reality (VR)Wind around high-rise buildings is a familiar problem
for architects, building owners and those who live in theneighborhood. Wind currents are three-dimensionaland flow in a complex manner in urban and city areas.
The issue of the wind is generally assessed and dealt
with based on the actual measurement, the wind tunnel
testing, and the flow analysis results. However, thewind cannot be captured well only by two dimensional
information from paper-based data containing theresults of experiments and analyses, and therefore, it isdifficult to come up with effective solutions.
This technology, which visually captures complex
wind currents, has been developed in order to moreeasily and accurately understand the cause of the winds.
By utilizing this technology, you can visually understandwhere and how the wind flows and where strong windor light wind flows.
In the operation screen, flowing lines in arrow shapes
indicating wind speeds change with the passage oftime, like an animation, and you can visually capture
wind blowing against a building, contrary wind, and/or wind flowing into a broad street. This technology canbe used to examine the measures against the winds,
based on stereoscopically visualized results in threedimensional space, and it is also effective for the purposeof presentation.

KG Column
The bearing force ofthe beam istransmitted by placing
the supporting material
inside the column.
It can eﬀectively be used in
the structure calculation.

Cruciform rib is welded at the jointof a column and a beam.

iPad and an earphone with microphone for voice input.
VR terminal (Gear VR)

Process of welding cruciform rib to thecolumn.

24

Ultrasonic flaw inspection using thephased array.

Sample display of the phased arraydeviceResults of the flaw inspection isdisplayed in these images. This makes
it easier to estimate location, sizeand form of the flaws, and therefore,
the entire picture of the flaw ismore readily captured, comparedto the conventional ultrasonic flaw
inspection method. As a result, thismethod has become increasingly
popular in nondestructive inspections.

Startup screen of VOISL

Levelling work using VOISLImage of loading to shield machine

The system enables bits replacement byrotating the body containing multiple bits

Sample visualization of the building wind
(Kumagai Gumi head office neighborhood)
The Kumagai Gumi Group Corporate Report25OnsiteDeliver Quality that Inspires Happiness with Our Worksite Excellence
Our “Worksite Excellence” ― Every employee of the Kumagai Gumi Group is amember of the construction sites.
Understand our customers thoroughly, learn from them, and share their thoughts,
and furthermore, care for those who gather at the site 10 years or 20 years in future,and think about how we can accommodate their feelings, and then act.
Not only in the form and function of our construction work, but also in safety, quality
and environment, we strive to be No.1 in creating activities in order to deliver "Qualitythat Inspires Happiness", which continues to satisfy the people who gather or use thefacility.

Insight Onsite Farsight

Aiming to Be No. 1 in Safety,
Quality and Environment Management
Establishment of “Safety and Health,Quality and Environment Policy”
Effective April 1, 2018, after having reviewed our “Safety
and health policy”, “Quality policy”, and “Environment
policy”, we rearranged and integrated them into the “Safety
and health, quality and environment policy”.
Safety and Health, Quality and Environment Policy
Kumagai Gumi will comply with social norms,
regulations and internal standards, establish
management systems, and through effective operations
will adapt to the changes in the business environment
and provide solutions for various tasks.
We will clarify our responsibility and authority, workon improving the capabilities of our employees andspecialty constructors through education and training,
secure necessary management resources, and continue
improving our business activities.
Safety and Health Place the highest priority on humanlife and maintain high standards
in safety and health control toprevent industrial accidents, promotehealth and provide pleasant work
environments
Quality

Environment

Meet the expectations of ourcustomers and users with ouroutstanding overall capability andoffer construction services thatwill foster trust.
Aiming for the realization ofa sustainable society, reduce
environmental damage throughour business activities and strive
to create a better environment.

We share the above and satisfy the corporation’ssocial responsibility with all the employees.

Safety Results in FY2017
We put a frequency rate of 0.5 or less as our target in
FY2017. Placing our highest priority on the prevention ofoccupational accidents, we achieved this target (pleaserefer to page 11). On the other hand, we also had a fatal
accident, which was the first case in three years. We plan tothoroughly assure our first priority on human life in FY2018.
The elimination of fatal accidents being the most importanttask, we will practice our safety and health controls toachieve our goal, under the new safety and health, quality
and environment policy.

FY2018 Safety and Health Control Plan (extract)
Objectives

Frequency Rate of 0.5 or Less
Prevention of similar disasters/accidents(continuation of “Safety Declaration
Campaign”)

1. Prevention of slip-and-fall accidents.
2. Prevention of disasters/accidents involving
heavy construction equipment.
3. Prevention of tumbling/elderly accidents.
4. Prevention of tunnel work-related
accidents.
Actions
5. Reduction of construction work accidents
to be takenthat lead to public disaster.
Diligent Application of System Operations

6. Ensure a line and staff control system.
7. Strengthen safety and health coachingof the specialty constructors.
8. Enhance coaching/support for the specificbranches in focus.
9. Implement programs for mental andphysical health promotion.

■ Practicing PDCA Cycle under Safety and HealthManagement System

1. Maintain a safe, secure and pleasant workplaceenvironment
Branch managers, on-site managers, branch managers of thebusiness partnership, chairmen of the professional leadersgroups and all workers each express a safety declarationin their respective positions, and develop safe, secure andpleasant workplace environments involving all staff.
2. Enhance a "line and staff control system"
Each department that supports and/or coaches field
offices must make sure to fulfill the responsibility of eachaccording to the system. The operations group, which is
the line, maintains the system to coach safety and healthcontrols, in coordination with the safety group.
			 In developing construction plans, many experienced
members of the headquarters as well as the branch
offices participate to eliminate risk and conduct risk
assessment, so as to fully prevent disasters and accidents.
			 The professional leaders lead the elimination of risky
areas in daily safety inspections, which then are reviewed
by the headquarters, the branches and Yuuei Kyoryoku
Kai Partnership, from different angles. We support
this coaching system and practice the prevention ofoccupational accidents.
3. Improve safety and health education
The headquarters, branches and Yuuei Kyoryoku Kai
Partnership provide training for the employees, theThe Kumagai Gumi Group Corporate Report27OnsiteDeliver Quality that Inspires Happiness with Our Worksite Excellencebusiness owners and the professional leaders in the areasof risk prediction and safety and health management
system.
4. Enhance the prevention of elderly/tumbling accidents
As a prevention measure for elderly accidents, we workon providing training to solicit awareness for deteriorating
physical conditions and to make use of their experience,as well as continuing to use “thoughtfulness for others”
stickers. As many of our slip-and-fall accidents are also
experienced by the elderly, we now place age restrictions
and permit requirements for work that involves the riskof falling. In order to prevent tumbling accidents, weproperly practice KST exercises, which foster a sense ofbalance, and meticulously keep our basic rules such asorganizing our work place and securing safe passageway.

■ Aiming to become the industry’s No. 1 in safety results

More than 15 years have passed since our company
implemented the Safety and Health Management System andwe have significantly reduced serious occupational accidents.
However, the frequency rates have been on the increase
in recent years. Therefore, we analyzed the causes of thepast disasters and selected feasible safety goals, thoroughly
reviewed the compliance status of the in-house standards
and provided coaching. The company aimed to return tothe industry’s top level during the three-year “Medium-termManagement Plan” period starting from 2015, where weposted improvement and stabilization in the safety results as
the goal. In our “Medium-term Management Plan 2020 (fiscal
year 2018 – 2020)” starting this year, we aim to maintain theindustry’s top level and further strive to be the industry’s No.1.
Please refer to > P. 11 Occupational accidents frequency rates

Quality and Environment Management
System
We have consolidated our quality and environmental
systems, which used to be run independently, into the
Quality and Environment System and have implemented it
this way since April 2016, so as to run the PDCA cycle in themost appropriate manner and garner the expected results
even when the business environment changes drastically.
Under the Quality and Environment System, we make andcarry out an annual plan in accordance with “Medium-termManagement Plan” and “Annual President Policy”. We havefurther set our medium- to long-term goals for environmental
activity in “The Promise of
Eco First”, and those for our
biodiversity initiatives in “Policy
for the Environmental Diversity
Initiatives”.

28

Insight Onsite Farsight“Promise of Eco First” (Extract)* Figures are for non-consolidated Kumagai Gumi

1. Promote development of a “low-carbon society”
through the construction business.
(1) Volume Base

FY2020 FY2030 FY2050

CO2 emission volume target(ten thousand t-CO2)

4.8

3.7

1.8

Reduction rate against
FY1990 (%)

87

90

95

Reduction rate against
FY2013 (%)(2) Intensity Base

25

42

71

FY2020 FY2030 FY2050

CO2 emission volume target(t-CO2 /hundred million yen)

20.6

16.4

8.2

Reduction rate against
FY1990 (%)

50

60

80

Reduction rate against
FY2013 (%)

18

35

67

2. Promote the formation of a “Recycling-basedsociety” at construction sites.

(1)FY2020
Mixed waste
discharge
target(2)FY2020 Green
Purchase Rate *targetArchitectural
Sites

Civil Engineering
Sites

All sites:
Less than 10 kg/
total floor
space m2

All sites:
Less than 0.5 t /hundred million yen

Architectural
Sites

Civil Engineering
Sites

15% or more

21% or more

*Green Purchase Rate: Rate of amounts paid for the purchase of green
procurements per completed contract work value of 100 million yen.

3. Aim for a “Nature Symbiotic Society” and promote
initiatives that maintain biological diversity.
4. Strive to develop, improve and spread technologies
and methods with considerations for environmental
issues.
5. Actively participate in environmental preservationin the community.
6. Actively disclose and make efforts in communicating
environmental information.

Quality and Environment Management
System Organization
President
Overall Quality andEnvironment Control Manager

Headquarters

Quality and Environment
Committee

Division Heads
Managers

Quality and Environment
Specialty Group
System Audit Team

Department Heads

Branches

Results of the Employee Survey (assessment by the staﬀ
members with Internal Audit experience)

Branch Manager

Overall Branch Quality andEnvironment Control Manager
Branch Quality andEnvironment Committee
Branch Quality andEnvironment Specialty Group
Branch System Audit Team

into our daily operation and that the operational efficiency
has improved.
The results of fiscal year 2017 show that positive
responses to whether the system has been built into ourdaily operation gained an additional 11 points to 53%,
whereas the operational efficiency improvement gained
2 points to 52%. Based on these results, we believe ourQuality and Environment Management System has
gradually become well implemented. We will continue
to improve the system and try to establish the mostappropriate management system.

● Built into the daily operation

FY2016（n=710）Group Leaders
Department
Heads/On-site
Managers

Feel it’s built inDoes not feel it’s built in

42％

58％

53％

FY2017（n=517）■ Continue to Improve Quality and The Environment
Management System

47％● Operational Eﬃciency Improvement

Feel it’s improved

We did a survey in fiscal years 2016 and 2017 regarding our
Quality and Environment Management System which had
been in place since fiscal year 2016, in order to understandwhether our employees actually feel that the system is built

Does not feel it’s improved

FY201650％50％

FY201752％

48％（n=670）（n=541）

Utilizing Third-party Evaluations
We reviewed the results of the Corporate Quality
Management Level Survey (by the Union of Japanese
Scientists and Engineers) and the Environment
Management Level Survey (by Nikkei Inc.) to determine
our strengths and issues, and make use of them in ourmanagement system improvement. Our ranking in theEnvironment Management Level was down significantly

in FY2017. We believe this is due to the increasingawareness of environmental issues in the constructionindustry in general as the social environment changes
and other companies accelerating their efforts in thisarea. We plan to diligently work on resolving the issues
stated below and try to recover our ranking going
forward.

Kumagai Gumi “Quality Management Level Ranking”

Kumagai Gumi “Environment Management Level Ranking”

General Construction Industry Ranking

Ranking in General Construction Industry*Implemented Only in Even Fiscal Years

1
2
3
4
5
6
7
8
9
10

2

43
2010

2
22
2012

All Industries Ranking

1

2

15
27
2014

2016

1
5
10
15
20
25
30
35
40
45
FiscalYear

Strength: Ability to form systems that match the business environment,
responses to risks.
Issues:Corporate-wide, new engineering technology development,
technology development from a medium-to -long-term
perspective, enhancement in new engineering technology,
utilization of quality control method to improve eﬃciency, etc.

1
2
3
4
5
6
7
8
9
10

5
6
2011

5

7

7
2012

5

2013

2014

10
2015

2016

2017

FiscalYear

Strength: Measures against contamination, conservation of biologicaldiversity.
Issues:Recycling of resources, measures against global warming(measures for the products), etc.

The Kumagai Gumi Group Corporate Report29OnsiteDeliver Quality that Inspires Happiness with Our Worksite Excellence

Insight Onsite Farsight

Kumagai Gumi Group Activities for Environmental Preservation
With respect to the reduction in CO 2 (Scope 1, 2 *1 )emissions, we have practiced various reduction efforts,such as idling-stop on construction sites, the use of hybrid
construction machines, the inspection and maintenanceof our vehicles, and fuel-saving driving. Our plan has been
making steady progress since 2000 and we are moving
towards achieving the targets in FY2020. Having said that,Environmental Targets and Results Evaluation for FY2017 and Targets for FY2018 (construction)

we have already maximized our fuel-saving driving, which
is very effective for the reduction of CO2 emission, and weare reaching our limit now with the current initiatives.
Scope 3 CO2*1 emissions in FY2017 is as shown in thegraph below. We will further search for ways to reduce
total CO2 emissions including Scope 3 and implement
actions.

* Unconsolidated Kumagai Gumi

Environment Activities

Civil
Engineering

Please refer to > P. 28 “Promise of Eco First” (extract)

CO2 emission volume: Intensity Base*2 (Scope 1, 2) *Non-consolidated Kumagai Gumi

Architectural
Construction

t-CO₂/Hundred million yen

60

Kumagai Gumi actual CO₂ emission volume

FY2017 Targets

FY2017 Results

Evaluation

FY2018 Targets

Reduction in CO2 emissions

45.6 t-CO2 / hundred million yen
or below

54.7 t-CO2 /hundred million yen

Notachieved

53.7 t-CO2/ hundred million yen
or below

Reduction in mixed waste
discharge(promoting zero emissions)0.40 t / hundred million yen
or below

0.79 t /hundred million yen

Notachieved

0.33 t/ hundred million yen
or below

Promoting green purchases

Green purchase rate of 13.3% or more

11.7%

Not
achieved

15.9% or more

Reduction in CO2 emissions

11.7 t-CO2 / hundred million yen
or below

8.3 t-CO2/
hundred million yen

Achieved

11.2 t-CO2/ hundred million yen
or below

Reduction in mixed waste
discharge(promoting zero emissions)6.10 kg/m2 or below

6.39 kg/m2

Almostachieved

5.92 kg/m2 or below

Promoting green purchases

Green purchase rate of 13.5% or more

12.6%

Almostachieved

14.0% or more

CO2 emission volume: Intensity Base*2 (Scope 1, 2) *Non-consolidated Kumagai Gumi

Kumagai Gumi Targets in FY2020, 2030, 2050

50

t-CO₂/Hundred million yen

60
40

Kumagai Gumi actual CO₂ emission volume*FY2017 Actual/Unconsolidated Kumagai Gumi
Target ﬁgure based on the target set
Kumagai Gumi TargetsbyinJapanese
FY2020,Government
2030, 2050 (26%reduction from FY2013)

50
30
40
20
FY

FY

20.6

30
10
20
0

Business Activities and Their Impact on the Environment

16.4

18.6
Target ﬁgure based on the target set

Principal
material
input

by Japanese Government (26%reduction from FY2013)

8.2

1990

20.6

2010

2000

2020

203018.6

16.4

2040

2050

Fiscal Year*110Scope 1: The company’s own direct emission of greenhouse gasses (burning of fuel, industrial process)
8.2
		CO
Scope
2: Indirectemissionsfor theuse of 1,
electricity,heat and steam
suppliedby third parties
Gross
VolumeScope2, 3) *Non-consolidated
KumagaiGumi
2 Emission:
		 Scope 3: Indirect emissions other than Scope 1 and Scope 2 (emissions by the entire supply chain relating to Kumagai Gumi business activities)
Scope 1*20CO2 emission per construction work value of 100Scope
million2Yen
68 thousand
2010
1990 t-CO₂ (3.3%)
2000
2020
2030
2040
2050 Fiscal Year
8 thousand
t-CO₂ (0.4%)

volumeRecycling Rate (Construction)*
％

100
75

94.0

94.0

94.0

90.5

93.1

91.9

92.9

95.4

20
15
10

25

5

2013

2014

2015

2016

2017

Fiscal Year

● Wet concrete

2 million t● Steel frame

19 thousand t

0Completed work value of
106.8 trillion yen

Tunnels, dams, land development, etc.

25,214 kl
420 klArchitectural Construction

2,985,000 kvWh

Offices, hospitals, schools, etc.

● Papers

162,119 kg● Water

15,363 m3

Construction Division (Scope 1, 2)● CO 275,000 t-CO2

● NOx

103 t

● SOx

164 t

Waste Discharge

16,388,000 kWh

Completed work value of
187.7 trillion yen

In order to prevent any breach of environmental regulations,
we took the following initiatives in FY2017 and tried tocomply with the environmental regulations.
1. Provided environmental education by the headquarters
manager in charge of environmental regulations at
each branch office (5 times).

%

Target
Rate

50

0

30

94.0

58 thousand t

OUTPUT● Gross output

287,000 t● Recycle / reduction

274,000 t● Net discharge

13,000 t

Office Division (Scope 1, 2)● CO 2

1,000 t-CO2■ Complying with the Environment Preservation Regulations

Green Purchase Rate (Construction)(Per construction work value of 100 million Yen)

94.0

72 thousand t● Cement

Office Division● Electricity

Scope 3
1,962 thousand t-CO2 (96.3%)

2,038 thousand
t-CO₂

Civil Engineering● Kerosene

Scope 3
1,962 thousand t-CO2 (96.3%)

FY2017CO₂ emission
volumeConstruction Division● Steel rod● Light oil

Scope 2
8 thousand t-CO₂ (0.4%)

2,038 thousand
t-CO₂

Business Activities

Energy input ● Electricity

CO2 Emission: Gross Volume Scope 1, 2, 3) *Non-consolidated Kumagai Gumi
FY2017
Scope 168 thousand t-CO₂ (3.3%) CO₂ emission

INPUT

13.2

14.0

10.0

9.5

2013

2014

14.4

12.3

13.4

11.9

12.3

12.3

2015

2016

2017

TargetRate

2. Provided education for the branch control staff (twice)and conducted an inspection tour of the waste
treatment facilities (Aomori and Iwate prefectures).

3. Studied measures to promote the use of an electronic
manifest.
4. Hosted a training session on soil contamination(for environmental regulation controllers of the branch
offices, operation staff in the civil engineering andarchitectural construction departments).
* In FY2017, no fine or penalty was levied due to a breachof regulations, and no suit was filed in this regard.
* No environmental accidents occurred in FY2017.

Fiscal Year

*		Construction sludge is included starting from FY2017 figure.
The Kumagai Gumi Group Corporate Report

31Farsight

Worksite Excellence with Farsight:

SpecialFeatureLarge-scale reconstruction work for the“sand flow-through dam operation”
to support the future of hydroelectric
power generation

We Feel a Deep Responsibility to Our Clients.

When we build a structure, we are building a community.
Together with the people who will use that space.
Our relationship with our structures continues beyond their physical completion.
It includes ongoing operation, maintenance, renovation, and restoration. With thisever-ready support, our structures serve as the timeless stage where each generation
performs its part in life’s ever-evolving story.

In Miyazaki Prefecture, a pioneering initiative called “overall sediment control” has been
undertaken by a team at Kyushu Electric Power Co., experts and the people of the community.
It is an attempt to restore the river flow to its original form by way of controlling the
movement of sediment throughout the entire river basin, and the center of this initiative isthe large-scale reconstruction work of the Saigo Dam undertaken by Kumagai Gumi.

Control and Manage the Sediment Movement in the Entire River Basin
Project Outline

Name of Project
Project Site
Project Duration
Orderer

The Saigo Power Station Reconstruction work
as a measure for the sediment of the dam(civil engineering and removal work)

1355-1 Saigo Obaru Aza Kawatoguchi, Misatocho, Higashiusuki-gun, Miyazaki Prefecture(The Saigo Dam in the Mimi River system)
September 16, 2011 – July 31, 2018(civil engineering work)

Kyushu Electric Power Co., Inc. The Mimi River
System Maintenance OfficeConstructors
Project Outline

JV of Kumagai Gumi Co., Ltd., Tobishima
Corporation and Shidagumi Co., Ltd.

Remove 4 water gates in the center, lower
the upper end of the overflow weir byapproximately 4.3m, install two crest roller
gates.

The Mimi River that runs through the northern part ofMiyazaki Prefecture originates in Mt. Sampo in Shiiba-son
in Higashiusuki County and runs approximately 95 km into
the Pacific, passing through Morotsuka-son, Misato-cho andHyuga City. The river basin is rich in nature, full of life since
the olden times, and the river has brought fertility to the area.
Furthermore, the Mimi River has 7 dams and power
stations, which cover over 20% of the hydroelectric power
output of Kyushu Electric Power Co., and is the key insupporting the lives of people in Kyushu area.
Gokase River

Mimi River

In September 2005, typhoon No. 14 hit Japan, causing amajor disaster to the Mimi River. The amount of rainfall wasso significant that it exceeded the anticipated maximum
water level of the dam, and the resulting flood damage was
the most serious in its history. Large and small landslides
occurred in 500 or so mountain slopes and caused significant
amounts of earth and sand to flow into the dam reservoir.
This indicated the necessity of fundamental measures against
natural disasters.
Miyazaki Prefecture discussed the issue with Kyushu
Electric, experts and the people of the community, anddecided to proceed with “overall sediment control”. “Overall
sediment control” aims to reconfigure the sediment
movements, from the mountain areas, through the dams,
rivers, even to the shores, back to their original, more naturalways. By doing so, the safety level against flooding is expected
to rise and the river environment is to be made closer to thatof its original state when there was more biodiversity.
A cooperative project has been in progress in the Mimi
River area throughout the basin, and the center of such overall
sediment control at the Mimi River is the reconstruction of thedam by Kyushu Electric. Kyushu Electric has decided a major
reconstruction to effort should be done at the two dams
downstream of the Mimi. One of the two dams is the Saigo
Dam for which Kumagai Gumi JV is undertaking the task.

Dams in theMimi River

IwayadoKamishiiba
51,000 kW
93,000 kW(1942)(1955)①Kamishiiba

Miyazaki Prefecture

Omaru River
Hitotsuse River
Ooyodo River

Tsukabaru
63,000 kW(1938)②Iwayado③Tsukabaru

Morotsuka
50,000 kW(1961)④Morotsuka⑤Yamasubaru

Yamasubaru
41,000 kW(1932)

Locations of large-scalereconstruction works to beundertaken by Kyushu Electric Power Co.

⑥SaigoOouchibaru
16,000 kW(1956)⑦Oouchibaru

Saigo
27,000 kW(1929)The Kumagai Gumi Group Corporate Report33Farsight

Special Worksite Excellence to Farsight: Large-scale reconstruction of the “sand flowFeature through dam operation” to support the future of hydroelectric power

Power Generation Cannot be
Suspended during the Reconstruction

Difficult Reconstruction Needed to beCompleted within a Limited Period of Time“We have a decades-long working relationship with Kyushu
Electric Power and in recent years have made various efforts
to increase business orders. The reconstruction of the Saigo
Dam is an extremely important project not only for Kyushu
Electric Power but also for the community. Therefore, wewere very eager to receive the order. I believe our abundant
experience and sincere attitude towards the project allowed
us to get offered the order.”These are the words of Satoru Miyawaki, deputy manager
of Kyushu Branch, who also served as the head of the onsite office during the early stage of the Saigo Dam project.
The reconstruction of Saigo Dam will implement asand flow-through dam operation. When heavy rains fall
like in typhoons, the water level of the dam is lowered totransform the reservoir into a state similar to a regular river.
This is a new operation system that allows sediment comingfrom the upper stream to pass through to the lower stream.
To be more specific, we removed four central gates among
then existing eight gates, then developed major water
discharge gates by lowering a part of the dam’s height by
4.3 m. The challenge of the reconstruction’s adding a sandflow-through mechanism to an existing dam was the firstsuch case in Japan.
“Hydroelectric power generation is a basic formof infrastructure that supports society, and therefore,
we cannot suspend power generation even duringreconstruction. We had to implement the newest versionof the sand flow-throughunder such a restriction.
This was the difficulty ofthe project.” (Miyawaki).

The reconstruction started in November 2011. As weneeded to do the work while keeping the water in thereservoir, we first built a temporary closed dam upstream toreroute the flowing water.
A proper control of the progress of each construction
phase was a highly important mission of the reconstructionof Saigo Dam. This is because the construction work within
the river can only be done during the dry period, which
is seven months from November through the following
May, for securing the safety of the river and the workers.
Masao Nakamura, who is the current head of on-site office,explains as follows:“During the work period, we set up work stations both
upstream and downstream of the dam. These facilities
needed to be removed every year in May when the worksuspension period started. Therefore, we could not leave
uncompleted work behind, so the progress of each phaseneeded to be tightly controlled.”
On-site management is a task requiring long experienceand thorough supervision. Kumagai Gumi JV, making thebest use of the past experiences gained in a variety of
construction projects, assessed all kinds of possible risks
and tried to manage the project in a most appropriatemanner. Kumagai Gumi’s strong management capability
has been effective in terms of keeping safety, the mostimportant task. The Saigo Dam project site has experienced
no accidents in more than 470,000 hours.
Nakamura also says, “It is the responsibility of the onsite office head to develop a trusting relationship among
the clients, the partner companies and the people of thecommunity, and to control the balanced work progress.”
We actively made efforts to communicate with the relevant
communities, by participating in the community festivals,
mowing in the neighborhood, and hosting many public
events to explain the importance of “sand flow-through.”
Nakamura now looks back and says, “When I was toldby the people of the community that the water level
did not go up in heavy rains and they felt safe, I thought
the objective of our reconstruction project had been
understood. I truly felt we contributed to the community
and was proud of our work.”

Deputy BranchManager, Kyushu
BranchSatoruMiyawaki

Outline of the Saigo Dam Reconstruction Work
BeforeAfter

Risk of ﬂooding
the neighborhood is high“Sand ﬂow-throughoperation” is carried out
when water ﬂow volume
is signiﬁcant at the timeof typhoons

When the water level is high,water ﬂow from the river
suddenly slows and deposits
tend to accumulate.
Accumulated sediment will push up the water level.

Sediments

34

By lowering the water level inadvance, water ﬂow accelerates,and sediment is easily passed
through downstream.

2 large gatesare newly built.
Lower thedam heightby 4.3 m

As a Partner Who Supports the Future of Energy
The reconstruction project has progressed generally asplanned. As of May 2018, which is 7 years since the work
started, the project is in its final phase of putting peripheral
areas in order. Our client Kyushu Electric has carefully
evaluated the Saigo Dam reconstruction and we signed
another contract for the reconstruction of the Ohyama
River water intake dam of the Onagohata Power Station,
Oita Prefecture. At the time of the record-breaking heavy
rain in Northern Kyushu in July 2017, the maintenanceoffice of the Yoake Dam in Oita was damaged and Kumagai
Gumi rushed over to the site for the restoration.
“We are very happy that the client rated our work highly,
leading to new orders, and feel that our challenge for thisdifficult project has been well rewarded. The technology
we have gained with the Saigo Dam is a significant asset
for Kumagai Gumi. We will carefully record this information
and will make it available for the technical experts who

VOICE

Comments by The Client

follow us” (Nakamura).
What we have gained through the Saigo Dam project
is not only for the benefit of Kumagai Gumi. The need forsand flow-through dam operations and large-scale dam
reconstructions will increase throughout Japan in the
coming years. The technology may possibly be utilized
outside Japan in new dam
construction projects in South
Eastern Asian countries. It
is one of the most criticaltechnologies that supports
the future of the hydroelectric
power generation.
Project manager of the site,

Masao Nakamura

To continue operating hydroelectric power generation

The stable supply of electricity is our most importantmission. For the Saigo Dam project, we needed to do thereconstruction while keeping the water in the reservoir
so as not to suspend hydroelectric power generation.
Under such conditions, we believe it was the unmatchedexpertise of Kumagai Gumi that enabled us to implement
the technology of sand flow-through operation for the firsttime.
When I went to the Saigo Dam project site for the firsttime, I was highly impressed at the sight of the construction
materials being stored in a proper order within a very
narrow area. I believe it is the fruit of thorough supervisionby the management, in addition to the construction
technology, that allowed us to safely undertake the projectgenerally within the planned timeframe.
Last year, I participated in "The International Commission
on Large Dams" (ICOLD) and presented the outline of
the Saigo Dam project. It drew significant attention and I
received many questions by the professionals of various
nationalities. We also received many visitors at the Saigo

Dam from overseas during the construction period. It is
not only for the Japanese dams, but also for the dams
worldwide that may find sand flow-through operation and/or large-scale reconstruction to be beneficial technology.
I believe hydroelectric power is an indispensableenergy for the future of Japan. It is clean, renewableand furthermore, entirely produced domestically. The
reconstruction work undertaken at the Saigo Dam will
surely become significant for the continuing operationof hydroelectric power generation in harmony with thecommunity. The technology we realized together with
Kumagai Gumi will play animportant role in supporting
the future energy of Japan.
Deputy Head,
Mimikawa Hydro Power
Development Office,
Kyushu Electric Power Co., Inc.,

Mr. Hirotoshi Nakayama
The Kumagai Gumi Group Corporate Report

35Corporate Governance

List of the Boardof Directors

Yasushi Higuchi

Yasunori Sakurano

Chairperson, Director
Apr 1976
Jun 2003
Apr 2008
Apr 2011
Apr 2012
Apr 2013
Jun 2013
Apr 2018

Joined Kumagai Gumi Co., Ltd
Representative Director and President of K&E Co., Ltd.
Executive Officer of the Company
Branch Manager of the Tohoku Branch of the Company
Managing Executive Officer of the Company
Senior Managing Executive Officer of the Company
Executive Vice President of the Company
President/Representative Director of the company
Chairperson and Director (Current)

Apr 1981
Apr 2011
Jun 2012
Apr 2014
Apr 2015
Apr 2017
Apr 2018

Apr 2012
Jun 2012
Jul 2012
Jun 2013
Apr 2014
Apr 2015
Apr 2017

Yoshihiko Kato

In charge of International Business, In charge of Marketing

General Manager of the Civil Engineering Management Division,
General Manager of the Railway Project Promotion Division of
Civil Engineering Management Division

Manager of Public and Finance Institutions of Sumitomo Mitsui Banking
Corporation
Senior Inspector of the Audit Department of Sumitomo Mitsui Banking
Corporation
Executive Advisor, Kumagai Gumi Co., Ltd.
Managing Executive Officer of the Company
Managing Director of the Company
Senior Managing Director/Senior Managing Executive Officer of theCompany (Current)
In charge of International Business/Domestic Architectural Marketingat the Company
In charge of International Business, In charge of Marketing at theCompany (Current)

Apr 1982
Apr 2013
Apr 2014
Jun 2014
May 2016
Apr 2017

Apr 2012
Apr 2013
Apr 2017
Jun 2017

36

Joined Kumagai Gumi Co., Ltd
Executive Officer/Deputy General Branch Manager of the Tohoku
Branch of the Company
Managing Executive Officer, General Manager of the Civil
Engineering Management Division of the Company (Current)Managing Director of the Company
General Manager of the Railway Project Promotion Division of the
Civil Engineering Management Division of the Company (Current)
Senior Managing Director, Senior Managing Executive Officer of theCompany (Current)

Yoshiaki Ogawa

Koji Hidaka

General Manager of the Architectural Management Division

General Manager of the Administration Division in charge ofDiscipline and Personal Information Protection

Joined Kumagai Gumi Co., Ltd
Executive Officer/General Manager of the Architectural Management
Department of the Kansai Branch of the Company
Deputy General Branch Manager of the Kansai Branch of the Company
Managing Executive Officer/Branch Manager of the Kansai Branch
Senior Managing Executive Officer (Current), General Manager of theArchitectural Management Division of the Company (Current)
Senior Managing Director of the company (Current)

Apr 1968
Jun 2003
May 2005
Jun 2008
Jun 2009
Jun 2010
Jun 2015

Apr 2016
Apr 2017
Jun 2018

Joined Kumagai Gumi Co., Ltd.
Joint General Manager of the Administration Division of the Company
Executive Officer of the Company
General Manager of the Administration Division of the Company(Current)
In charge of Discipline at the Company (Current);
In charge of Personal Information Protection at the Company (Current)Managing Executive Officer of the Company (Current)Managing Director of the Company (Current)

Joined Fujitsu Ltd.
Representative Director andPresident of Fujitsu Advanced Solutions Limited
Corporate Executive Officer of FUJITSU LIMITED
Director and Vice President of FUJITSU LIMITED
Representative Director and Vice President of FUJITSU LIMITED
Representative Director and Chairman of FUJITSU FSAS INC.
Director, Kumagai Gumi Co., Ltd. (Current)

Director
Apr 1971
May 1981
Jan 1995
Jan 1997
Jan 1999
Jan 2006
Jun 2016

Joined IBM Japan Ltd.
Joined American Family Life Assurance Company of Columbus,
Japan Branch (Aflac)
Manager of the Human Resources Development Department of
Aflac
Director, Aflac
Executive Officer, Aflac
Representative of Rischiare Consulting (Current)
Director, Kumagai Gumi Co., Ltd. (Current)*Mr. Koichi Hironishi and Ms. Mikie Yumoto are both outside directors of the company.

Junji Konishi

Takashi Kakimi

Standing Audit & Supervisory Board Member
Apr 1981
Apr 2007
Apr 2010
Apr 2014
Jun 2017

Joined Kumagai Gumi Co., Ltd.
General Manager of the Administration Department of the Kyushu
Branch of the Company
General Manager of the Administration Department of theChushikoku Branch of the Company
Assistant General Manager of the Chushikoku Branch of the Company(Current)
Standing Audit & Supervisory Board Member (Current)

Audit & Supervisory Board Member
Apr 1965
Sep 1993
Sep 1995
Apr 1999
Oct 2003
Jun 2008

Masaaki Ayukawa
Apr 1969
Feb 1971
Mar 1983
May 2000
Mar 2009
Jun 2014
Mar 2016

Joined Chuo Aoyama Audit Corporation
Registered as Certified Public Accountant
Representative Partner, Chuo Aoyama Audit Corporation
Senior General Mamager of ChuoAoyama Audio Corporation
Full-Time Statutory Auditor of TonenGeneral Sekiyu K.K.
Audit & Supervisory Board Member, Kumagai Gumi Co., Ltd. (Current)
Outside Director (Audit Supervisory Committee Member)of AUCNET INC. (Current)*Mr. Takashi Kakimi and Mr. Masaaki Ayukawa are both outside Audit &Supervisory Board Member.

Joined National Police Agency
Director-General, the Criminal Investigation Bureau,
National Police Agency
President, National Police Academy
Admitted to the Bar of Japan
Joined Hibiya Law Offices
Joined Shoyu Law Offices (Current)
Audit & Supervisory Board Member, Kumagai Gumi Co., Ltd.
(Current)

Tatsuru Satoh

Audit & Supervisory Board Member

Managing Director and Managing Executive Officer
Apr 1981
Apr 2012
Apr 2013
Apr 2015

Mikie Yumoto

Director

Senior Managing Director and Senior Managing Executive Officer

Senior Managing Director and Senior Managing Executive
Officer
Apr 1982
Apr 2011

Joined Kumagai Gumi Co., Ltd
Executive Officer of the Company
Director of the Company
Managing Director/Managing Executive Officer/General Manager,
Management Administration Division of the Company
Managing Director/Executive Officer/General Manager,
Corporate Planning Division of the Company
Senior Managing Director/Senior Managing Executive Officer of theCompany
President and Representative Director of the Company

Susumu Ogawa

Senior Managing Director and Senior Managing Executive
OfficerApr 2010

Koichi Hironishi

President , Representative Director

Audit & Supervisory Board Member
Apr 1978Apr 2011
Jun 2012
Apr 2013
Jun 2013
Apr 2016
Apr 2018
Jun 2018

Joined Sumitomo Forestry Co., Ltd.
General Manager of Personnel Department of Sumitomo Forestry Co., Ltd.
Executive Officer -dittoManaging Executive Director -dittoManaging Director -dittoSenior Managing Executive Officer -dittoRepresentative Director of Sumitomo Forestry Co., Ltd. (Current);
Executive Vice President and Executive Officer of Sumitomo ForestryCo., Ltd. (Current)
Audit & Supervisory Board Member, Kumagai Gumi Co., Ltd. (Current)

The Kumagai Gumi Group Corporate Report37Corporate GovernanceCorporate
Governance

Risk
Management

Corporate Governance Structure

Compliance Systems

Based upon the Corporate Governance Codes institutedby the Tokyo Stock Exchange, Kumagai Gumi has adopted
a corporate governance structure that is comprised ofa Board of Directors, a Board of Corporate Auditors, andan independent accounting auditor, so as to ensure theeffectiveness of our corporate governance.
As for the Board of Directors, the tenure of office is one
year in order to clarify management responsibilities andestablish an optimal management system. We have also
introduced an executive officer system in order to ensure
the efficient execution of the executives’ duties.
Additionally, we have introduced two external directors
who advise our management objectively in an attempt tofurther improve and strengthen our management system.
In deciding on the nomination and the compensationof our executive officers, such questions are resolved at
Board meetings based on the reports prepared by the
Nominating and Compensation Committee consisting of
the Chief Executive Officer and the outside directors.
With regard to the corporate auditors, the company
selects a general counsel and a certified public accountant
for external auditors, in order to further strengthen theauditing function with their knowledge and expertise. As
for accounting auditing, the company receives unbiased
audits from an incorporated accounting firm.

Our company’s compliance systems consist of threeinternal functions: 1. autonomous compliance byheadquarters and branch offices, 2. supporting functions
by the administration head office and other specialized
divisions, and 3. audits by the Audit Office.
In addition, an independent Legal Compliance
Committee periodically carries out an evaluation of thecompany from an outsider’s point of view. If it finds any
problems, it will advise the management accordingly,
so that the compliance systems can be thoroughly
strengthened across the company.
Compliance Systems

Support Function
Administration
Headquarters, etc.

InstructCompanywide Legal
Compliance and Legal Support
Systems

Evaluation
by Outsiders

AdviseAutonomous Function
Instruct

SelectAdvisory

Accounting Auditor

Nomination &Compensation
Advisory
ReportCommittee

Audits Result Reports

Select(Board of)Corporate
Auditors

AuditsControl

Execution

AuditsInstruct
Auditing Oﬃce
(Internal Auditing Audits
Function)Management
Conference

AuditsExecutive Oﬃcers(including Board
Members)

Instruct

Instruct

Business Units

DirectAuditsAdministration Division
Legal ComplianceDepartment(Checking Function)

Toward the Improvement of
the Effectiveness of Internal Control

38

Thorough Implementationof Appropriate Judgmentin Advance

Auditing Function

Select(Board of)
Directors

Head and Branch Oﬃces

Audit and Advise Corrections

Corporate Governance Structure
Shareholders Meeting

In order to improve the effectiveness of Internal Control,
our company has continued to strengthen the system
based on the “Basic Policy to Establish the Internal Control
System” by reviewing its internal rules and management
conference from time to time.
In addition, the Kumagai Gumi Group as a whole has
actively worked on the improvement of Internal Control inorder to maintain the reliability of our financial reporting
based on the Financial Instruments and Exchange Act.

Business Continuity Plan (BCP)■ Submission of the Written Pledge from All theManagers and Employees
In order to ensure each manager’s and employee's
awareness of the thorough compliance of laws
and ordinances, all executives and staff membersof Kumagai Gumi and its group companies
must submit their written pledge regarding
compliance every year (100% submission rate).

Kumagai Gumi has formulated its Business Continuity(BCP) Plan that enables our primary business to continue
to operate even during the time of large-scale disasters,such as recovery support and reconstruction work forour customers and local residents. We have established asystem in which BCP can be implemented promptly andin a variety of ways.
We have also established the permanent Crisis Control
Committee to maintain and improve the effectiveness of
the BCP. Based on the Plan/Do/Check/Act (PDCA) cycle,
our company will create an annual plan for each fiscal
year, including an emergency drill and relevant training.
We continue to improve and enhance our BCP so that
our customers can always rely on it during times of
emergency. We strive to be a construction company that
contributes to society, ensuring appropriate cooperation
with its branch offices, group companies, and cooperative
companies.

■ Training Program on Compliance
From October 2017 through March 2018, in an attempt
to improve the basic understanding of compliance, thecompany carried out an internal training program for theemployees of Kumagai Gumi and its group companies,
on such topics as the Antitrust Law, and bribery andcorruption to strengthen our compliance systems.
■ The Month to Strengthen ComplianceKumagai Gumi has designated October as the month
to strengthen compliance in an attempt to enhance theemployees’ awareness of compliance and to re-examine
the potential risks involved in daily work.

Systems Improvementand Legal Support

Management

OutsideEvaluation Function
Legal Compliance
Audit Committee

Our Initiatives toward Legal Compliance

Audit Oﬃce
Unbiased Audits■ Legal Compliance Audit Committee
The legal Compliance Audit Committee is composed ofoutside committee members, such as former judges andformer prosecutors in addition to the internal members,
including a full-time auditor, a director in charge of official
discipline, a management planning director-general anda chief of the Audit Office. The committee is held annuallyto strengthen the compliance systems of Kumagai Gumi
and its group companies.

A System to Eradicate Anti-Social Forces
In the “Kumagai Gumi Code of Conduct”, our company
declares that we will firmly stand against anti-social forces.
In our Compliance Program, we have a chapter entitled“How to Deal with Anti-Social Forces” describing specificways to cope with unreasonable demands from criminalorganizations, having informed our employees of what
we should do in such cases.
Kumagai Gumi has also incorporated the provision
regarding anti-social forces into the Special Construction
Contracting Agreement and the Equipment andMaterial Sales Agreement used for its transactions
with its cooperative companies so as to eliminate any
involvement with anti-social forces.

Operation of the Safety Confirmation
Communication System
Kumagai Gumi operates its Safety Confirmation
Communication System to confirm the safety of its
employees in case of an emergency, which is the mostimportant factor in order to organize a support system
based on the BCP. We have established the system toconfirm the safety of all the employees of its groupcompanies so that we can continue to operate ourbusiness as the Kumagai Gumi Group.

Protection of Personal Data
Kumagai Gumi has established fundamental rules andregulations, such as the Basic Principle, the Privacy Policy,
and the Personal Information Protection Regulations,and has posted the necessary information on its website
in order to deal carefully with and protect the private
information of all stakeholders, including its shareholders
and employees.
We have also prepared an instruction manual for the
Personal Information Protection Law, which applies toall our employees, and the importance of personal dataprotection has been made known to all executives andstaff members. Our company continues to improve its
personal information protection system and methods.

The Kumagai Gumi Group Corporate Report

39Corporate Information■ Headquarters:

2-1, Tsukudo-cho, Shinjuku-ku,
Tokyo 162-8557, Japan■ Registered Head Office: 2-1, 3-chome, Ote, Fukui-shi,
Fukui 910-0005, Japan

Yasunori Sakurano, President andRepresentative Director
JPY 30.1 billion■ Domestic Offices:
Hokkaido Office, Tohoku Office, Tokyo Metropolitan Area
Office, Nagoya Office, Hokuriku Office, Kansai Office,
Chugoku/Shikoku Office, Shikoku Office, Kyushu Office,International Office, and Technology Laboratory■ Overseas Offices:
China (Hong Kong), Taiwan, Vietnam, Sri Lanka, and Myanmar■ Group Companies:
GAEART Co., Ltd., K&E Co., Ltd., Technos Co., Ltd.,Techno-Space Creates Co., Ltd., FATEC Co., Ltd.,Technical Support Co., Ltd., Taiwan Kumagai Co., Ltd.

Project Creation Promotion Office
The Iidabashi Project Office

100 shares

45,210 (as of March 31, 2018)

Sumitomo Mitsui Trust Bank,
LimitedFrom April1 through March 31

40

Sales Promotion Department
Marketing Department

Railroad Marketing Department
Technical Center

Information and Communications Technology (ICT)
Promotion OfficeForeign Investors:
247 companies
and individuals,
8,634,974 shares(18.4%)
Other JapaneseCorporations:
520 corporations,
10,877,235 shares(23.2%)

Number of Shareholders:

45,210Total Number of Shares
Outstanding: 46,805,660(as of March 31, 2018)

Bridge Innovation Business Department
Enviromental Business Department

Financial Institution:
61 institutions,
14,423,622 shares(30.8%)

Individuals and Others:
44,325 persons,
12,003,153 shares(25.6%)

Infrastructure Renewal Business Department

Machinery and Materials Department
Dam Technology Department

Tunnel Technology Department
Shield Technology Department

Project Technology Department

Railroad Project
Promotion Division
Architectural
Management DivisionMarketing & Management
Department
Architectural Management
Department

Civil Engineering Design Department
Business Planning Promotion Department
Marketing Department

Solution Sales Department
Planning Department

Architectural Project Department
Budget Control OfficeArchitectural Engineering
Department

Purchasing Department
Architectural Production Innovation & Engineering Department
Architectural Structure & Engineering Department

Architectural Environment & Engineering Department
Architectural Production & Engineering Department

Architectural Design
Management Division

Production Building Information Modeling (BIM)
Promotion OfficeArchitectural Design Administration Department
Quality Control Department

Architectural Design Department 1
Architectural Design Department 2

TurnoverArchitectural Design Department 3
Structural Design Department

160,000,000

Kumagai Gumi Turnover

140,000,000

Kumagai Gumi Stock Price
TOPIX (Tokyo stock price index)

120,000,000

2,500

100,000,000

2,000

80,000,000

1,500

60,000,000

Earthquake-resistant Design Department
Technical Research &Development Division
Hokkaido Office

Nagoya Office

20,000,000

Chugoku Shikoku Office0

Shikoku Office

March
2012

March
2013

March
2014

March
2015

March
2016

March
2017

March
2018

New Technology Innovation Center

Hokuriku Office

500

March
2011

Planning Group

Technical Research & Development InstituteTokyo Metropolitan
Area Office

40,000,000

March
2010

Environmental Design Department

Tohoku Office

1,000

March
2009

Civil Engineering Department

Electric power and Energy Marketing Deparment

180,000,000

March
2008

Subconstractor Alliance Promotion Department

Civil Engineering Technology Department

Headquarters

Securities Firms:
56 companies, 844,145 shares(1.8%)

4,500

0

Safety Promotion Department

Quality and Environment Promotion Department

Civil Engineering
Management Division

Project Management Office

46,805,660 shares

Own Shares:
22,531 shares(0.01%)

Stock Price

3,000

Accounting Department

Safety, Quality andEnvironment Division

Stock Trading Data

3,500

Human Resources and General Affairs Department
Finance Department

Directors/Branch Managers MeetingFirst Section of the Tokyo
Stock Exchange
71,400,000 shares■ Fiscal Year:■ Base Date for Annual Dividend: March 31st
■ Annual Shareholders’ Meeting: June of the Year

4,000

Legal & Compliance Department

Administration Division

Management Meeting1861■ Total Number of Shares
Authorized to Be Issued:■ Total Number of Shares
Outstanding:■ Share Unit:■ Number of Shareholders:■ Administrator of Shareholders
Registry:

Alliance Promotion Office

New Business Development Office

President

Shareholder Composition

Board of Directors

Current Status■ Securities Code:■ Stock Exchange Listing:Work Style Reform Promotion Office

Audit Office

Stock Information

Secretariat Department

Corporate Communication Office(It was relocated to the above address on May 1, 2018)■ Capital:■ Number of Employees: 3,892 consolidated;
2,382 non-consolidated(as of March 31, 2018)■ Scope of Business:
To investigate, survey, plan, design, execute, and supervise
construction works, and to give technical guidance, provide
comprehensive engineering, management, and consulting
services as well as contracted construction businesses inrespect thereof and to contract for such works.

Corporate Planning Department

Fukui Office

January 6, 1938

Legal Compliance Audit Committee

January 1, 1898

As of April 1, 2018

Corporate Planning
DivisonAuditors

Kumagai Gumi Co., Ltd.

Auditors Committee■ Corporate Name:■ Founded:■ Incorporated:■ Representative:

Organizational Chart

Kansai Office

Kyushu OfficeInternational Branch Office

The Kumagai Gumi Group Corporate Report

41

6 6

4 4

2 2

3 3

11

About
About
thethe
Front
Front
Cover
Cover

TheThepaintings
paintings
on on
the thefrontfront
cover
cover
includeinclude“Cabbage“Cabbage
Harvest”
Harvest”
which
which
wonwonthe theKumagai
Kumagai
Gumi
Gumi
Corporate
Corporate
PrizePrize
in in
the theChildrenChildrenPainting
Painting
Exhibition
Exhibition
2017:
2017:
RiceRice
FieldsFieldsandandWater
Water
in Yourin YourHometown
Hometown(1), (1),andandthe thepaintings
paintings
withwithenvironment
environment
themesthemescreatedcreatedby by
TsukudoTsukudoElementary
Elementary
SchoolSchoolchildrenchildrenin Shinjuku
in Shinjuku
Ward
Ward
(2-8),(2-8),
which
which
is adjacentis adjacentto Kumagai
to Kumagai
Gumi
Gumi
Headquarters.
Headquarters.
* Kumagai* Kumagai
GumiGumi
has supported
has supported
opportunities
opportunities
in which
in whichchildren,children,whowhowill lead
will leadthe next
the next
generation,
generation,
can think
can thinkof theirof theirenvironment
environment
and andcultivatecultivateawareness
awarenessof theof valuethe valueof theirof their
preciousprecioussurroundings.
surroundings.
Together
Togetherwithwith
TsukudoTsukudoElementary
Elementary
School,School,Kumagai
Kumagai
GumiGumi
is actively
is actively
engagedengagedin environmental
in environmental
studiesstudies
as wellas wellas cleaning
as cleaning
the local
the local
area.area.
The company
The company
also sponsors
also sponsors
the above-mentioned
the above-mentioned
ChildrenChildrenPainting
Painting
Exhibition
Exhibition
hostedhostedby thebyNational
the National
Water
Water
EarthEarth
Hometown
Hometown
Networks
Networks
and theandPrefectural
the Prefectural
Water,
Water,
Earth,Earth,and Hometown
and Hometown
Networks.
Networks.

Kumagai
Kumagai
Gumi
Gumi
Co.,
Co.,
Ltd.
Ltd.

2-12-1
Tsukudo-cho,
Tsukudo-cho,Shinjuku-ku,
Shinjuku-ku,
Tokyo
Tokyo
162-8557
162-8557
https://www.kumagaigumi.co.jp
https://www.kumagaigumi.co.jp
Contact:
Contact:

Corporate
Corporate
Communication
Communication
Oﬃce
Oﬃce

TEL:TEL:+81-3-3235-8155+81-3-3235-8155FAX:
FAX:+81-3-5261-3716+81-3-5261-3716
E-mail:E-mail:info@ku.kumagaigumi.co.jp
info@ku.kumagaigumi.co.jp

The Kumagai Gumi Group Corporate Report 2018

5 5

7 7

The Kumagai Gumi Group Corporate Report 2018

8 8