Section 01

GrowthStrategies

23

Value Creation Process

25

Vision 2030 Long-Term Vision

29

Implementing ESG Management31

Key Issues (Materiality) for the Takuma Group32

Medium-Term Management Plan

35

Business Strategies

41
TAKUMA CSR Report 2021

24

Section 01

Growth Strategies

Value Creation Process

Value Creation Process
We are working to create new value by strengthening initiatives that address key issues(Materiality) through businesses that tap the Group's strengths in light of medium- to long-term
trends and social issues.

External environment
World

Japan

Rising energy demand andwaste issues, particularlyin emerging nations
Increasingly serious problem
of climate change
Progress of the Fourth
Industrial Revolution

Management Resources
and Strengths

Business Strategies
The Takuma Group will strive to become a great partner for
its customers while resolving challenges faced by customers
and society through useful technologies and services that arefounded on innovation. We will seek to realize sustained
growth alongside our customers and society through theongoing repetition of this approach.

Relationships of trustwith customers

Shrinking population
Aging population
Increasingly large-scale
natural disasters
Tight ﬁnancial conditions
Aging infrastructure

Relationships of trust with customers
built up over the 8 3 years since ourfounding

Risks and opportunities
Rising expectations towards
renewable energy

12Conserving resources
and protecting
the environment

3

Strengthening relationshipsof trust with customers
and communities

4

Pursuing partnerships
and innovation

5

Promoting activitiesof human resources

6

Ensuring safety
and health

7

Strengthening
corporate governance

Customers andregional society
Protecting the environment in which welive through the construction andoperation of safe, secure municipal solid
waste treatment plants
Maintaining regional and industrial
infrastructure through the highly eﬃcientand stable supply of energy
Revitalizing the regional economy andstrengthening resilience through theconstruction and operation of facilities

Customers

Innovation

TakumaGroup

Our achievements (to date)

Helping combat
climate change

Creating clean energy
Reducing greenhouse gas emissions
Reducing environmental impacts

Sharing ofneeds andissuesEngineering throughout the plant life
cycle, from planning to construction
and operation

P32

The environment

Creative R&D

Technology and expertise

Initiatives to realize carbon
neutrality by 2050

Key Issues (Materiality)

Created Value

Society

Realizing Takuma's
Management Principles
andVision 2030

Shareholders

Boilers
3,200+ units *Municipal solid waste treatment plants
360+ facilities
Industrial waste treatment plants
120+ facilities

Takuma Group
VisionIncreasing corporate value

P29*Of which, biomass boilers: 630+ units

Business partners
Provision of technologies
and services

Resolution ofchallenges
Human resources
Tenacious, dedicated human resources
who will carry on Takuma's founding
spirit and work closely with customers
in the spirit of good faithConsolidated employees

3,925

Employees

Medium-Term Management Plan
Business activities

P41

Domestic Environment and Energy Business
Overseas Environment and Energy Business
Package Boiler Business
Equipment and Systems Business

A robust base to ensure customers canreadily depend on us over the longterm for 20 to 30 years
Net assets

JPY 90.5 billion

Capital adequacy ratio

50.7%

Rating (R&I)

A-

Strengthening
the management foundation

Realizing a workplace environment
characterized by health, safety, highproductivity, and high motivation

P35

The Takuma Group operates the following business segments:

Financial base

Building stable relationships of trust
through fair and safe business
transactions

P39

Human resources
Digital technologies
Partnerships
R&D (Manufacturing and engineering capabilities)
Capital investment
Compliance

Products / Services
Engineering, procurement, construction, and commissioning of municipal solid waste treatment plants, water
treatment plants and energy plants
After-sales service for plants (operation management, maintenance)
Power Retail Business
General-purpose boilers such as compact once-through boilers and vacuum-type
hot water heaters
Air-conditioning, water, and wastewater equipment installation services
Equipment
for use in the semiconductor manufacturing industry such as clean devices and cleaning systems

P85

FY2020 results

Net sales: JPY 146,726 million
Ordinary proﬁt: JPY 11,028 million
Proﬁt attributable to owners of parent: JPY 7,529 million
ROE: 8.6% Dividends: JPY 36 per share(As of March 31, 2021)(As of March 31, 2021)

25

TAKUMA CSR Report 2021

26

Section 01

Growth Strategies

Value Creation Process

The source of value creation
The Takuma Group's strengths include relationships of trust with customers as well as technology and expertise. These
strengths are the source on which we draw to create value in society, and we leverage them throughout the value chain,starting with R&D and extending to sales activities, design, procurement and manufacturing, construction management,
commissioning and after-sales service, and the Head Oﬃce functions that underpin those processes.

Motivated by a desire to solve issues facing customers, ourfounder Tsunekichi Takuma invented the TAKUMA boiler basedon a unique design following a period of painstaking research,making a signiﬁcant contribution to the development ofJapanese industry through its performance that overwhelmed
the foreign technologies that dominated the ﬁeld at the time.
Over more than 80 years from its founding in 1938 until
today, the Takuma Group has carried on its founding spirit ofServe society through boiler manufacturing by creatingproducts that support society, including not only boilers, but also
products such as waste incineration plants and water treatment
plants that apply boiler combustion technology and water
treatment technology, in response to the issues faced bycustomers and the needs exhibited by society over time,
including the rebuilding of Japan's economy following WorldWar II, the subsequent period of high economic growth, andeﬀorts to deal with the pollution that accompanied those phasesof the nation's history.
Through these products and the after-sales service oﬀered forthem, we have accumulated a variety of technology andexpertise related to after-sales service and plant engineering
around core combustion technologies developed through ourboiler business while contributing to the development of society
and helping solve issues faced by customers, including by
working to increase the production capacity of customers'
facilities, enhance society's environmental sanitation, andprevent pollution.
Today, we continue to provide optimal products and services
that meet customers' needs by drawing on our philosophy ofworking closely with customers, and on these technologies todesign and build plants that operate stably over the long term byburning a variety of fuels and waste types in a stable manner,and by oﬀering after-sales service for those facilities.

Our Founder Tsunekichi Takuma

The secret to Takuma's strengths

Relationships oftrust with customers
Relationships of trust with customers built up
over the 83 years since our founding

Proposals crafted from the customer's
perspective
Engineering capabilities developed throughmany years of experience
Custom-made designs based on
manufacturing technologies and capabilities
Fast, precisely-targeted after-sales service
Use of these to supply plants that operate
stably over the long term

Technology and expertise
The technology and expertise that comprise
Takuma's high-performance plant designand construction capabilities

Since our founding, we have earned customers' trust bycontinually drawing on extensive technology and expertise as apartner that works closely with customers to oﬀer proposals andservice that align closely with their needs, from the plant design
stage to construction and after-sales service. In addition to
generating proposals of solutions through after-sales service,this approach leads to orders received through repeat demand.
As software continues to evolve rapidly during the Fourth
Industrial Revolution, we will continue to resolve issues faced bycustomers and society by advancing our products and services,for example to save facility labor and automate operations,through the incorporation of digital technologies.

Combustion technologies for burning a variety
of fuels and waste types, including not only
biomass but also household waste andsewage sludge, in a stable manner, as
developed around core boiler combustion
technologies
Heat recovery technologies for eﬃciently
recovering heat as energy through boilers
Water treatment technologies developed from
improving supply water quality and purifying
waste water for boilers and waste incineration
plantsPollution-preventing technologies, forexample to treat (or clean) ﬂue gases
Technology for manufacturing boilers thateﬃciently convert heat into steam, electrical
power, and other forms of energy
Plant and system engineering capabilities
developed from boiler installation
technologies and through after-sales service
experience and expertise to take into accountthe entire life cycle, from construction tooperation and maintenanceOperation management and maintenancecapabilities accumulated through after-sales
service provided for a large number of plants

27

TAKUMA CSR Report 2021

28

Section 01

Growth Strategies

Vision 2030 Long-Term Vision
Vision for FY2030

The Takuma Group's
management strategy
The Takuma Group formulated Vision 2030
as its long-term vision for 2030.
To realize this vision, we are pursuing the necessary
investments and business strategies.

Company Motto
Management Principles
Vision 2030 Long-Term Vision
Implementing ESG management
13th Medium-Term Management Plan
(FY2021 to FY2023)
P37
Business Strategies

Based on these external environmental factors, the Takuma Group will implement Environment, Social, and Governance(ESG) management, an approach that consists of addressing key ESG-related issues in an eﬀort to achieve sustained
growth by resolving issues faced by customers and society through business activities.
In pursuing business activities built on a core of ESG management, we will strive to become a great partner for ourcustomers by leveraging the technologies and expertise related to energy utilization and environmental protection that are
the Group's strengths, along with the relationships of trust we have developed with customers over the long term throughafter-sales service and other interactions. Through the useful technologies and services created through innovation by theGroup, which carries on the spirit of a tenacious inventor, we will resolve challenges faced by customers and society, with afocus on the ﬁelds of renewable energy utilization and environmental protection.
Through the implementation of ESG management in this manner we will seek to achieve sustained growth alongside ourcustomers and society and realize a sustainable society while securing ordinary proﬁt of JPY 20.0 billion as a yardstick of
proﬁtability.

Aim to maintain our role of being an indispensable presence in society
as a leading company in the ﬁeld of renewable energy utilizationand environmental protection.

P41

Sustainable growth alongside our customers
and society through implementation of ESG management

FY2030

Provision of technologies and services

Vision 2030
Aim to maintain our role of being an indispensable presence in society
as a leading company in the ﬁeld of renewable energy utilization and environmental protection
by realizing sustained growth alongside our customers and society through implementation of ESG management.

Innovation

Ordinary proﬁt

20.0

Resolution ofchallenges

Long-Term Vision

JPYbillionCustomers

FY2020
Takuma Group

SocietyOrdinary proﬁt

11.0

JPY
billionCreative R&D

Sharing ofneeds and issues

Sustainable growth by implementing ESG management
Financial target

FY2030 ordinary proﬁt:

JPY 20.0 billion

External environment outlook
Global-scale concerns include a worsening of the problem of climate change; deterioration in the sanitation environment
due to rapid population growth and urbanization, particularly in emerging nations; and growth in energy demand. Concerns
in Japan include falling internal demand caused by the shrinking and aging of Japan's population, shortages of humanresources and future leaders, tight ﬁnancial conditions, and aging infrastructure.

GlobalDomestic(Japan)29

Rising demand for resources, food, water, energy, and waste treatment as the planet's population grows
Increasingly serious problem of climate change
Progress of the Fourth Industrial Revolution and the digital transformation (DX)
Shortages of human resources and future leaders caused by the shrinking and aging of Japan's
population; depopulation around large cities and in rural areas
Tight ﬁnancial conditions caused by declining tax revenues in the face of the shrinking
population and the need to deal with natural disasters and infectious disease
Contraction and streamlining of public services due to tight ﬁnancial conditions; increasing
reliance on private-sector companies
Demolition, consolidation, eﬀective use, and replacement of aging and underutilized
infrastructure, houses, etc.

Realizing solutions to challenges faced by customers and society,with a focus on renewable energy utilization and environmental protection

Provision of technologies and services
Expanding clean energy
Improving energy eﬃciency
Capturing and eﬀectively utilizing CO 2
Reducing power and manpower
requirements of plant facilities while
making them more resilient

Reducing greenhouse gas emissions
Realizing stable treatment of waste
Providing decarbonization
technologies

Saving energy
Utilizing unused resources
Realizing local production andconsumption of energy

Takuma Group business activities
EPC business

Recurring revenue model businesses

Overseas businesses

Engineering, Procurement,
and Construction (EPC) of a variety of plants

Maintenance, operation management,
O&M, energy services, etc.

EPC and after-sales service for Energy
from Waste plants and biomass power plants

Maintenance and expansion of position
as a leading company

Additional expansion
as a core driver of growth

Expansion with a focus on
emerging nations in Asiaand its development into a core businessfor the Group

Package boiler business

Equipment and systems businessNew businesses

Expanding business domain
as a manufacturer specializingin heating systems

Aiming for steady growthby strengthening corporate strength

Creating new business
opportunities centeredon the renewable energy
and environmental ﬁelds

TAKUMA CSR Report 2021

30

Section 01

Growth Strategies

Implementing ESG Management: Key Issues (Materiality) for the Takuma Group

Implementing ESG Management

Key Issues (Materiality) for the Takuma GroupWe are implementing ESG management, which seeks to satisfy all stakeholders and realize sustained growth for the Groupby strengthening initiatives that address ESG issues through our business activities.
In this approach, we have identiﬁed seven key issues (Materiality) related to ESG that deserve to be given priority whenbeing addressed through our business activities.
To realize a sustainable society, we will create positive outcomes by addressing these issues through our business activities.

The Group has identiﬁed seven key issues (Materiality) and 19 issues that deserve to be given priority when being
addressed through our business activities.
We are pursuing initiatives to strengthen our business activities and management foundation for each of these materialities
and issues.

Process for identifying key issues

Business activities
Domestic Environment and Energy Business

Package Boiler Business

Overseas Environment and Energy Business

Equipment and Systems Business

The following process was used to identify key issues.

Analyzing the status quo and organizing issues

Step1

Key Issues (Materiality)

We analyzed a variety of management issues that aﬀect the company from the dual
perspectives of the external and internal environment.
We compiled a list of 64 issues by analyzing the external environment from the standpointof ISO 26000, GRI, SDGs, FTSE, DJSI indicators and requirements, and the internal
environment from the standpoint of indicators provided by the Group's Management
Principles, strategies, current initiatives, and other yardsticks.

Evaluating their importance and verifying suitability

Step2
Helping combat
climate change

Conserving resources
and protecting
the environment

Strengthening relationshipsof trust with customers
and communities

Pursuing
partnerships and innovation

We created a matrix organizing the 64 issues identiﬁed in Step 1 by analyzing andevaluating their importance for stakeholders and society on the vertical axis and theirimportance for the Group on the horizontal axis. We then veriﬁed the suitability of the list
through a process that included steps such as an internal exchange of views to narrow
down the list of issues to 19 that deserved to be addressed by the Group.

Identifying key issues

Step3
Promoting activities ofhuman resources

Ensuring
safety and healthThrough discussions among members of the company's executive leadership, the following
list of key issues to be addressed by the Group was ﬁnalized based on the 19 issues.

Strengthening
corporate governanceOutcome

The environment
Creating clean energy
Reducing greenhouse gas emissions
Reducing environmental impacts

Customers and regional society
Helping create sustainable communities
Protecting the living environment
Maintaining industrial infrastructure

Shareholders, business partners
and employees
Increasing corporate value
Building stable relationships of trust
Realizing a workplace environment
characterized by high motivation

Takuma will strive for social contribution, corporate value enhancement,
long-term corporate development, and the satisfaction of all stakeholders by providing products
and services that are needed and recognized as valuable in society.

31

Importance for stakeholders and society

Extremely important

Key issues (Materiality) as identiﬁed
Helping combat climate change
Conserving resources and protecting the environment
Strengthening relationships of trust with customers and communities
Pursuing partnerships and innovation
Promoting activities of human resources
Ensuring safety and healthStrengthening corporate governanceImportant

Importance for the Takuma Group

Extremely important

TAKUMA CSR Report 2021

32

Section 01

Growth Strategies

Key Issues (Materiality) for the Takuma Group
Materiality and KPI (Key Performance Indicator)
Materiality

Helping combat climatechangeDetailed
description

P59

Issue

1. Promoting renewable energy(non-fossil energy)
2. Improving energy eﬃciency

E
Environmental
initiatives

Conserving resources
and protecting theenvironment

P59

1. Conserving resources andreducing environmental impacts
2. Making eﬀective use ofunutilized resources

1. Pursuing customer satisfaction

Strengthening
relationships of trustwith customers andcommunities

S

Pursuing partnerships
and innovation

P65

2. Ensuring the stable, continuous
operation of plants andequipment
3. Recycling local resources
and creating new value forcommunities

P67

1. Utilizing digital technologies(AI, IoT, robots, etc.)
2. Developing open partnerships
3. Pursuing innovation

Reason for selection

We will help alleviate the global
problem of climate change using
the technology and expertise wehave accumulated over more than
80 years.

We will contribute to the eﬀective
use of unutilized resources andto the conservation of resources
with Takuma technologies while
helping make it possible to reduce
environmental impacts and realize
a Sound Material-Cycle Society.

We will help resolve issues facing
customers and communities andstrengthen relationships of trust byproviding safe,
high-quality products and services
and undertaking initiatives that
address local resource recycling.

We will facilitate the supply of highvalue-added products and services
by introducing digital technologies
and expanding partnerships withoutside companies.

Socialinitiatives

Promoting activities ofhuman resources

P69

1. Securing, and training humanresources
2. Promoting diversity
3. Improving employee satisfaction

Ensuring safety andhealthG
Governanceinitiatives

33

Strengthening
corporate governance

1. Ensuring occupational safety
and healthP71

2. Managing employee health
3. Creating a comfortable working
environment

P73

1. Strengthening corporate
governance
2. Strengthening risk management
3. Ensuring compliance

Putting in place an environment
in which all employees canmake the most of their abilities isessential in order to facilitate thecompany s growth and strengthen
its competitiveness.

Safeguarding the physical andmental health of workers andbuilding a comfortable working
environment helps create a stablefoundation for Takuma s value
creation activities.

Strengthening corporate
governance both supports
companies stable growth and helps
avoid and reduce losses and otheradverse events by making possible
the organizational management of
risk.

Risks and opportunities【Risks】
Accommodation of policies and regulations intended to realize a decarbonizedsociety
Changes in customer requirements, for example additional improvements inenergy efficiency
Reduction in support from policies, for example as a result of the review of the
FIT program【Opportunities】
Growth in the market for renewable energy and environmental businesses due
to strengthening of environmental regulations
Growth in energy usage demand for biomass (including waste, sewage sludge,
and other resources) in order to alleviate climate change【Risks】
Reduction in domestic waste volume due to the shrinking of the population【Opportunities】
Growth of appropriate treatment of waste and growth in demand for use ofenergy from waste in emerging nations
Growth in expectations towards resource-saving and low-environmental-impact
systems and the eﬀective use of unutilized resources【Risks】
Loss of trust in the event Takuma fails to provide safe, high-quality products
and services
Shrinking budgets of local governments【Opportunities】
Growth in demand for biomass power generation as a type of energy that canbe produced and consumed locallyGrowth in expectations toward the creation of new value for communities, forexample through disaster prevention facilities and energy centers
Additional growth in the use of private-sector entities to provide government
services【Risks】
Opportunity loss due to lag in accommodating new technologies such as
Artificial Intelligence (AI) and the Internet of Things (IoT)【Opportunities】
Growth in demand for efficiency-boosting and labor-saving technologies inplant operation (remote monitoring and operation, data analysis, maximizationof amount of power sold, etc.)
Creation of revolutionary technologies and services as well as new business
opportunities through the expansion of partnerships【Risks】
Reduction in competitiveness due to a shortage of employees with specializedskillsDiscontinuity in the passing down of skills as highly experienced employees
reach retirement age and leave the workforce【Opportunities】
Strengthening of competitiveness through human resources development andmanagement that promotes diversity【Risks】
Reduction in productivity and social trust due to problems involving the safety
and health of employees and affiliates (loss of order opportunities due to theoccurrence of serious occupational accidents, etc.)【Opportunities】
Improvement in productivity and strengthening of competitiveness throughimprovements in the workplace labor environment【Risks】
Reduction in business sustainability due to a lack of appropriate
decision-making
Cessation of business due to violations of competition or environmental law or
regulations on conduct such as corruption, and associated reduction in social
trust【Opportunities】
Improvement in the ability to create value along with avoidance and reductionof risk as a result of strengthened corporate governanceSpeciﬁc initiatives

Supply of biomass power plants
Supply of fuel conversion (biomass, RPF, etc.) boilers
Supply of renewable energy and CO2-free power
Reduction in CO2 emissions (energy consumption) by Takuma
Improvement in energy efficiency at facilities Takuma operates
on a contractual basis
Proposal of energy efficiency improvements for customer
facilities and equipment

Supply of high-eﬃciency, low-environmental-impact Energy
from Waste plants
Supply of sewage sludge-fueled power plants
Supply of advanced treatment sand ﬁlter systems
Establishment of combustion technology for unutilizedbiomass
Development of technology for reusing incineration ash
Development of technology for recovering and using CO2

KPI

Magnitude of potential
reduction in CO2 emissions
due to newly delivered power
plants*
FY2023: 800,000 tons
per year
FY2030: 2.5 million tons
per year*Biomass power plants andEnergy from Waste plants
delivered from FY2021 toFY2030

Supply of products and services that satisfy customers
Improvements in the quality of Takuma s operation and O&M
businesses
Increasing sophistication of maintenance service
Initiatives addressing the Regional Circular and Ecological
Sphere (Regional CES), regional use, and decentralized power
supplies
Initiatives such as PPP that address additional use ofprivate-sector entities

Increases in the added value of facilities and plants
Strengthening of competitiveness in EPC operations, operation
management, and maintenance service
Pursuit of open innovation
Pursuit of new businesses that contribute to the enhancementof existing businesses and services
Development of technologies and products that are sought bysociety and customers

Hiring of new graduates and mid-career employees
Development of optimal human resources programs in
response to social changes
Development of an effective training system
Active hiring of diverse human resources and development ofcareer support programs

Number of main career trackand management positions
ﬁlled by women:
At least 35 (cumulative total
for FY2021 to FY2025)
Utilization of parenting
support programs:
At least 25% (average for
FY2021 to FY2025)
Number of fatal accidents: 0

Reduction in the occurrence of occupational accidents
Prevention of health problems and rectification of overwork
Implementation of workstyle reforms

Sustained improvement through practices such as evaluationsof the effectiveness of the Board of Directors
Continued conduct of appropriate internal audits
Additional improvement in the effectiveness of risk
management activities
Even more thorough project risk management
Implementation and ongoing reassessment of BusinessContinuity Planning (BCP)
Ongoing implementation of compliance education

Number of serious complianceviolations: 0

TAKUMA CSR Report 2021

34

Section 01

Growth Strategies

Medium-Term Management Plan

Medium-Term Management Plan

Summary of the 12th Medium-Term Management Plan (FY2018 to FY2020)

Corporate Vision (FY2012 to FY2020) and Medium-Term Management Plans to date
The Takuma Group worked to build business structures capable of consistently earning ordinary proﬁt of at least JPY 10.0
billion even as the business environment underwent major changes under the 10th to 12th Medium-Term Management
Plans in an eﬀort to realize its Corporate Vision of aiming to maintain our role of being an indispensable presence insociety as a leading company in the ﬁeld of renewable energy utilization and environmental protection and of achieving an
ordinary proﬁt of JPY 10.0 billion in FY2020.

As the ﬁnal stage of our Corporate Vision, we implemented business strategies based on a set of basic policies andpriority measures in an eﬀort to achieve cumulative ordinary proﬁt of JPY 33.0 billion over three years by building a resilientbusiness and management foundation that enables Takuma to respond to future changes in the business environment. In
terms of ordinary proﬁt, we were able to achieve the targets set forth in the Corporate Vision and Medium-Term Management
Plans to earn at least JPY 10.0 billion starting in FY2016, JPY 11.0 billion in FY2020, and a cumulative total of JPY 33.6
billion under the 12th Medium-Term Management Plan from FY2018 to FY2020.

Positioning of the 12th Medium-Term Management Plan
Final stage of the Corporate Vision that was launched in FY2012

Medium-and
Long-Term Vision

Medium- and Long-Term Vision (Corporate Vision)

Long-Term Vision

FY2012 to FY2020

FY2021 to FY2030

Through FY2011

Strive to achieve cumulative consolidated-basis ordinary proﬁt of JPY 33.0 billion over three years by building a resilient business andmanagement foundation that enables Takuma to respond to future changes in the business environment.

Results and issues
9th Medium-Term
Management Plan

10th Medium-Term
Management Plan

11th Medium-Term
Management Plan

12th Medium-Term
Management Plan

13th Medium-Term
Management Plan

(FY2009 to FY2011)(FY2012 to FY2014)(FY2015 to FY2017)(FY2018 to FY2020)(FY2021 to FY2023)

Proﬁtability throughselection and concentrationof resources

Reinforcement ofbusiness foundation forstability and proﬁtability

Steady expansion interms of both quantityand quality

Strengthening ofcorporate capability tofacilitate steady growth

Laying the foundations
for additional growth

Cumulative ordinary proﬁt results

Cumulative ordinary proﬁt results

Cumulative ordinary proﬁt results

Cumulative ordinary proﬁt results

JPY

1

2

Ordinary profit(right axis)

120
100

146.7

116.3
113.1

101.0

96.4

80

96.3
9.4

89.1
7.3

11.6

103.9
9.1

122.0
118.2

(Billion JPY)
16
14

134.5

12.3

10.7

8
7.2
6

4.4

4
2

35

2010

2011

2012

2013

2014

2015

2016

2017

2018

Initiatives to improve productivity, for example by utilizing
Information and Communications Technologies (ICT), havedelivered results but remain ongoing.

4

Promoting activities of human resources

The workforce situation remains tight despite signiﬁcant expansion
in the number of hires as we work to secure the necessary humanresources.

5

Continuing to pursue compliance management

Awareness of the importance of compliance has permeated theGroup thanks to ongoing educational activities. Developing evenmore eﬀective measures remains an issue.

Initiatives to maintain our position in sludge incineration and expand
the overseas business are ongoing.
Progress in eﬀorts to reﬁne core technologies and development ofproprietary technologies has generally been smooth.

１０

20
0

Increasing productivity,for example by reforming business processes

11.0

60
40

3

12
10.3

9.6

Achieving sustained growth

In the EPC business, we maintained our market position thanks tosteady or increasing orders for domestic waste treatment andenergy facilities.

at least JPY 10.0 billion even as the business environment undergoes major changes

Net sales(left axis)

Progress made in initiatives designed to reduce Life Cycle Costs(LCC), for example by using POCSYS ® P42 .

Firm orders secured for package boilers as well as equipment andsystems helped to contribute to stable consolidated-basis proﬁts.

Building structures capable of consistently earning ordinary proﬁt of

140

Orders increased as we proposed solutions based on customers
needs through recurring revenue model businesses (equipment
improvements and service life extensions).

Received multiple orders in our O&M business, including from theprivate-sector for the ﬁrst time, in our Energy Plant Business; began
operations and broadened the range of services we oﬀer.

13.7 billion JPY 25.7 billion JPY 31.9 billion JPY 33.6 billion(Billion JPY)
160

Strengthening and expanding our revenue foundation

20192020 (FY)

10th Medium-Term Management Plan

11th Medium-Term Management Plan

12th Medium-Term Management Plan

Reinforcement of business foundation forstability and proﬁtability

Steady expansion in terms of bothquantity and quality

Strengthening of corporate capability tofacilitate steady growth0

Financial targets and results under previous medium- and long-term vision andthe 12th Medium-Term Management Plan
Previous medium- and long-term vision:
FY2020 ordinary profit …………………………… Target JPY 10.0 billion → Result JPY
12th Medium-Term Management Plan:
Cumulative three-year ordinary profit ………… Target JPY 33.0 billion → Result JPY

11.0 billion
33.6 billion

TAKUMA CSR Report 2021

36

Section 01

Growth Strategies

Medium-Term Management Plan

13th Medium-Term Management Plan (FY2021 to FY2023)
We will develop measures to fuel additional growth as a plan for taking the ﬁrst steps towards realizing the ﬁnancial targetof ordinary proﬁt of JPY 20.0 billion as set forth in Vision 2030. Speciﬁcally, we will work to earn cumulative ordinary proﬁtof JPY 36.0 billion over three years while strengthening conventional businesses and accommodating future environmental
changes in every area of our business activities by strengthening six core areas of our management, including investments
in human resources and digital technology.

Positioning
Lay the foundations for additional growth and take the ﬁrst steps under the 13th Medium-Term Management Planas we prepare to realize the Vision 2030 target of ordinary proﬁt of JPY 20.0 billion.

On implementing
the 13th Medium-Term
Management Plan
Hideki Takeguchi

Tsuyohito Nishiyama

Director & Senior Managing
Executive Oﬃcer
Executive Manager
of Engineering Group

Director & Senior Managing
Executive Oﬃcer
Executive Manager
of Corporate Marketing Group

Financial target

JPY 36.0 billion

Cumulative ordinary proﬁt
from FY2021 to FY2023

Previous vision
12th Medium-Term Management Plan

Vision 2030

FY2020
The Group s ﬁnancial foundations
were strengthened prior to the 12th
Medium-Term Management Plan.
Ordinary proﬁt

11.0 billion

strategy towards implementation

FY2030First steps towards
realizing Vision 2030

JPY

Plan positioning and business13th Medium-Term Management Plan

Ordinary proﬁt

Laying the foundations
for additional growthJPY

20.0 billion

Three-year
cumulative ordinary proﬁt

JPY

36.0 billion

13th Medium-Term Management Plan ﬁnancial targets(cumulative 3-year targets)

Ordinary proﬁt: JPY 36.0 billion
Orders received: JPY 450.0 billion (reference)

Basic policy

The Group has worked throughout its history to resolve social

Based on the results and issues ofissues such as climate change and environmental protection

the 12th Medium-Term Management

through its business activities, for example by supplying municipal

Plan, the 13th Medium-Term Manage-

solid waste treatment plants and biomass power plants, and thisment Plan seeks to lay the foundations

approach aligns with the ESG management approach. The new

for additional growth while securing

Medium-Term Management Plan identiﬁes the Takuma Groupcumulative ordinary proﬁt of JPY 36.0

Materiality that deserve to be addressed on a priority basis throughbillion over its three-year period as theour business activities and establishes Key Performance Indicators

ﬁrst step towards realizing the target of(KPI) in order to clarify these initiatives. We will strive to achieve

ordinary proﬁt of JPY 20.0 billion as set

sustained growth by continuing to address materialities that help

forth in Vision 2030. To achieve theseresolve social issues through business activities that resolve

targets, we will steadily earn and carrycustomers issues and implementing ESG management.

out EPC projects with a focus on ourStrengthening conventional businesses by reinforcing the Group s management foundation

ﬂagship businesses, the Municipal Solid Waste Treatment Plant Busi-

and at the same time accelerating its response to future environmental changes

ness, Energy Plant Business, and Water Treatment Plant Business,

In addition to further developing an approach to ESG manage-

Striving to realize sustainable growth alongside customers and society by implementing ESG management

while expanding after-sales service such as operation management

ment that has already taken root at Takuma in order to achieve thethrough these business activities

and maintenance of facilities and equipment delivered across all oftargets set forth in the 13th Medium-Term Management Plan and,our businesses (recurring revenue model businesses). We will also

on a longer-term basis, in Vision 2030, we will further enhance

work to maintain and expand the Package Boiler Business and theand expand recurring revenue model businesses by treating themEquipment and Systems Business. Additionally, we will pursue initia-

as drivers of the Takuma G roup stives with goals such as expanding the Power Retail Business, study-

growth in order to realize stable opera-

ing new businesses, and growing overseas businesses as the foun-tion of facilities over the next 20 to 30

dation for realizing Vision 2030, and we will strengthen our manage-

years. At the same time, we will work

ment foundation through initiatives including hiring and training theto maintain and expand our position as

human resources who will be necessary in order to pursue thea leading company in the Engineering,Group s business strategies, pursuing a range of partnerships as well

Procurement, and Construction (EPC)

as R&D, embracing digitalization, and updating the Harima Factory.

business.

Implementing ESG management to ensure sustained growth

together to implement the 13th Medi-

Implementing ESG management
Pursuit of business activities that help resolve challenges faced by customers and society❶ Municipal Solid Waste Treatment
Plant Business❷ Water Treatment Plant Business❸ Energy Plant Business❹ Power Retail Business❺ Overseas Businesses❻ New Businesses❼ Package Boiler Business❽ Equipment and Systems
BusinessStrengthening
conventional
businesses

Human resources
R&D
Manufacturing and engineering capabilities

Digital technologies
Capital investment

P41-50

Responding
to environmental
changes

Conclusion

In this way, the Group will comeStrengthening the management foundation37

by actively pursuing ESG.

Partnerships
ComplianceWith a focus on evaluating companies from a non-ﬁnancial

um-Term Management Plan and create

standpoint, ESG provides a set of indicators for measuring how

a bright future by growing in a sustained

well a company is working to resolve social issues through its busi-

manner alongside its customers andness activities. We believe that sustained growth can be realizedsociety.

TAKUMA CSR Report 2021

38

Section 01

Growth Strategies

Medium-Term Management Plan

Strengthening the management foundation

Partnerships

We will work to strengthen the following six core areas of our management by allocating and investing management
resources to steadily implement our business strategies.

Human resources
In addition to systematically hiring and training thehuman resources who will be necessary in order tomaintain and expand the Group s business activities andto accommodate the changing times, we will strive tostrengthen the Group s competitiveness and realize
additional growth through initiatives in areas such as
promoting diverse workstyles and fostering employee
health.

Corresponding principal Materiality and issues
Promoting diversity
Managing employee health

Theme 1

Strengthening recruiting activities andreviewing employment systems

Systematically hiring new graduates and mid-career employees
Reviewing programs to make use of older workers and to hire
specialized workers

Theme 2

Reviewing the human resources development system

The Takuma Group is pursuing a partnership-based
initiative to operate municipal solid waste treatment plants,
which play a role as disaster prevention facilities. As theRegional Circular and Ecological Sphere (Regional CES)*
and activities to realize carbon neutrality by 2050 gather
momentum, we will continue to pursue initiatives to create
new value in communities while making use ofpartnerships with outside companies and organizations.

Making eﬀective use of unutilized resources
Recycling local resources and creating new value for communities
Developing open partnerships

Theme

Creating new value through alliances

Pursuing robust partnerships with non-group companies and otherstakeholders in a variety of contexts*An approach that seeks to make the most of regional energy through mutual
support and the supplementation of resources in line with regional
characteristics while facilitating the formation of autonomous, decentralized
communities and making maximum use of regional resources like beautiful
natural landscapes (source: website of the Ministry of the Environment)

R&D, manufacturing, and engineering capabilities
In addition to enhancing our technologies in plant-relatedﬁelds, we will strengthen our business competitivenessthrough further improvements to the safety and quality of
products and services supplied by the Group.

Implementing career development support measures such as job
rotation programs to help train engineers and other personnel,
programs to follow up on the development of young workers, etc.

Theme 3

Corresponding principal Materiality and issues

Corresponding principal Materiality and issues
Pursuing innovation
Pursuing customer satisfaction
Ensuring occupational safety and health

Theme 1

Strengthening R&D

Creating products and services required in this new era by utilizing
open innovation

Pursuing workstyle reforms andenhancing the workplace environment

Theme 2

Examining a diverse range of workstyles that allow workers to dotheir jobs without regard to time or place

Strengthening manufacturing andengineering capabilities

Reﬁning and improving the quality of core technologies, the overallplant, and main equipment

Implementing health-focused management

Increasing intrinsic safety in design and installation, and preventing
occupational accidents

Digital technologies
In addition to providing continuous remote monitoringand operational support for customer plants through our
Solution Lab, we are implementing initiatives to realize
stable, eﬃcient plant management by utilizing big datafrom plants through our POCSYS ® Plant Optimization
Comprehensive Support System. Going forward, we will
strive to realize additional growth for the Group by working
to improve plant added value and strengthen
competitiveness in EPC as well as after-sales service
through the use of digital technologies such as Artiﬁcial
Intelligence (AI) and Information and Communications
Technologies (ICT).

Corresponding principal Materiality and issues
Ensuring the stable, continuous operation of plants and equipment
Using digital technologies

Theme 1

Bringing digital technologies to products and services

Rolling out digital technologies to reduce manpower requirements
and streamline operations at plants, improve maintainability andfunctionality, and realize more stable operations

Theme 2

Capital investment
In implementing our plan for the new Harima Factory, we
will strive to realize a sustainable plant that is eﬀectively
CO 2 emission-free while further increasing productivity andquality.

Corresponding principal Materiality and issues
Improving energy eﬃciency
Pursuing customer satisfaction

Theme

Pursuing plans for the new Harima Factory

Developing a sustainable plan that aims to achieve eﬀectively zero
CO 2 emissions
Improving boiler manufacturing capabilities (quality and eﬃciency)

Improving management eﬃciency

Examining ways to utilize the Supply Chain Lab P42

Implementing paperless workﬂows and Robotic Process Automation(RPA)
Sharing knowledge and expertise on a companywide basis(Artist s conception of new Harima Factory)
Tentative completion: December 2022
Total investment: approximately JPY 13.0 billion

Compliance
We will continue to promote compliance as a key
foundation that sustains corporate activities throughongoing compliance education and other programs whileworking to realize further improvements in the eﬀectivenessof our risk management activities.

Corresponding principal Materiality and issues
Strengthening corporate governance

Theme

Increasing the eﬀectiveness of complianceand risk management

Improving and enhancing educational programsContinuing and improving risk management activities P81

39

TAKUMA CSR Report 2021

40

Section 01

Growth Strategies

Business Strategies

Domestic Environment and Energy Business
Municipal Solid Waste Treatment Plant Business

2

Strengths

Since delivering Japan s ﬁrst fully continuous mechanical waste incineration plant in 1963, Takuma has supplied more than 360
municipal solid waste treatment plants, more than any other manufacturer in Japan. In addition to supplying products and services thatmeet regional needs based on the technology and expertise that we have accumulated through a long series of improvements acrossmore than half a century, we are working to further increase the value we provide by incorporating leading-edge technologies like Artiﬁcial
Intelligence (AI) and the Internet of Things (IoT).

Our achievements (cumulative deliveries to local governments)

1

Business Summary

We provide solutions that extend throughout the plant life cycle, from construction (EPC) of municipal solid waste treatment plants
for local governments to maintenance, primary equipment improvement and service life extension, operation management, andoperation (O&M).

Waste incineration plants ……………………………………… over 360 facilities
Recycling plants …………………………………………………… over 90 facilities
Biogas recovery plants …………………………………………………… 2 facilities

3
Principle products
Waste incineration plants, biogas recovery plants, recycling plants, etc.

Market Environment

Some 1,000 facilities in Japan incinerate about 170,000 tons of waste per day, and those plants are aging, with more than 60% ofthem having been operating for at least 20 years. With many facilities built during the 1990s to address the problem of dioxin emissions
reaching the point in their service lives at which they need to be updated, we expect to see strong replacement and service life extension
demand continue for the time being.
Use of the O&M business, which comprises a comprehensive contract for facility operation management and maintenance, and DBO
arrangements, which comprise orders for both facility construction and operation (O&M), is growing from the standpoint of taking
advantage of private-sector expertise. At the same time, facilities are expected to provide functionality that creates new value for theirregion, for example by serving as regional disaster prevention facilities or energy centers, rather than simply treating waste.
Furthermore, as society works to realize carbon neutrality by 2050, we expect to see more sophisticated use of waste to generate
electricity and heat along with growing demand for biogas recovery (methane fermentation) plants and combined systems that pairincineration with methane fermentation and other technologies.

4

Initiatives

Strengthening conventional businesses
Improving quality and strengthening proﬁtability in the plant
operation business and after-sales service businessMaximizing proﬁtability by extending the service life of existing
facilities

Responding to environmental changes
Developing structures that will allow us to provide newservices, for example additional use of private-sector
partners and Regional Circular and Ecological Sphere(Regional CES) businesses

Ensuring a sustained ﬂow of orders by creating customer value

Currently, about 120 of the municipal solid waste treatment plants we have delivered continue to operate, and we are supporting safe,
stable, and appropriate waste treatment in their regions through after-sales service including regular maintenance, functional improvements, service life extension work, and operation management.
In an eﬀort to enhance its after-sales service oﬀerings, the Takuma Group began oﬀering remote support service for customer plants in
2004, and in 2016 we launched the POCSYS ® Plant Optimization Comprehensive Support System, which dramatically enhanced thatfunctionality. Then in 2019, we opened the Solution Lab as a remote monitoring and operation support facility. In addition to supplying safe,
secure, and stable plant operation to customers through 24-hour operational support, we are helping streamline plant operation, for example
to increase the amount of power sold and reduce chemical consumption, by analyzing, visualizing, and otherwise utilizing operating data.
Furthermore, we plan to launch the Supply Chain Lab, an after-sales service facility, in December 2022, and we will work to realize
additional quality and proﬁtability improvements in after-sales service by eﬀectively utilizing these resources.
Going forward, municipal solid waste treatment plants will be called upon to create new value in order to resolve regional issues, forexample by promoting the recovery and use of waste energy, serving as disaster prevention and energy facilities, and revitalizing regional
economies as part of the eﬀort to realize a decarbonized society and Regional Circular and Ecological Sphere (Regional CES) (local SDGs).
In addition to promoting power and labor savings in plant operation through the use of digital technologies while working to realize more
eﬃcient energy recovery through the reﬁnement of combustion technology and energy recovery technology, which are core Takuma
technologies, as well as use of Artiﬁcial Intelligence (AI) and the Internet of Things (IoT), we will help resolve regional issues by creating
new value through the expansion of our Power Retail Business and through partnerships with various companies and organizations.

Materiality

41

Helping combat climate change

Strengthening relationships of trust with customers and communities

Conserving resources and protecting the environment

Pursuing partnerships and innovation

TAKUMA CSR Report 2021

42

Section 01

Growth Strategies

Business Strategies

Water Treatment Plant Business

1

Business Summary

In addition to construction (EPC) and maintenance of water treatment and sludge incineration plants, particularly for sewage treatment
plants run by local governments, we supply operation management and other services.

Principle products
Sewage sludge-fueled power plants, moving-bed sand filtration systems (Uniflow Sand Filter), etc.

2Strengths

Since entering the water treatment ﬁeld in 1962, we have accumulated technology and expertise by supplying water treatment plants
and sludge incineration plants in a variety of ﬁelds, including sewage, human waste, and industrial wastewater. In recent years, we havebeen particularly focused on the sewage treatment ﬁeld, and we are helping resolve customers issues with unique technologies like anenergy-saving and energy-creating sludge-fueled power generation system featuring low emissions of the greenhouse gas N 2O andmoving-bed sand ﬁltration systems (Uniﬂow Sand Filter), of which we have delivered about 2,700 units since 1979.

Our achievements (to date)Moving-bed sand ﬁltration systems (Uniﬂow Sand Filter)…… over 2,700 units
Sewage sludge incineration plants……………………………… over 20 facilities

3

Market Environment

There are some 2,200 sewage treatment plants in Japan, and those facilities are aging, with more than 80% having been operating forat least 15 years.
Additionally, as we work to realize a decarbonized society, there is growing need to reduce greenhouse gases in sewage treatment andto utilize sewage sludge, a type of biomass, as a form of renewable energy.
At the same time, we expect utilization of the private sector through arrangements such as Public Private Partnerships (PPPs) andPrivate Finance Initiatives (PFIs) to increase in the future due to the challenging management environment in which sewage projects run
by local governments must operate.

4

Initiatives

Strengthening conventional businesses
Ensuring a sustained ﬂow of orders for sludge incineration
plantsResponding to environmental changes
Developing structures that will allow us to accept
long-term comprehensive contracts

Expanding the after-sales service business
Accommodating replacement demand from existing facilities

The sludge-fueled power generation system we developed diﬀers from conventional incinerators in that it does not require auxiliary fuel,and it excels in terms of environmental performance thanks to its low emissions of the greenhouse gas N 2O, an issue aﬀecting
incineration treatment of sewage sludge. Moreover, the system is capable of generating electricity, and its low consumption of poweroﬀers excellent energy-saving performance. We have received orders for three plants using this system to date, and we will help reducegreenhouse gas emissions in sewage treatment by continuing to earn more orders in the future.
Additionally, we have delivered numerous high-speed sand ﬁltration systems that boost ﬁltration speed by a factor of two to three while
adopting a compact, space-saving design. We will work to secure more orders by proposing updates that take advantage of thatspace-saving design for existing ﬁltration systems that are due for such service.

Materiality

43

Helping combat climate change

Strengthening relationships of trust with customers and communities

Conserving resources and protecting the environment

Pursuing partnerships and innovation

TAKUMA CSR Report 2021

44

Section 01

Growth Strategies

Business Strategies

Energy Plant Business

1

Business Summary

In addition to construction (EPC) and maintenance of energy plants for private-sector operators, we oﬀer operation (O&M) and otherservices.

Principle products
Biomass power and heat-use plants, RPF power and heat-use plants, industrial waste treatment plants, etc.

2Strengths

Since our founding in 1938, we have manufactured an array of boilers for industrial, power, marine, and other applications, and wehave delivered more than 3,200 boilers throughout Japan and around the world. Over the course of our long history, we have helped
reduce and eliminate dependence on carbon on the part of customers and society through the supply of plants that recover energy from avariety of biomass and non-fossil fuels such as wood, poultry manure, and RPF based on proprietary combustion and heat recovery
technologies that we have improved and evolved together with customers.

Our achievements (to date)
Boilers ……………………………………………………………… over 3,200 units
Of which, biomass boilers…………………………………………… over 630 units
Industrial waste treatment plants …………………………… over 120 facilities

3

Market Environment

Since Japan s 2012 launch of its Feed-In Tariﬀ (FIT) program, which imposes ﬁxed pricing on purchases of renewable energy, demandfor biomass power plants has grown rapidly. Takuma, which has long manufactured biomass boilers, has delivered more than 40 biomass
power and heat-use plants (including facilities that do not take advantage of the FIT program) since 2014, when it delivered its ﬁrst FIT
boiler. That said, as the FIT program is reviewed, we expect demand to shift towards small and medium-size biomass power and heat-use
plants as a way to implement regional-use power supplies and regional decentralized energy.
Additionally, many industrial boilers that use fossil fuels such as coal and heavy fuel oil, which are common in plant applications, aredue to be updated, and we expect that the level of need for conversions to non-fossil fuels such as biomass and RPF will grow as society
works to reduce and eliminate dependence on carbon.

4

Initiatives

Strengthening conventional businesses

Responding to environmental changes

Expanding our market presence through steady orders forbiomass power plants

Capturing demand for fuel conversions in industrial
boilers

Expanding our business through further promotion of proposals
for after-sales service businessWe expect that the business environment in which our customers operate will continue to exhibit major changes in the future, including
the drive to realize carbon neutrality by 2050 and the review of the FIT program.
We will help customers reduce and eliminate dependence on carbon in their business activities while promoting the use of renewableenergy by expanding the introduction of power and heat-use plants that utilize biomass and non-fossil fuels through plans and proposals
that precisely target customers issues and needs based on the technology and expertise we have accumulated through our extensive
track record.
Additionally, we will help customers resolve issues and further reduce and eliminate their dependence on carbon by pursuing not only
precisely-targeted maintenance, but also energy savings, power output increases, functional improvements and service life extensions forequipment, and O&M and other solution proposals for the many plants we have delivered to date.

Materiality

45

Helping combat climate change

Strengthening relationships of trust with customers and communities

Conserving resources and protecting the environment

Pursuing partnerships and innovation

TAKUMA CSR Report 2021

46

Section 01

Growth Strategies

Business Strategies

Overseas Environment and Energy Business

Power Retail Business

1

Business Summary

Takuma Energy Co., Ltd., a Group company, operates the Power Retail Business, which draws on power generated by municipal solid
waste treatment plants and biomass power plants that Takuma has delivered as its principal sources of power.

Overseas Businesses
1

2

Business Summary

We supply construction and maintenance services for biomass power plants and Energy from Waste plants with a focus on Thailand
and Taiwan, where we have local subsidiaries.

Strengths

Takuma Energy Co., Ltd., which was established in August 2015 to supply services that increase the amount of value added by plants
delivered by Takuma through the purchase and supply of power, operates the Power Retail Business.
The company is helping promote renewable energy power with a regional character in a way that takes advantage of the relationshipsthat link Takuma s customers and Group companies, for example by operating a business that facilitates the local production andconsumption of power by supplying power generated by municipal solid waste treatment plants and biomass power plants to public
facilities and other regional energy users in four regions.

Principle products
Biomass power plants,
Energy from Waste plants

Our achievements in local production and consumption of power
Hokutan region, Hyogo Prefecture ……………………… Starting in August 2016
Fujisawa, Kanagawa Prefecture ………………………… April 2017 to March 2021
Kizugawa, Kyoto Prefecture ……………………………… Starting in April 20182

Kasaoka, Okayama Prefecture ………………………… Starting in April 20193

Since delivering a bagasse ﬁred boiler (bagasse: ﬁber remaining after sugarcane is crushed) to a customer in Taiwan in 1949, we havedelivered more than 380 biomass boilers overseas, primarily to customers in Southeast Asia. Approximately 120 of those boilers weredelivered in Thailand, primarily to sugar mills, highlighting how we have contributed to the development of the country s sugar industry.
We have also delivered a total of 16 waste treatment plants to customers in Taiwan, China, South Korea, and the UK since delivering
our ﬁrst such plant overseas in the U.S. in 1986.

Market Environment

The need for decentralized energy as well as the local production and consumption of power is growing from the perspective ofsecuring energy supplies in times of emergency, utilizing energy eﬃciently, and revitalizing regions. We expect the importance of powerand energy services in the Group s business domain to grow in the future, for example in the development of the Regional Circular andEcological Sphere (Regional CES) in waste treatment and in regional-use power supplies in the FIT program.
Additionally, the level of need for renewable energy and CO 2-free power that have environmental value is growing from the perspectiveof reducing and eliminating dependence on carbon in business activities. The market is expected to grow further as society works torealize carbon neutrality by 2050.

43

Market Environment

Although we expect to continue to see a certain level of demand for bagasse-ﬁred biomass power plants in Thailand, competition with
Indian and Chinese manufacturers remains intense. At the same time, the Thai government has announced a policy of promoting biomass
power generation, and demand, including for biomass other than bagasse, is expected to grow.
On the other hand, Energy from Waste projects in the emerging nations of Southeast Asia are often derailed for reasons such as a lackof programs and standards related to waste treatment and insuﬃcient government funding, and a stable market has not yet developed.
That said, the level of need for waste-fueled power generation is rising signiﬁcantly due to population growth and urbanization, and we
expect the sector to remain a growth market over the medium and long term.

Initiatives

Strengthening conventional businesses
Expanding the scale of the business by enhancing products inareas such as renewable energy and CO 2-free power anddeveloping new sales channels

Responding to environmental changes
Examining expansion of our service menu to provide
the power demanded by communities and customers

In addition to working to expand our sales menu, for example with renewable energy power and CO 2-free power, we will seek to further
expand our business involving the local production and consumption of power through region-optimized schemes that maximize use ofenvironmental value and producing region value, with a focus on plants that Takuma has delivered. We will also work to expand our lineof services designed to resolve regional issues through partnerships with a variety of companies.

Materiality

Helping combat climate change
Strengthening relationships of trust with customers and communities

4

Initiatives

Strengthening conventional businesses
Ensuring a sustained ﬂow of orders for biomass power plants
Expanding the ﬂow of orders for maintenanceRealizing additional expansion in the local production andconsumption of power

47

Strengths

Pursuing partnerships and innovation

Responding to environmental changes
Capturing orders for Energy from Waste plants anddeveloping associated structures
Implementing global procurement

With regard to biomass power plants, we will strive to earn orders on an ongoing basis by both working to achieve further cost
reductions, such as by expanding the scope of overseas procurement, and by diﬀerentiating ourselves from Indian and Chinese
manufacturers, for example by enhancing maintenance services through our local subsidiary in Thailand.
With regard to Energy from Waste plants, we will put in place structures to secure orders, for example partnerships with local
companies, in an eﬀort to capture demand in the future, particularly in Thailand and Taiwan.

Materiality

Helping combat climate change

Strengthening relationships of trust with customers and communities

Conserving resources and protecting the environment

Pursuing partnerships and innovation

TAKUMA CSR Report 2021

48

Section 01

Growth Strategies

Business Strategies

Package Boiler Business

Equipment and Systems Business

Package Boiler Business

Equipment and Systems Business

1

1

Business SummaryGroup company Nippon Thermoener Co., Ltd., manufactures, sells, and maintains general-purpose boilers in addition to designing andbuilding related heat source equipment and systems for various types of manufacturing plants as well as hotels, hospitals, commercial
buildings, and other facilities.

Business SummaryGroup companies SUNPLANT Co., Ltd., and Dan-Takuma Technologies Inc. design and build various types of building equipment,
including air conditioning, water supply and drainage sanitation, and ﬁreﬁghting systems, and they manufacture, sell, and maintain equipment
for the semiconductor and electronic device industries, including clean rooms, chemical air ﬁlters, and magnetically shielded chambers.

Principle products

Principal products and services

Once-through Boilers (Equos)

Building equipment installation, chemical air ﬁlters,
environmental monitoring systems for use in clean rooms

Vacuum-type Hot Water Heaters (Vacotin Heater)
Heat-transfer Boilers (Thermoheater)
Flue and Smoke Tube Boilers (RE Boiler)
Hybrid Hot Water Systems, etc.

22Strengths

Over the many years since its establishment in 1961, Nippon Thermoener Co., Ltd., has supported consumer lifestyles as well as
industry by accumulating extensive experience in an array of package boilers, a type of boiler, which are used in a variety of industries
and applications. In an eﬀort to accommodate the changing times and environment as a manufacturer specializing in heat source
equipment, the company meets a diverse range of customer needs by developing new heat source systems such as hybrid hot water
systems based on the technological capabilities and expertise it has accumulated over its long history.

3

Market Environment

4

Initiatives

Strengthening conventional businesses
Maintaining and expanding the scale of orders in the existing
domestic general-purpose boiler market
Expanding our overseas businessResponding to environmental changes
Building and expanding a basis for proﬁt by developing
a new market for heating systems based on adecarbonized society

We will support consumer lifestyles as well as industry while working to maintain and expand the scale of orders received in the domestic
market by proposing optimal systems that meet individual customers needs based on our line of diverse products and to expand our overseas
business, particularly in Southeast Asia, where our Thai subsidiary is located. At the same time, we will help reduce greenhouse gases bypromoting energy-saving, high-eﬃciency systems.
Additionally, we will work to develop a new heat source equipment market that suits the characteristics of the decarbonized society of the future byoﬀering systems with greater energy-saving eﬀectiveness, for example hybrid hot water systems that combine heat pumps with vacuum-type hot water
heaters, and new heat source equipment that uses non-fossil energy sources, for example wood chip-fueled biomass boilers.

Materiality

49

SUNPLANT Co., Ltd., which operates a building equipment business, was established as a boiler installation company in 1941. After
entering the equipment construction business in 1965, the company began oﬀering a variety of building equipment for use in education
and research facilities, healthcare and social welfare facilities, commercial and cultural facilities, factories, railroad facilities, and othersites. In this way, it has supplied pleasant environments that are custom-made to suit a variety of applications and requirements based on
the technology and expertise it has accumulated over many years.
Since its establishment in 1969, Dan-Takuma Technologies Inc., which operates a semiconductor industry equipment business,
contributes to the development of the semiconductor and electronic device industries by supplying an array of clean technologies,
primarily to customers in the semiconductor industry, and by drawing on the high level of trust it has earned through its extensive trackrecord of deliveries to develop products that are customized in collaboration with customers.

3

Although the domestic general-purpose boiler market has matured and is on track to shrink over the medium and long term, the sector
remains broad in its reach. We expect a certain level of demand to continue for the time being, for example due to replacement demand.
Additionally, demand for energy-saving boilers is expected to increase overseas, particularly in emerging nations. Furthermore, eﬀorts todevelop boilers with additional energy savings and higher energy eﬃciency are expected to accelerate as part of the eﬀort to reduce andeliminate dependence on carbon, and over the long term, the ﬁeld is likely to transition to heat source equipment that uses non-fossil energy.

Helping combat climate change

Strengthening relationships of trust with customers and communities

Conserving resources and protecting the environment

Pursuing partnerships and innovation

Strengths

Market Environment

Although there are concerns that construction demand may be aﬀected by a temporary drop-oﬀ in private-sector investment due to theeﬀects of the COVID-19 pandemic, robust demand is expected to continue over the medium and long term thanks to the replacement
and repair of aging public facilities and the construction of new healthcare and social welfare facilities.
Additionally, the market for semiconductor manufacturing equipment is expanding thanks to rising semiconductor demand worldwide,
which is being fueled by the adoption of new technologies such as Artiﬁcial Intelligence (AI), the Internet of Things (IoT), and 5G̶allareas where there has been steady progress̶and by the trend towards digitalization. Going forward, markets serving the semiconductor
and electronic device industries are expected to grow over the medium and long term despite short-term ﬂuctuations.

4

Initiatives

Strengthening conventional businesses
Expanding the ﬂow of orders by improving sales andconstruction capability (equipment)

Responding to environmental changes
Improving functionality and expanding business
opportunities through alliances (systems)

Expanding market share by improving products
competitiveness (systems)

In the building equipment business, we will work to further strengthen our sales and installation capabilities by hiring, retaining, andtraining human resources, and we will strive to achieve steady growth in the scale of orders received by creating optimal environmentsthat are custom-made to suit a variety of applications and requirements.
For semiconductor manufacturing equipment, we will work to boost competitiveness by developing products that are customized incollaboration with customers and through joint research with universities, and we will strive to expand our business by supplying productsthat meet customer needs through a variety of alliances.

Materiality

Strengthening relationships of trust with customers and communities

Pursuing partnerships and innovation

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Section 01

Growth Strategies

Our Achievements

Main Recent Projects

Water Treatment Plants

This page introduces some of the main plants that Takuma supplied during FY2020 in the Domestic Environment and Energy Business.

Municipal Solid Waste Treatment Plants
New Construction
The Clean Plaza/
Regional Cleaning Union of thecity of Ota and three towns
Project name: Regional Cleaning Union of the city of Ota
and three towns Municipal Waste Treatment
Facility Construction and Operation Project
Location:
Gunma Prefecture
Capacity:
330 tons per day(165 tons per day × 2 units)
Power output: 9,700 kW

Tokyo Basin Sewerage Tamagawa Joryu
Water Reclamation Center
Project name: Tamagawa Joryu Water Reclamation Center Sludge Incineration
Facility Reconstruction Project
Location:
Tokyo
Capacity:
Sludge-fueled power generation system
Treatment capacity: 140 tons per day × 1 unit
Power output: 137 kW

Yahagi River Basin Sewerage
Yahagigawa Sewage Treatment Center
Project name: Yahagi River Basin Sewerage Water Treatment
Facility Equipment Project (No.1)
Location:
Aichi Prefecture
Capacity:
Moving-bed upﬂow continuous sand ﬁlter
Treatment volume: 20,000 m³ per day
Equipment speciﬁcations:
M60 × 6 units per pond, total of 2 ponds

Energy Plants
Miyazu-Yoza Clean Center
Project name: Miyazu-Yoza Wide-area Waste Treatment
Facility Development and Operation Project
Location:
Kyoto Prefecture
Capacity:
Waste incineration facility: 30 tons per day(30 tons per day × 1 unit)
Methane gasiﬁcation facility: 20.6 tons per day(20.6 tons per day × 1 system)
Recycling facility: 14.9 tons per day
Power output: 270 kW

Hikarigaoka Incineration Plant
Project name: Hikarigaoka Incineration Plant
Reconstruction Project
Location:
Tokyo
Capacity:
300 tons per day(150 tons per day × 2 units)
Power output: 9,150 kW

Eco Clean Center Nanetsu(No.1 Clean Center)
Project name: Nanetsu Seiso Kumiai(Sanitation Association)
New Waste Treatment Facility
Development and Operation Project
Location:
Fukui Prefecture
Capacity:
84 tons per day(42 tons per day × 2 units)
Power output: 1,470 kW

Primary Equipment Improvements

Tankou District Sanitation Center Incineration
Plant Waste Incineration Facility
Project name: Tankou District Sanitation Center Incineration
Plant Waste Incineration Facility Primary
Equipment Improvement Project
Location:
Iwate Prefecture
Capacity:
240 tons per day(120 tons per day × 2 units)
Power output: 1,990 kW

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Clean OSHIMA
Project name:Clean OSHIMA Primary Equipment
Improvement Project
Location:
Hokkaido
Capacity:
126 tons per day(63 tons per day × 2 units)
Power output: 1,600 kW

Hitachiota City Clean Center
Project name:Hitachiota City Clean Center Primary
Equipment Improvement Project
Location:
Ibaraki Prefecture
Capacity:
100 tons per day(50 tons per day × 2 units)

Gifu Biomass Power Co., Ltd.
Project name: Power Plant No.2 Generation Equipment Installation Project
Location:
Gifu Prefecture
Capacity:
Fuel: Wood fuelSteam conditions (normal operation):
28 tons per hour × 5.98 MPaG × 465℃
Power output: 6,800 kW

Nihonkaisui Co., Ltd.
Project name: Ako Power Station No.2 Biomass
Power Generation Equipment Construction Project
Location:
Hyogo Prefecture
Capacity:
Fuel: PKS, Wood fuelSteam conditions (normal operation):
125 tons per hour × 6.0 MPaG × 460℃
Power output: 30,000 kW

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Features

02

Hikarigaoka Incineration Plant

The owner of the facility, Clean Authorityof Tokyo, is responsible for performingintermediate treatment of municipal waste inTokyo's 23 wards in a stable manner.
The newly completed Hikarigaoka
Incineration Plant is the result of demolishing
the former Hikarigaoka Incineration Plant,
which operated at the site until 2016, andbuilding a new plant in the same location.
Through this project, the outdated plant wasreborn as a state-of-the-art facility thatblends seamlessly into residents' lives while
contributing to stable waste treatment.

In 2021 in Tokyo's Nerima City, we completed
the next-generation, environmentally friendly

Hikarigaoka
Incineration Plant
Facility name: Hikarigaoka Incineration Plant
Incineration capacity: 300 tons per day (150 tons per day × 2 units)
Power generating equipment: Steam turbine generator (rated output: 9,150 kW)
Design and construction: Takuma-Konoike Special Construction Joint Venture
Construction period: June 28, 2016, to March 15, 2021

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A site surrounded by large apartment complexes
A construction process shaped by careful considerationof the impact on the neighboring area
Situated in the northern part of Tokyo's Nerima City,
Hikarigaoka Incineration Plant is surrounded by facilities
that are frequented by large numbers of residents,
including medium- and high-rise apartment complexes,
shopping centers, and Hikarigaoka Park, a municipal
park. In order to complete the rebuilding project in thislocation, it was necessary to give careful consideration to
the impact on the surrounding environment.
In demolishing the old plant, it was particularly
important to give adequate consideration to factors suchas noise and dust. To resolve these issues, we installed
an enormous, temporary tent that completely covered theold plant (measuring 121.5 meters by 78 meters in
footprint and 47 meters in height) that completely covered
the old plant. By incorporating soundproof sheets andsoundproof panels that provided dual functionality andkeeping the interior at negative pressure, the tent made it
possible for workers to do their jobs while minimizing theeﬀects of noise and dust on the neighboring area.

Former plant

construction and other workers at theconstruction site who worked diligently andclosely together, and also to the facility owneras well as the local residents for their kind
support and guidance. Going forward, myhope is that the facility will extend its roots
into the surrounding community while helping
residents enjoy a pleasant lifestyle.
Mr. Kenshin Nabeshima
Site Manager
KONOIKE CONSTRUCTION CO., LTD.

An exterior design that blends into
the surrounding environment
Because it is situated in the heart of a residential area,
the facility needed to incorporate a design that blends
into the surrounding environment by reducing theimposing appearance that such plants tend to produce.
By adopting an architectural structure that makes
extensive use of underground areas, we designed theplant so that buildings visible aboveground are shorter
than they were at the old plant.
Reﬂecting the need for the plant's color to give asense of cleanliness, we chose a cream color that
harmonizes with the surrounding residential areas for thebuilding and the same white color that was used at theold plant for the stack so that the facility would oﬀer thesame appearance as a landmark even as it blends into
the area.

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Induced draft fan

Tour route

Solar panels

After being completely
covered with the tent

Message from our partner company
In June 2016, we began demolishing theformer plant building inside a large tent that
set a Guinness world record. Construction of
the new plant began in earnest in March2018. As a result of addressing various
issues in a forward-looking manner with plant
construction personnel and aligning oureﬀorts so that we could pursue a uniﬁed
approach, we were able to complete theproject without incident. I would like toexpress my thanks to everyone who wasinvolved, including the more than 130,000

Steam turbine

Maximizing surplus power andhelping prevent global warming
The facility's steam turbine generator operates athigher eﬃciency than did the former plant's, allowing it
to make eﬀective use of the energy contained inwaste.
Additionally, we took steps to reduce power
consumption by the plant's equipment, for example byusing high-eﬃciency compressors and implementing
inverter control for the plant's major fans and pumps.
Furthermore, we installed a circulating gas system* forthe incinerators to reduce emissions, decrease fan
power consumption, and reduce environmental
impacts.
We also worked to lower energy use by building

equipment, for example by using high-eﬃciency
hardware and LED lighting and otherwise greenifying
the building.
As another initiative, we installed solar panels andskylights so that the facility can make eﬀective use ofnatural energy.
In this way, the new facility combines high-eﬃciency
power generation with energy-saving measures tomaximize the surplus power that can be obtained by
its waste-to-energy power generation process.

* Combustion technology for drawing in combustion gas above theburn-out grate, where the oxygen concentration is comparatively highinside the furnace, and blowing it as circulating gas into theincinerator. In this way, the technology fosters complete combustion
while limiting generation of nitrogen oxides with less combustion air.

Message from the construction coordinator

Completing a landmark in Hikarigaoka whileaccommodating changes in the social landscape
The Hikarigaoka Incineration Plant
Reconstruction Project, which had a total
construction period of 57 months and aconstruction site located in a dense urban area,
unfolded successfully against the backdrop of avariety of changes in the social landscape,including soaring material and labor costs due tothe economic boom fueled by the Olympics,
ongoing workstyle reforms, and the COVID-19
pandemic.

This success was entirely the result of theunderstanding exhibited by the owner and by
residents of the surrounding area, and I would liketo express my thanks to them. My hope is thatthe plant will inspire aﬀection as a new
Hikarigaoka landmark.
Hideaki Kotani
Site Manager, Hikarigaoka Construction Site
Takuma Co., Ltd.
(Current Position: General Manager, Safety Control Dept.)

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