About
About thethe Taisei
Taisei GroupGroup

Taisei Group’s Growth Strategy

Sustainability Section

Taisei Group’s Growth Strategy

Governance Section

Data Section

Message from the Chief Financial Officer

To Promote Financial Strategies in
Response to Medium- to Long-Term
External Environment andStructural Changes, and to
Maintain and Improve a Strong
Financial Foundation
Masahiko OKADA
Representative Director,
Senior Managing Executive Officer;
Chief of Business Administration Division;
In Charge of New Business Planningrobust equity ratio of 41.1% (a 3.3% decrease from theprior fiscal year).
Regarding operating cash flow, the decline in income
before income taxes and an uptick in advance payments forthe construction projects accompanied by business expansion, have led this year's figures fell short of last year’s.
Nevertheless, even amidst these challenges, the robust
financial foundation we have established over the years
continues to serve us well. In addition to implementing
investments outlined in the Medium-Term Business Plan,
we have acquired ¥50 billion of treasury stocks, the scaleof which is larger than ever before.
Moving forward, while ensuring ample liquidity for sustained business operations, our focus remains on investingin areas that enhance our corporate value and providing
continuous returns to our shareholders.
Our primary sources for funding investments andshareholder returns are operating cash flow and available
cash reserves. However, for significant undertakings suchas mergers and acquisitions, external financing fromfinancial and capital markets may also be considered as a
viable option.
Regarding the current Medium-Term Business Plan
(2021-2023), we, with our great regret, anticipate that it will
fall short of our numerical targets for the concluding year,
FY2023, owing to delays in organizing our production
systems and external environmental changes.
In FY2023, we will undertake a comprehensive analysis on our failure to accomplish current Medium-TermBusiness Plan. Based on this analysis, we will strategize
for the forthcoming Medium-Term Business Plan initiatedfrom FY2024 considering both capital costs and capitalprofitability in order to respond to the expectations of
our stakeholders.

Transitions of Net Sales / Operating Income and Operating Cash Flow
■ Consolidated net
sales (Billions of yen)

1,416.4

1,533.4 1,573.2 1,545.8 1,487.2

Consolidated operating
income (Billions of yen)
1,585.4

1,650.8

1,480.1

181.8
117.4
35.6

53.7

70.4

140.8

1,751.3

153.3

1,543.2■ Operating cash flow (Billions of yen)

1,642.7
218.1 207.0

167.7

138.7

130.5
96.0

54.7

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

95.3

73.0

77.4

67.4

80.5

30.1

24.0

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

-71.0

▍ Looking Back on FY2022
I assumed the role of Chief of Business Administration in
April 2023.
As Chief Financial Officer, I will consistently strive tosupport the initiatives of the Taisei Group in its contribution
to the development of a resilient society where people canlive affluent and cultural lives.
To all our stakeholders, we sincerely look forward to yourcontinued support and guidance.
Although the Japanese economy has generally maintained a moderate recovery trend thanks to the progress inthe normalization of socioeconomic activities, uncertainty is
growing induced by the reinforcement of monetary tightening in developed countries, associated with the worldwide inflation and concerns of slowdowns in overseas
economies triggered by financial instability originated fromthe United States.
In the domestic construction market, private construction investment has been restored and public investment is
expected to remain robust. The business environment
surrounding our Group, however, is extremely challenging,as the costs of construction materials across a wide rangeof products remained high, severely affecting construction
profits and losses in consequence.

23 T A I S E I ANNUA L R EPORT 2023

Under these circumstances, the Group’s net sales of
FY2022 (the fiscal year ended March 31, 2023), the second
year of our Medium-Term Business Plan (2021-2023),
surpassed the results from the previous fiscal year. Thisoutcome is primarily attributed to an increase in thebalance of ongoing construction projects at the beginningof the fiscal year and a boost in revenue in the domestic
building construction business, where projects progressed
as planned.
However, with regard to profit and loss, the operating
profit and other profits at each stage turned out to belower than the results from the previous year. This downturn is mainly due to the cost increase associated with theworks required for correcting our failure to satisfy steel
erection accuracy requirements for the (Tentative Name)
Sapporo Kita 1 Nishi 5 Project currently undertaken by our
Sapporo Branch, and the price escalation of construction
materials adversely affecting the profit margins in theconstruction business.
Although the ROE came out to be 5.6%, dropped by
2.8% from that of the previous year with decline in earnings, our financial position is in good standing. We haveupheld our status of being “substantively debt-free,” with a▍ Investment Plan and Progress in the Medium-Term Business Plan
The Group has positioned the Medium-Term Business
Plan (2021-2023) as the initial phase towards the realization of the TAISEI VISION 2030. Within this framework,
we have developed an investment plan, based on thepriority issues to be addressed intensively over the next
three years.
As per our original projections, the accumulated
investment in these three years is expected to reach¥250 billion, and as of the end of FY2022, we haveachieved approximately 50% of this numerical target.
Primary areas of investment include: investments indevelopment projects, predominantly focused on theacquisition of office buildings and other real estate bothin Japan and overseas; investments aimed to adapt to
new business sectors, which encompass the renewal
and transformation of the Group-owned facilities to Zero
Energy Building (ZEB) standards, the establishment of agroup next-generation technology research institutes,
and the development of construction technologies
related to offshore wind power generation; andinvestments that further enhance productivity, such as
the advancement of construction automation and laborsaving technologies and the increased utilization of
Building Information Modeling (BIM).
Pertaining to environment-related investments contained in each investment category, we aim to channel¥63 billion in the three years (an uptick of ¥3 billion frominitial plans). By the end of FY2022, we had allocatedaround ¥38 billion. Beyond technical development investment in environment field, we are also shifting resources
to procuring renewable energy sources to fulfill our power
consumption needs.
Along with overseeing the progress of our investments,
we consistently monitor the return status for each project
within business-related investments, as well as anticipate
outcomes from both technical development and investment in information. In case any issues arise, we
promptly implement necessary measures.

T A I S EI A N N UA L R EPO R T 2023 24

About the Taisei Group

Taisei Group’s Growth Strategy



FY2022 Results

FY2023Three-Year Implementation Plan
Implementation Plan

Medium-Term Biz
Plan Target

1. Investment in technical development

20.4

25.6

26.0

72.0

60.0

2. Investment in information

15.1

18.2

25.7

59.0

60.0

3. Capital and personnel-related investment

4.7

4.7

5.6

15.0

15.0

4. Business-related investments

23.2

16.8

70.0

110.0

125.0

(1.8)

(2.5)

(1.7)

(6.0)

(10.0)

61.6

62.8

125.6

250.0

250.0

Technical development contributing to industrial sectors expected to grow from the virtuous
circle of the economy and environment

12.3

22.3

19.4

54.0

42.0

Investments in renewable energy business

0.9

2.4

5.8

9.0

18.0

Total investments

13.2

24.7

25.2

63.0

60.0

Overlap of investment in technical development
and investment in information

Total investments
Of the above, environment-related investments:

Investment Results and Plans
FY2022 Investment in technicaldevelopment:
Investment in information:
Business-related investment:

FY2023 Investment in technical		development:
Investment in information:
Business-related investment:

Green Renewal ZEB (including T-Green Multi Solar) of Yokohama
Branch, Kansai Branch, TAISEI U-LEC Co., LTD.
Development of a data integration platform.
Acquisition of trust beneficiary rights in a large office building incentral Tokyo [(tentative name) Mita Building, etc.]

FY2021¥61.6 billion
FY2023¥125.6 billion

25%

50%

FY2022¥62.8 billion

Establishment of the Group new next-generation technology
research institute.
Development and implementation of a procurement management system.
Investment in large office buildings in central Tokyo and continuous
investment in overseas projects.

Progress
rate: 50%25%

▍ Shareholder Return Policy
Our guiding principle emphasizes long-term stable dividends. While enriching retained earnings to support
anticipated business expansion, we remain committed to
distributing profits to our shareholders in line with ouroperational results.
For the current fiscal year, considering both our recent
performance and anticipated business conditions, wehave set the annual dividend at ¥130 per share, maintaining consistency with the previous fiscal year’s payout(consolidated dividend payout ratio: 53.9%).
From May 15, 2023, through March 31, 2024, we haveexecuted a share buyback program, repurchasing up to 6

Dividend per Sharemillion shares, equivalent to ¥20 billion or 3.19% of thetotal issued shares.
Since FY2016, we have consistently undertaken theacquisition and cancellation of shares amounting toroughly ¥200 billion annually, while demonstrating ourcommitment to enhancing shareholder value and optimizing capital efficiency.
From now onward, we pledge to uphold our shareholders’ expectations by not only elevating our operational
performance but also by boosting our dividend yields andoverall share value.

*2*1Acquisition Amount of Treasury Share(Yen)(Billions of yen)

Dividend per share

Total return ratio (%)

50.0
130

130

130

130

130

106.7
36.0

53.9 53.7

100
37.0
22.3

25.4

Data Section(Billions of Yen)FY2021 Results

25.5

Governance Section▍ Policy on Cross-Shareholdings

Field

130

Sustainability Section

Message from the Chief Financial Officer

Investment Plan

125

Taisei Group’s Growth Strategy

20.0

29.4
22.7
Forecast

2016 2017 2018 2019 2020 2021 2022 2023

50.3

52.9

50.5

50.1

20.0
38.9

20.0
50.6

As a result, if any shares are determined not to beconsistent with the objectives to have cross-shareholding
because it is not economically reasonable and promising in
the medium to long run to maintain them, we have a policy
to sell them in a timely and appropriate manner.
In FY2022, we divested 11 listed securities amounting to¥3.6 billion and 9 unlisted securities in total of ¥100 million(including partial sales).
Looking ahead, with the aim to specify our divestment
targets, we intend to methodically reduce our cross-shareholdings: aiming for them to be less than 30% of ourconsolidated net assets by the end of FY2026 and under
20% by the end of FY2030.

▍ For Future Growth
The Group has consistently advanced financial strategies, primarily in the aim to improve and strengthen thefinancial foundation that suffered significantly from thecollapse of the bubble economy and the collapse of
Lehman Brothers.
As an outcome of these efforts, we have maintained asubstantively debt-free status since FY2013, and ourequity ratio has been around 40% since FY2018. We
believe that this marks a certain degree of attainment inmilestone, with indication of financial robustness.
The current enlargement tendency in project size is inducing
extreme cash flow fluctuation trend, which can typically beseen in the construction business, has been intensified.
In addition, the current business environment is facing
increasing uncertainties, marked by the manifestation of

global inflation effects, the situation in Ukraine, and a
deceleration in overseas economies due to the monetary
tightening in developed countries.
Nevertheless, amidst these challenges, we remaincommitted to our vision with a strong financial foundation
as the backdrop. In the aim to embody “The ever-evolving
CDE3 (Cubed) Company,” stipulated in TAISEI VISION 2030
as an ideal figure to be achieved through the Group’s
medium- to long-term aspiration, we will appropriately
allocate resources generated from our core construction
business to ensure sustainable, steady corporate management, increase our corporate value in the medium-to
long-term, and further enhance both our financial foundation and capital efficiency.

Equity Ratio (Full-Year)
(%)

44.9

28.2

Balance Sheets

22.1

31.2

32.3

34.9

39.0

44.4

39.7

95.4

Cash
and time
deposits:¥499.1

Interest-bearing
debt: ¥224.3
Otherliabilities:¥859.1

Other
assets:¥1,457.1

Cashand time
deposits:¥416.0
Other
assets:¥1,600.7

23.9

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Interest-bearing
debt: ¥201.7
Otherliabilities:¥981.1

ROE (Full-Year)

Equity:¥868.9(Retained
earnings:¥591.4Equity:¥829.1(Retained
earnings:¥562.8Non-controlling
Total assets interests: ¥3.9

Non-controlling
Total assets interests: ¥4.8

15.3

20.0
Forecast

2016 2017 2018 2019 2020 2021 2022 2023

41.1

(Billions of Yen)

(%)

20.5

28.0

25.0

We maintain cross-shareholdings to establish andstrengthen enduring and stable relationships of mutual
cooperation with important business partners and improve
our competitiveness and profitability.
For all listed securities and those unlisted which we
consider continuous assessment is required, the Board
meticulously evaluates whether or not to keep on holding
each individual stock through comparison of the acquisition cost against the business return, using the capital cost
as a yardstick.
In addition to quantitative evaluation, qualitative factors
such as anticipated future construction orders, are also
considered when making decisions.

8.9¥1,956.2 billion
As of March 31, 2022

¥2,016.7 billion
As of March 31, 2023

6.3

16.6
16.7

16.2

11.6
8.4

8.8

5.6

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

*1 The dividends per share for FY2016 and FY2017 have been adjusted to reflect the consolidation of shares conducted on October 1, 2017, where five shares of theCompany’s stock were consolidated into one share.
*2 The listed total return ratio corresponds to the profit of the previous fiscal year.

25 T A I S E I ANNUA L R EPORT 2023

T A I S EI A N N UA L R EPO R T 2023 26

Construction, Development, Engineering, Energy, Environment
About the Taisei Group

Taisei Group’s Growth Strategy

Medium- to Long-Term Recognition of External Environment

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

Medium- to Long-Term Recognition of External Environment

TAISEI VISION 2030

▎ Current External Environment Insights

Based on the “Three Xs,” we have formulated the TAISEI VISION 2030, our vision for the medium- to long-term based on
the Group’s philosophy and Taisei Spirit, and all officers and employees are working as one.

The Taisei Group has identified the challenges highlighted by the COVID-19 crisis as “Three Xs” (where ‘X’ stands
for transformation). We recognize that the intertwining of these challenges will lead to a significant wave of change.
For each of these transformations, we have set up specialized departments to undertake cross-departmental initiatives and investments.

The Ever-Evolving The CDE3

(cubed)Company

Increasing Pressure for Construction Industry Restructuring

IX
Industry
Transformation

SX
Sustainability
Transformation

DX
Digital Transformation

The industry lacks vitality due to a fierce competitive environment, because
the construction market is expected to shrink over the medium-to-long-term.
■ The issue of securing labor will become apparent in the construction industry,as Japan’s population ages and the birthrate falls over the medium-to-long-term.
■ There is business scope for expansion of both the Group’s growth sectors andthe sectors where we lag behind competitors, as the market share among thefive major construction companies including the Company is relatively small
compared with other industries.
■

Moving to solve Environmental and Social Issues throughOur BusinessNew growth industries and sectors will be established through a “virtuous cycle forthe economy and environment,” following the Japanese government’s declaration ofcarbon neutrality by 2050.
■ Revolutionary technical development through open innovation will be required toachieve this goal.
■ Transformations will be required for several types of employment tailored to theneeds of a new generation such as diversity.

12.6

Digital technologies are evolving in the production process, including BIM/CIM
and unmanned construction.
■ For the Company and in the construction industry as a whole, digital technology
and the utilization of data are still at a developing stage.
■ The application of these technologies to the whole construction business would
offer opportunities for drastically increasing the productivity of the production
process, speeding up management decision-making, and creating new services.

10.6 10.8
10.0 10.5

Group net sales

Group net income

ROE

numerical performance

About ¥2.5 trillion

About ¥150.0 billion

About 10%

Customers, suppliers, andsociety
Returns to stakeholders

Share of orders for the top five
construction companies (%)

9.3

9.2

9.2

9.8

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
*Sources: “Current Survey of Orders Received for Construction” by The Ministry of Land,
Infrastructure, Transport and Tourism, and “Survey of Order Performance” by theJapan Federation of Construction Contractors.

Proactive
response to
major waves oftransformations
as a pioneer

Shareholders

Dividend payout ratio 25-30%

Employees

To promote further diversity and inclusion, establishing a
comfortable working environment, personnel systems, andsalary plans that enable employees to leverage their diverse
range of skills to the maximum possible extent

IX

Increasing pressure
for constructionindustry restructuring

SX

Moving to solve
environmental andsocial issues
through ourbusinessDX

Returns through CDE3

Towards an era where
digital transformation
determines
competitiveness● To expand our business scope through M&A and other means● To target the front-runner status in the environmental sector, accelerating our

initiatives towards carbon neutrality● To promote further diversity and inclusion, establishing a comfortable working

environment, personnel systems, and salary plans that enable employees toleverage their diverse range of skills to the maximum possible extent● To establish our competitive superiority by enhancing productivity, speeding up

decision-making, and creating new services

Aging of Construction Industry Workers
Group net sales
All industries (29 years
old or younger)

All industries (55 years old or older)

Construction industry
workers (29 years oldor younger)

Construction industry
workers (55 years old
or older) (%)(%)

Group net sales

31.5
16.4

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

¥2.5 trillion

2 trillion

Group net income¥1,480.1 billion

Group net income

Group net income¥100.0 billion¥150.0 billion

¥

35.9

11.7

27 T A I S E I ANNUA L R EPORT 2023

Rough indicators of■

65.3 66.6 66.9
61.3 61.8 62.3
58.7
56.6

11.5

Achieving safety and security
Optimal utilization of “Human Capital,” “Technology” and “Intelligence”

Basic stance

Towards an Era Where Digital Transformation Determines
CompetitivenessConstruction investment(Trillion of yen)

47.4

a resilient society where people can live affluent and cultural lives■

Share of Orders Received by Major Construction
Companies in Construction Investment

48.2

A pioneering corporate group contributing to the development ofGroup net sales¥92.5 billion

2020

2023

2030

Previous Medium-TermBusiness Plan (2018-2020)

Medium-Term Business Plan
(2021-2023)

TAISEI VISION 2030

*Source: “Labour Force Survey” by The Ministry of Internal Affairs and Communications

T A I S EI A N N UA L R EPO R T 2023 28

About the Taisei Group

Taisei Group’s Growth Strategy

Taisei Group’s Growth Strategy

Sustainability Section

Numerical Targets and Progress of Medium-Term Business Plan (2021 -2023)▎ Numerical targets for FY2023

Medium-Term Business Plan (2021–2023) | Key Issues

ROE▎ Key Issues

About

10%

Group net sales: ¥2 trillion⃝	Key issues to be focused on over the next three years are identified in order to achieve TAISEI VISION 2030,

considering the current business environment.
⃝	In addition to the initiatives targeting our existing business, the initiatives expanding our business scope throughTo establish our superiority in a fierce competitive environment

About

P.35-

Group Overseas Construction
Business

Business-related

To develop the systems to establish solid business foundations

P.37-

To build the systems to ensure our profits for establishing the stable

P.39-

business foundations

D

Development

E

EngineeringGroup Real Estate
Development BusinessGroup Engineering BusinessTo build the stable income foundations in the Group development
business by optimizing the portfolio of our real estate and pursuinginvestment efficiency

P.41-

To leverage our strengths to expand the scope of our business

P.43-

Group net income: ¥100.0 billion

Group net sales: ¥1.64 trillion

Net interestbearing
debt*

53.9%

Group operating income: ¥54.7 billion

P.23 Taisei Group‘s Growth Strategy-¥214.3 billion

Group net income: ¥47.1 billion* Net interest-bearing debt = Interest-bearing debt - Cashand deposits (End of FY2022: -¥214.3 billion = ¥201.7
billion - ¥416.0 billion)

Message from the Chief Financial Officer

Group Domestic Civil
グループ国内土木事業
Engineering Business

Net interestMaintaining state ofbearing
substantively
debt
debt-free management

25%

Group operating income: ¥140.0 billion

Dividend
payout
ratio

5.6 %

ROE
Group Domestic Building
Construction Business

Dividend
payoutratio▎ FY2022 results

M&A will be implemented

C

Data Section

Medium-Term Business Plan (2021–2023)

Medium-Term Business Plan (2021–2023)

Construction

Governance Section

While it was anticipated that construction investments might decrease in the medium-to-long-term due to the spread of
COVID-19, the decline has not been as drastic. The industry is showing signs of recovery, surpassing pre-pandemic
levels, thanks to strong public investments and buoyant private capital expenditures, especially in the manufacturingsector, looking ahead to the post-COVID era.
Nevertheless, the considerable surge in construction material prices across a broad spectrum has had a profound
impact on the profitability of projects. This has rendered the operational environment for the Group exceptionallychallenging.
Amidst these circumstances, we are undertaking the Medium-Term Business Plan (2021-2023), set to conclude in
FY2023. However, due to delays in establishing a production structure aimed at business expansion, an inability totransfer the increased costs of construction materials, and the acceptance of several large-scale construction projects at
reduced profit margins amidst stiff competition, we anticipate our performance for FY2023 to fall short of the numericaltargets set for the final year of the Medium-Term Business Plan.
In FY2023, we will analyze the causes of the shortfall in the achievement of the Medium-Term Business Plan and formulate the next Medium-Term Business Plan starting in FY2024.

Numerical Targets for the Final Year (FY2023) of the Medium-Term Business Plan (2021-2023)(Consolidated)

To target the front-runner status in the environmental sector,
accelerating our initiatives towards carbon neutrality
Scope 1 and 2

Energy andEnvironment

Sustainability-relatedFoundation
Development

Scope 3

To achieve our target of “virtually zero” CO2 emissions from business activities(carbon neutrality)

To achieve zero fatal accidents and zero serious accidents

To promote the technical development to solve environmental and social issues
Technical development through open innovationDX

To innovate the production systems, and reform the workstyles through digitaltransformation (DX)Workstyle reform

To promote the measures that emphasize an attractive working environment
as well as diversity and inclusion

Corporate governanceTo maximize synergies by rebuilding the Group governance system

Numerical target

Performance forecast

Variance in amount

2,000 billion

1,760 billion-240 billion

Group operating income

140 billion

64 billion-76 billion

Group net income attributableto owners of parent

100 billion

45 billion-55 billion

ROE

About 10%

5.4 %

―

About 25%

53.7 %―

Substantively debt-free――Group net sales

To enhance the performance of our Zero Energy Buildings (ZEBs),and expand green procurement

To build the foundation based on sustainability
SafetyMedium-Term Business Plan (2021-2023) Final Year (FY2023) (Consolidated)

P.65-

Dividend payout ratio

P.45-

Net interest-bearing debt

P.49P.77-

We will implement the following measures for this fiscal year and for the upcoming Medium-Term Business Plan:
1 Securing appropriate business volume and rebuilding the production systems
2 Re-enforcing the “profit-oriented approach”
3 Continuation of company-wide negotiations for price pass-through29 T A I S E I ANNUA L R EPORT 2023

T A I S EI A N N UA L R EPO R T 2023 30

About the Taisei Group

Taisei Group’s Growth Strategy

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

Materiality (Issues to Be Dealt with)

Materiality (Issues to Be Dealt with)▎ Materiality and Direction of Initiatives▎ Taisei Group’s Materiality
In alignment with TAISEI VISION 2030 and our Medium-Term Business Plan for 2021–2023, which outline our
medium to long-term objectives, Taisei Group has identified its materiality. We take into consideration theimpact on our management while recognizing the importance of societal concerns, stakeholder interests, andchallenges facing society. These material issues have been selected based on their alignment with the Groupphilosophy and various policies.
As we prepare for the next Medium-Term Business Plan, set to commence in FY2024, we are currently
reviewing the Group’s materiality.

Materiality

E

Realization of a sustainable
and environmentallyfriendly society

Understanding fully the environmental implications of our businessactivities, as well as the influence the environment has on them, we aim toachieve the three visions outlined in the TAISEI Green Target 2050: the“Decarbonized Society,” the “Recycling-Oriented Society,” and the “Nature
Co-Existing Society.” Furthermore, we are committed to addressing two
specific issues: “Forest Resources/Forest Environment” and “Water
Resources/Water Environment.”②

Ensuring quality andimproving technology

We advance research and development of cutting-edge technologies that
anticipate societal needs. Through enhancing our quality management
systems, we are dedicated to consistently and efficiently delivering highquality construction products and associated services to both our clientsand society at large.

③

Technical development forrealizing a sustainable
society

We consistently develop technologies that address societal challenges froma sustainability standpoint, generate new businesses and markets throughinnovation, and bolster quality, productivity, and safety. Through these
efforts, we contribute to the realization of a sustainable society.

④

Promotion of supply chain
management

Viewing all our business partners as crucial, we promote efforts throughout the
supply chain to tackle environmental and societal issues. By doing so, we
aspire to foster mutual growth with our business partners, contribute positively
to society, and establish our reputation as a trustworthy corporate group.

⑤

Thorough management ofoccupational health andsafetyGuided by a “Safety First” principle, we leverage the managerial expertise andsafety-focused enthusiasm nurtured within the Group and among our business
partners. Our goal is to enhance and maintain a safe working environment,
striving to be a corporate group that earns societal trust and empathy.

⑥

Cultivation of technicalstaff and securing humanresources

We view human resources as our paramount management asset. Our goal
is to harness the potential and foster the growth of professionals acrossvarious fields by recruiting a diverse workforce and nurturing and positioning
them strategically. Additionally, by enhancing the working conditions andbenefits for our business partners, and amplifying our support, we aim tocultivate and retain skilled construction workers vital for the future of theconstruction industry.

⑦

Realization of an attractive
working environment thatis good to work in

In our pursuit of diversity management, we are committed to fostering awork environment where diverse talents can fully unleash their potential. By
respecting various work styles and enhancing productivity, we strive torealize true work-life harmony.

⑧

Thorough compliance andrestructuring of the Group
governance system

We uphold our social responsibilities by adhering to laws and regulations
and conducting ourselves with social integrity. In our pursuit of realizing the
TAISEI VISION 2030, we are establishing a unified group approach, aiming
to maximize synergies, elevate the corporate value of the entire Group, andachieve sustainable growth.

①▎ Process of Identifying Materiality
When pinpointing key issues, we considered a range of sustainability challenges, integrating diverse perspectives from both within and outside the Company. Discussions and deliberations took place at the managementlevel. Within the context of the Medium-Term Business Plan (2021–2023), we have established focused initiatives linked to the identified materialities and have been advancing our sustainability initiatives. The progress
of KPIs associated with each materiality is monitored and discussed by the Sustainability Committee,
enhancing the effectiveness of initiatives.

Direction of Initiatives

Extracting Sustainability Issues
Step 1

Key sustainability issues are identified from the SDGs, GRI, United Nations Global
Compact, ISO 26000, SASB, ESG external evaluation criteria, and the Group’s
medium- to long-term management strategies.

Step 2

Conducting Internal and External Interviews

S

Based on feedback from internal and external interviews, the Corporate Planning
Office and the Sustainability Division collaboratively draft a plan.

Internal Discussion
Using the draft as a foundation, alongside formulating a medium- to long-term

Step 3management strategy and a Medium-Term Business Plan, deliberations are held at
the Management Committee and the CSR Committee (now known as theSustainability Committee). Decisions are then finalized by the Board.

Rolling Out InternallyWithin the Medium-Term Business Plan, priority measures associated with materiality

Step 4are established, and KPIs and action plans are designed.
The Sustainability Management Promotion Division periodically summarizes the
progress of the KPIs and presents their findings to the Sustainability Committee.
Continuous improvement is pursued through the rotation of the PDCA cycle.

31 T A I S E I ANNUA L R EPORT 2023

G

T A I S EI A N N UA L R EPO R T 2023 32

About the Taisei Group

Taisei Group’s Growth Strategy

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

Materiality (Issues to Be Dealt with)▎ Materiality and Medium-Term Business Plan Initiatives▎ Materiality and KPIs

Risks and opportunities related to each materiality are described separately in the Sustainability Section | Materiality

For KPIs, the Board regularly monitors the progress and achievement of KPIs, following prior deliberations by the(P.65-81). We will prevent and reduce risks and create business opportunities through the following key measures in

Sustainability Committee, and takes measures as necessary. The progress and achievements of KPIs are also used

our Medium-Term Business Plan.

in dialogue with shareholders and investors.

E① Realization of a sustainable
and environmentally friendly
society (Environment)

Key measures under the Medium-Term Business Plan

⃝To achieve our target of “virtually zero” CO2 emissions from businessactivities (carbon neutrality) (Scope 1 + 2)

Environment⃝To enhance the performance of our Zero Energy Buildings (ZEBs), andexpand green procurement (Scope 3)

Environment⃝To establish a system to manage the Group’s environmental targets

Environment⃝To conduct environmental patrols and education to eliminate environmental accidents

Safety② Ensuring quality and improving
technology (Consumer issues)③Technical development forrealizing a sustainable society(Environment / Consumer issues /Community)④ Promotion of supply chain
management (Fair operating
practices / Human rights)⃝To develop and commercialize next-generation high-performance
ZEBs and develop and use the carbon-recycle concrete⃝Technical development contributing to industrial sectors expected togrow, through a virtuous cycle for the economy and environment⃝To establish a business in the operations and maintenance (O&M) area
⃝To shift to a style of data-based sales by making proposals at the
optimal timing

EnergyE①⃝To promote supply chain management aimed at solving environmental andsocial issues, etc.

⑤ Thorough management ofoccupational health and safety(Labor practices)⑥ Cultivation of technical staff
and securing human resources(Human rights / Labor practices /Consumer issues)⑦ Realization of an attractive
working environment that isgood to work in (Human rights /Labor practices)⃝To enhance patrols by the Company and officers of the Safety, Health,and Environment Cooperation Association, etc., ensuring thorougheducation in order to prevent designated disasters, etc.
⃝To promote the health and safety and environmental management
through the utilization of digital technologies, etc.
⃝To promote roadmap to FY2024 for “addressing long working hours”⃝To enhance the support for all member companies of SoyukaiG

restructuring of the Group
governance system (Organiza-tion governance / Fair operating
practices)⃝To clarify the functions of the Group Head Office⃝To establish effective systems to manage Group companies, etc.
⃝To build an integrated platform* For Soyukai and the Safety, Health, and Environment Cooperation Association, see the glossary on page 118.

33 T A I S E I ANNUA L R EPORT 2023

②

DX

Page

Results

TargetReduction rate of CO2 emissions per sales*1—-13.8%-15%

Reduction rate of total CO2 emissions*1—-20.9%-6%-38%-47.5%-41%-51%-60.5%-46%-42%-49.8%-43%

Customer satisfaction (Civil Engineering)*3

100%

95.8%

100%

Customer satisfaction (Building Construction)*3

100%

85.9%

100%

Productivity (Net sales/number of employees)¥77 million¥67 million¥83 million

Number of patent applications filed*3

280 cases

283 cases

280 cases

Number of orders received for net Zero Energy Buildings(ZEBs)*3

5 projects/year

10 projects/yea

8 projects/
year

100%

91.3%

100%

P.78

0 cases

0 cases

0 cases

P.79

100%

100%

100%

2,3

Reduction rate of CO2 emissions per sales*At
construction
stage:
2,3

Infrastructure

P.65

P.75

Technical Development

DX
DX

③

Sustainable city

SafetyS

DX
SafetySafetyWork Style Reform

SafetyWork Style Reform•To expand mid-career recruitment, studying and implementing the plans fortheir compensation and other benefits•To study and implement the plans to establish the workstyles where female
employees, elderly employees, and others can fully perform their abilities⃝To secure digital human resources, and establish a rotation system⑧ Thorough compliance andDX•To enhance and maintain the training for Soyukai members at the Konosu
Training Center•To support the registration and use of the Construction Career Up System(CCUS)⃝To establish the workstyles and the working environments that enable adiverse range of human resources to fully perform their abilities

FY2023

TargetAt building
Reduction rate of design-build estimated CO2
operation stage: emissions*2,3•To promote the procurement complying with the “Sustainable Procurement
Guidelines” across the supply chain as a whole•To coordinate with suppliers in a way complying with the “Declaration ofPartnership Building”⃝To improve the systems for providing procurement-related information

S

Indicators

Reduction rate of total CO2 emissions*Technical Development

Technical Development

FY2022

Scope 1+2

Climate change⃝Technical development where the Company has a competitive edge
⃝To establish Digital Twin based on coordination with the BIM/CIM
design and construction cloud⃝To establish the production process in a visualized and efficient way
through state-of-the-art digital technology

KPI

Materiality

Materiality (Related ISO 26000)

Relationship
withSDGs, etc.

④

Supplier’s conformity rates with the Taisei Group
Sustainable Procurement Standards⑤

Number of fatal accidents

P.77

Employment
Compliance with
the Revised
Labor Standards
Act (FY2024)

Worksite registration rate of Construction Career Up
System (CCUS)*3
Health management overtime hours*3

Achievement of
the targets of
the General
Employers
ActionPlan based on
the Act on
Promotion of
Women’sParticipation andAdvancementin the Workplace(FY2025)⑥

720 hours/year(No exceedance)

720 hours/year(18.2% employees
exceed)720 hours/year(No exceedance)

P.80

Worksite implementation rate of a five-day work week
(closed eight days in four weeks) (Civil Engineering)*3

100%

52.2%

100%

Worksite implementation rate of a five-day work week
(closed eight days in four weeks) (Building Construction)*3

100%

27.8%

100%

310 persons

314 persons

330 persons

100%

100%

100%

Number of major information security accidents

0 cases

0 cases

0 cases

Attendance rate at compliance training including
anti-corruption*3

100%

Number of female managers*3⑦
Rate of taking childcare leave by males*3

P.51-54,
P.81

DX

Governance
GovernanceDX

7 8
9 11 13

G

⑧

P.81,
100%

100%

P.93-98*1 Compared to FY2019 (a base year for emissions targets)*2 Compared to FY1990 (a base year for emissions targets)*3 Non-consolidated

T A I S EI A N N UA L R EPO R T 2023 34

About the Taisei Group

Taisei Group’s Growth Strategy

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

Business-RelatedGroup Domestic

Building Construction Business
Member of the Board
Managing Executive Officer
Chief of Architecture & Engineering
Division (Integrated);
Chief of Building Construction Division

Mayuki YAMAURA

TOPICS

Major Group Companies in Charge:
TAISEI U-LEC Co., LTD.
TAISEI SETSUBI CO., LTD.
TAISEI HOUSING CORPORATION

Complete image provided by:
The Ministry of Land, Infrastructure,
Transport and Tourism Osaka Civil
Aviation Bureau/Azusa Design Co., Ltd.

Reusable solar panel installed on
roof surface of temporary office

Decarbonization Provides Significant Business Opportunities
The increasing demand for Zero Energy Buildings (ZEBs) in line with society’s trend towards decarbonization provides excellent opportunities for our Group’s building construction business to grow further. Especially, we foresee a significant market in retrofitting existingbuildings into ZEBs in the coming years. In addition, there is a growing demand for real estate development projects and for theconstruction of buildings like data centers and semiconductor-related facilities, which are pivotal in the digitization of society. We
perceive these trends as significant business opportunities.
On the other side, we acknowledge the severe shortage of skilled construction workers as a considerable risk, due to the declining
birthrate and aging society, and the subsequent reduction in the working-age population as a considerable risk. Furthermore, as the legal
ceiling on overtime hours will be enforced in the construction industry starting in 2024, it is crucial to improve productivity and decrease theworkload at worksites. This can be achieved through the introduction and use of mechanized construction technologies such as welding
robots, precast concrete methods, and digital solutions and technologies. It is imperative to systematically achieve and maintain optimum
productivity for both our employees and on-site workers.

Completed Construction of New Buildings and Other
Facilities Related to the New Building Construction
Work for Nishi-Shinjuku 5-Chome Kita ProjectStart of Efforts to Achieve Net-Zero CO2 Emissions
in Construction of the New Fukuoka Airport Office
Building and New Control Tower

This redevelopment project began in 2006, with the establishment of the NishiShinjuku 5-Chome Kita Area Town Development Study Group by the local
volunteers. The old city blocks with high fire risk were redeveloped to be incombustible, and secured vacant land by building skyscrapers. We have created awater park that takes advantage of the scenery of the Kanda River, as well as awell-watered and green excursion space. The Company has demonstrated its
comprehensive capabilities, such as with the ingenuity of our worksites, backup
work of the building construction division, and support work of the civilengineering division in seawall construction. We have overcome the shortage of
personnel, materials, and equipment, caused by the COVID-19 pandemic, andthe long dream has come true for the local community.

Acquired “Nearly ZEB” certification for the temporary office. We also aim torealize a recycling-oriented society by utilizing reusable solar panels. We will use
tracking non-fossil certificates derived from our own power plants to convert
electricity into real renewable energy, and use credits including the Fukuoka City
Forest Offset Credit for fuel to reduce CO2 emissions from construction to
virtually zero. We also use environmentally friendly concrete developed by ourcompany for the foundation of the building to reduce CO2 emissions at thematerial procurement stage.

Start of Construction of a Next-Generation TechnicalLaboratory towards the Realization of Zero-Carbon
Buildings

Green Renewal® of the Group-Owned Facilities ZEB
Construction Completed to Realize a DecarbonizedSociety

The Company and Taisei Rotech Corporation have begun construction of theGroup’s Next-Generation Technology Laboratory in Satte City, Saitama Prefecture,for various technological developments and demonstration tests that will contributeto the realization of carbon neutrality. We will complete the construction of eachfacility by the end of October 2024, and start operating them one after another,with the aim of becoming the first zero-carbon building in Japan as a new research
and management facility.

The green renewal® ZEB construction has been completed for the Company’s
Kansai Branch Building, Yokohama Branch Building (above), and TAISEI U-LEC
Co., LTD. Kawagoe Plant.

To Enhance Our Competitive Advantage by Technological and Comprehensive Capabilities
One of the featuring competitiveness in the Company’s building construction business is our state-of-the-art ZEB related technologies. In
addition to introducing ZEB technologies onto new buildings, as we renovated three existing buildings owned by the Group and converted
them into ZEBs last year, we have established a system to provide the additional value through converting existing buildings into ZEBs,
while offering our clients an opportunity to observe the actual ZEBs. We will pursue our competitive advantage in the urban redevelopment
projects and large-scale logistics facilities with our comprehensive capabilities, where we offer business proposals based on our in-house
expertise and know-how in collaboration with various internal specialized sections that exceed the clients’ expectations and imaginations.
To Ensure Clients’ Trust through Utilizing Human CapitalFirst and foremost, we must make our best effort to restore the clients’ trust that has once been lost due to the recent incidents of the
failure to satisfy steel erection accuracy requirements and the delay in our construction project. Without the trust of our clients, theGroup’s businesses would not last. The most essential management resource for restoring clients’ trust is our “human capital”. It is our
employees in charge of the construction works at site, who conduct the careful work, provide value that exceeds the clients’ expectations, and eventually gain the clients’ trust. We will proceed for restructuring our production system trustworthy for our clients, by
maintaining a working environment in which our employees can best perform with no constraint, including appropriate personnel
allocation in consideration of work load and strengthening systematic functions to ensure implementation of our quality control process.
It is also an urgent issue to secure proper profits. As a result of the prolonged COVID-19 pandemic and the increase in energy andconstruction material prices due to the emergence of geopolitical risks, which we could not foresee when the current Medium-Term Business
Plan was formulated, we continue to face severe business circumstances where the clients’ budget frequently fall short compared to ourconstruction costs. As our key measures of “expansion of building renovation business through organizational restructuring” and “improvement of productivity through the use of digital technology and the consolidation of operations” have come near the accomplishment, we willfurther accelerate the implementation of the said measures and enhance the business foundation to secure appropriate profits.

Please refer to this section for details of the initiatives such as the Renewal ZEB.

Group’s ZEB
P.69-70 Taisei
Sustainability Section

Segment Overview

Medium-Term Business Plan (2021–2023) Key Initiatives

Progress and Achievements for FY2022

Future Measures

Net sales reached ¥991.8 billion, an increase of 10.3% from theprevious period, due to the growth of both the Company and its
consolidated subsidiaries.

⃝To establish a framework to enhance the competitiveness of
new construction orders.

⃝Strengthened the support systems of the Digital Product Centerand Construction Sitework Promotion Center established at theDivision, enhancing the division of labor and efficiency inworksite operations.

⃝Enhance collaboration with the design department to better
address customer demands and further enrich proposal contents.

Group Net Sales(Billions of Yen)

(FY)

2018

899.4

2019

2020

2021

991.8

2022

1,049.4

2023(Target)⃝To expand the renewal sector through organizational restructuring.
⃝To boost productivity by leveraging digital technologies andconsolidating operations.
⃝To broaden business domains by utilizing M&As.

⃝Centralized the estimation tasks for renewal construction to the
Building Renovation Dept. in branch offices. (consolidation rateincreased from 36.7% at the start of FY2022 to 65.3% at the endof the fiscal year).
⃝Implemented operational improvements by fundamentally
reviewing the workflow and content, including redesigning
standard drawings and introducing a facial recognition system atworksite entrances.
⃝Advanced the development of the BIM standard model.

35 T A I S E I ANNUA L R EPORT 2023

⃝Advanced the transformation into back-offices for the
Mechanical & Electrical Division and branch Mechanical &Electrical Department.

⃝Added showroom function to the Kansai Branch, Yokohama
Branch, and the Kawagoe Plant of TAISEI U-LEC Co., LTD.,aiming for active utilization and increasing orders for Green
Renewal® ZEB construction projects.
⃝In view of the upcoming 2024 overtime regulations, the Company
seeks to balance workload and staffing while concurrently
improving productivity.
⃝Initiated the pilot phase for the “DX Start Model,” a BIM modelthat integrates “Design, Structure, and Equipment,” aiming toaugment front-loading*.
* Front-loading: The process that can be brought forward in the process is carriedout at the initial stage.

T A I S EI A N N UA L R EPO R T 2023 36

About the Taisei Group

Taisei Group’s Growth Strategy

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

Business-RelatedGroup Domestic

Civil Engineering Business

TOPICS

Major Group Companies in Charge:
Managing Executive Officer
Chief of Civil Engineering Division

Kenji SHIRAKAWA

Taisei Rotech Corporation
SEIWA RENEWAL WORKS CO., LTD.
J-FAST Co., Ltd.

Growth Opportunities through Building National Resilience and Carbon Neutrality
It is an urgent issue in Japan to deal with severely escalating natural disasters due to climate change, large-scale earthquakes, andthe aging infrastructure facilities. Building national resilience initiatives and the trend towards carbon neutrality are anticipated to
expand demand for civil engineering projects including highway renovation projects and renewable energy-related facilities and to
generate momentum for medium- to long-term business growth.
On the other hand, as for the labor shortage issue due to the declining birthrate and aging society, business environment
including that of suppliers and subcontractors continues to worsen. As the legal ceiling on overtime hours will be enforced in theconstruction industry to adhere to overtime regulations starting in 2024, it is a crucial challenge for us to achieve both preventing
excessive overtime hours and maintaining operational capacity simultaneously. Furthermore, it is imperative to proactively adapt tothe enhanced environmental regulations for the purpose of the decarbonization in future.

Overall view of newly constructed sediment control dam

Taketoyo Thermal Power Station

Two Years Post the Atami Debris Flow—Completionof Emergency Measures for the Aizome River System

Completion of the Taketoyo Thermal Power Station
Upgrade: Contributing to a Stable and EfficientElectricity Supply in the Region

Following the heavy rainfall in July 2021, debris flows were triggered in the affectedareas of Atami-shi, Shizuoka Prefecture. The emergency sediment control
construction, aimed at preventing secondary disasters and enabling swift restoration, has now been successfully completed.
To forestall further disasters, facilitate search operations downstream, andensure the safety of local inhabitants, we embraced the use of ICT and DX technologies, employed helicopters for sediment removal, integrated unmanned
construction methods, and erected temporary dam barriers. Through proactiveplanning and expedited construction efforts targeting the rapid rehabilitation andrejuvenation of the afflicted areas, we managed to successfully finalize the new
sediment control dam constructions.

The Taketoyo Thermal Power Station, located in Chita County, Aichi Prefecture, hascompleted its upgrade to transform into an environmentally conscious coal-fired
power station by co-firing with wood biomass.
In the wake of the increased electricity demand and surging electricity costs
following the Great East Japan Earthquake, there was a pressing need for thestation to promptly resume its operations to ensure a reliable and efficient power
supply to the region. Through this project, by proactively adopting precast
construction methods for both offshore and onshore components, we were able toachieve various benefits, including a notably shortened construction timeline.

To Utilize Our Technologies for Environmental Sustainability and Enhancing Resilience
Our strengths are rooted in our vast project accomplishments, brand reputation, technical innovation & development, and our capability to design and execute projects tailored to our clients’ various needs. Particularly in the realm of technology, we distinguishourselves from competitors by developing and adopting our state-of-the-art technologies onto respective construction methods.
These include automated and mechanized construction for tunnels, optimized and automated shield tunneling technologies, andICT-driven construction methods for bridge projects. Moreover, we are proactively introducing newly developed technologies forenvironmental sustainability and enhancing infrastructure resilience. These encompass T-eConcrete®, our solution to reduce a
remarkable volume of CO2 emissions; CCS, a technology to capture and store discharged CO2; and Floor Slab Replacement
Machines (Semi-sectional works) and Head-bar Joints to improve work efficiency of floor slab replacement works for expressways.
To Strengthen Our Systems to Receive Orders for the Future
In our current Medium-Term Business Plan, we concentrate our resources on “developing the systems to enhance the Group’s
competitiveness in receiving orders,” and thereby intend to identify more ECI projects (ECI: Early Contractor Involvement; A method
where the contractor participates from the design stage), etc. where we can utilize our strengths as a Group, and in addition,
develop the organization to win bids thereof increasing employees in respective sections. In the realm of wind power generation
projects, we have proactively initiated research and development, particularly with the foresight of the potential expansion of floating
offshore wind power generation facilities in future. As we move forward, it is imperative to further enhance our competitiveness inreceiving orders, improve our productivity, and further develop an efficient organization for better work implementation.
To Thoroughly Maintain Top-Priority on Worksites as Principle and Aim for Sustainable Growth
In TAISEI VISION 2030, our domestic civil engineering business stands as a cornerstone functioning for generating profits and maintaining sustainable growth, and civil engineering worksites are the source for them. We consistently uphold the principle ofmaintaining top-priority on works at project sites, ensure quality and safety well controlled with our pride and responsibility, andmaximize the profits by overcoming various constraints with our efforts to pursue operational efficiency and enhance productivity.
As we build a robust business foundation, we will also actively engage ourselves in new business areas in order to achieve asustainable and resilient society.

Nagoya Central Rainwater Regulation Reservoir

Completion of the Nagoya Central Rainwater
Regulation Reservoir: Aiding in Flood Prevention
around Nagoya Station
Beneath the primary arterial road running north-south to the east of Nagoya
Station, a rainwater retention pipe has been constructed. This pipe boasts aninternal diameter of 5.75 meters, delves approximately 50 meters deep, andstretches around 5,000 meters in length. Given the past flood damages resulting
from heavy rainfalls, Nagoya City has been proactive in implementing measuresagainst rainwater. The aim is to substantially mitigate the effects of inundation when
faced with rainfall intensities nearing 100 millimeters per hour. The Nagoya Central
Rainwater Regulation Reservoir was built overcoming challenging conditions suchas its significant depth, high water pressure, and extended length. Utilizing
innovative technologies, the project was not only expedited but also completed
without any accidents or incidents.

Example of construction of pavements made from wood (lignin)

Initiatives of Taisei Rotech Corporation
Taisei Rotech Corporation is actively pursuing the creation of pavements made fromwood as part of its efforts towards a decarbonized society. Lignin, which comprises
30% of wood’s composition, has a significant history of being utilized as a fuel forbiomass power generation. By incorporating it into pavement production, it ispossible to decrease the consumption of petroleum-based asphalt. This results ina reduction of CO2 emissions by 20% to 30% during the manufacture of thecomposite materials.

Segment Overview

Medium-Term Business Plan (2021–2023) Key Initiatives

Progress and Achievements for FY2022

Future Measures

Net sales increased 1.6% year on year to ¥408.5 billion, despite
the impact of rising raw material prices at Group company Taisei
Rotech Corporation.

⃝To develop the systems to enhance the Group’s competitivenessin receiving orders⃝Strengthened our order acquisition capabilities• Handled more projects due to an enhanced bidding organizational
structure• Secured substantial orders for NEXCO’s highway-related projects⃝Improved production capabilities• Evolution and broader application of T-iDigital Field (aconstruction management support system utilizing digital data)enhanced productivity• Undertook trials and validation for unmanned and labor-saving
technologies on-site• Continued efforts to consolidate and streamline worksite
operations⃝Expanded bid-related organizations in promising growth sectors• Increased staffing for teams focused on dams, wind energy
projects, and related areas• Using the Group’s distinct technologies, secured numerous orders
for floor slab replacements and seismic reinforcement projects⃝Expand the scope of Group company ventures• Continue collaborative technological development with Group
entities to establish unique and differentiated technologies•E nhance the bid organization structure to target and secure
more government contracts⃝Promote initiatives in anticipated growth areas• Engage proactively with the government’s new “Hybrid Dam(tentative name)” project, an initiative spurred by recent
frequent and severe flood events• Accelerate efforts to secure fixed-bed wind power generation
projects, and speed up technical development for floating
offshore wind energy project design and construction⃝Broaden business domains
in PPP/PFI ventures and concessions, leveraging the• EngageGroup’s collective strengths• Expand orders in renewable energy to support infrastructure
initiatives aimed at a decarbonized society. Also, fast-track
ventures into the Carbon Capture and Storage (CCS) sector

Group Net Sales(Billions of Yen)
(FY)

2018

402.0 408.5

459.6• Identify more ECI* projects, etc. where we can utilize our strengths
as a group, and develop the organization to win bids thereof• Develop company-wide backup systems to win discretionary
contracts and design changes* ECI: Early Contractor Involvement; A method where the contractor participatesfrom the design stage⃝To enhance the teams to win bids in the sectors where growth isexpected, etc.
2019

2020

2021

2022

2023

(Target)•E nhance the teams and personnel to win bids for the projects
related to dams, wind power generation facilities, andexpressway renewal⃝To expand our business areas through M&A• Strengthen expertise in core areas and address weaker sectors• Leverage the Group’s capabilities in PPP projects

37 T A I S E I ANNUA L R EPORT 2023

T A I S EI A N N UA L R EPO R T 2023 38

About the Taisei Group

Taisei Group’s Growth Strategy

Taisei Group’s Growth Strategy

Sustainability Section

Overseas Construction Business

TOPICS
Completion of the Qatar Hamad International Airport Expansion Project to Make a Bridge to the World as a Hub Airport in the Middle EastManaging Executive Officer
Chief of International Operations Headquarters

Tatsuya SUGAWARA
To Seize Opportunities from Development and Infrastructure Needs in Emerging Countries While Mitigating Risks
For the Taisei Group, the economic upswing in emerging Asian countries represents significant opportunities for our businessexpansion, which is further propelled by increased demands for infrastructure. The increase in capital investments among the countries enjoying the growth of the middle-class income population or proactively seeking foreign direct investments is also contributing
to our potential business growth.
However, it is crucial in the international market to generate profits while managing business risks. It is imperative to properly
analyze, assess, and respond to a variety of risk elements and situations, including the financial catastrophe in Official Development
Assistance (ODA) recipient countries with economic instability; the geopolitical risks as exemplified by the crisis situation in Ukraine;and the financial risks associated with abnormal volatility in currency exchange rates.
To Earn Recognition for Our Superiority in Technical Capabilities, Quality and Safety Control
In many cases, our competitors in the overseas markets are local contractors. Whereas we have traditionally faced fierce pricecompetition in the international construction market, the importance of not only the price but also technical proposal is increasing
especially in the countries and regions experiencing economic growth. We have well-recognized as our business competitiveness ourstrengths in advanced technological capability, quality control, process and safety management, all of which we acquired through both
domestic and international projects, while we have accomplished various projects including airports and shield tunneling projects. We
see challenges for our business in future so as to increase our construction capacity and to train our engineers and further improvetheir capabilities. In addition to assigning our employees from the head office abroad, it is essential to find and employ well talented
personnel locally, and to increase their retention rate through training. We are committed to fostering a working environment where all
employees can appreciate the value and attractiveness of being part of the Group, thereby nurturing a strong sense of belonging.
To Establish a System for Ensuring a Balanced Mix of Different Project Sizes by Promoting Localization and Operations
at Overseas Offices
Previously, our international operations were influenced by the fluctuation of work volume in domestic construction market so that
we continuously managed to run unstable operations. Therefore, under the current Medium-Term Business Plan, we are focusing on
establishing stable business foundations, while promoting localization and operations at overseas offices and cooperation with alliancepartners by utilizing their resources and supply chains.
While two years have passed since the Medium-Term Business Plan was initiated, we are not yet satisfied with our businessoutcome during those years because our business has been affected by the impact of the COVID-19 pandemic and the emergenceof geopolitical risks in Myanmar and Ukraine. We will continue to improve our price competitiveness and construction capacity tosecure orders, through the development of human capital and enhanced collaboration with our alliance partners.

Construction Overview
Location

Qatar

Owner

Qatar Company for Airports Operation and Management(MATAR)

Constructor

Midmac, TAV, Taisei JVConstruction From November 2019 to December 2022
periodConstruction Extension of the central concourse: Total floor area 122,135 m2
Pavement of apron, renovation of existing concourse, utility
overview
equipment, etc.

Adjacent to the Hamad International
Airport Passenger Terminal Building,which was completed in 2013, thisconstruction will extend the central
concourse to accommodate passengers increasing year by year. The offer
for use began in October 2022 inconjunction with the FIFA World Cup
Qatar held in the same year.
This facility has a huge greenhousegarden called Orchard, which is a lush
green facility. Hamad International
Airport, which officially opened in 2014,is expected to contribute significantly
to Qatar’s economic development byconsolidating its position as a hub
airport in the Middle East through the
expansion of its central concourse toaccommodate 58 million passengers
per year, compared with existing 38
million passengers.

In September last year, in collaboration with China State Construction
Engineering Corporation Limited, we received an order for construction
related to Riviera Station on Contract P103 Punggol Extension of the
Cross Island MRT Line, a metropolitan railway (station building and tunnel
construction, about 4.3 km long).
In the tunnel construction, a large-section earth pressure balanced(EPB) shield excavator with a diameter of about 12 m is used to construct a tunnel with a total length of 4.3 km, in which two tracks are laid.
Since the Riviera Station at which the construction will be carried out
will be installed along Punggol East and Punggol Central districts, it isexpected to improve traffic access for suburb residents. The Cross IslandLine Punggol Extension is a 7.3 km section with four stations: Punggol,
Riviera, Elias, and Pasir Ris. After its completion, the railway will be moreconvenient to use for more than 40,000 families living nearby.

CSR activities at IID (PT. INDOTAISEI INDAH DEVELOPMENT)
IID, an equity method affiliate inIndonesia, installed a water
purification tank in the Kamojang
district jointly with partnercompanies and tenant companies (August 2022).

Segment Overview

Medium-Term Business Plan (2021–2023) Key Initiatives

Net sales increased by 5.7% year on year to ¥82 billion, primarily
due to the steady completion of ongoing construction projects.

Common⃝To shift from the systems focusing on large-scale projects tothe systems striving to ensure an optimal mix of different
project sizes, by promoting both localization and operations atoverseas offices, and collaborating with alliance partners

Non-contracting⃝To commit human capital towards the establishment of businessmodels beyond traditional construction, drawing inspiration fromthe operational frameworks of global contractors in Europe andthe United States.

Building⃝To build local networks by placing more and younger local sales staff

Progress and Achievements for FY2022

Civil engineering⃝To cut the costs by utilizing the resources of alliance partners
and our supply chain New business⃝Secured construction contracts for the CONTRACT P103
DESIGN AND CONSTRUCTION OF RIVIERA INTERCHANGESTATION AND TUNNELS FOR CAR-PUNGGOL EXTENSION in
Singapore, in collaboration with global partners.

(FY)

2018

2019

2020

2021

82.0

2022

76.0
2023

(Target)⃝To focus on allocating human resources to the airport sector,
where the Group is internationally competitive

Qatar Hamad International Airport

Singapore Subway Cross Island Line—Punggol
Branch Line: Order Received for Construction
Related to Riviera Station on Contract P103

In the Cianjur district, we
collaborated with IID’s tenantcompanies for support activities,
including provision of schoolbags, stationery, drinking water,milk, and bedding mats toearthquake victims (December2022).

To Share the Attractiveness and Joy of Achievement in Our Business, and Further Create Significant Value
Although overseas construction business can be challenging, it is a compelling endeavor that contributes to national development byimproving social and living infrastructures. Moreover, it holds the potential to become a core component of Taisei Group’s future business,creating significant value. We aim to share our vision and values with younger employees as we strive for new heights in the next era.

77.6

Data Section

Business-RelatedGroup

Group Net Sales(Billions of Yen)

Governance Section

Future Measures
Beyond the primary strategies outlined in our Medium-TermBusiness Plan, we are prioritizing the following initiatives:⃝Recruitment and training of talent to bolster construction
capabilities.
⃝Strengthening partnerships to enhance both our construction
capacity and price competitiveness.
⃝Seeking greater business opportunities by expanding into new
sectors and targeting a broader clientele.

⃝Deployed staff to pioneering companies within the non-contractual
sector.

39 T A I S E I ANNUA L R EPORT 2023

T A I S EI A N N UA L R EPO R T 2023 40

About the Taisei Group

Taisei Group’s Growth Strategy

Taisei Group’s Growth Strategy

Sustainability Section

Governance Section

Data Section

Business-RelatedGroup

Real Estate Development Business

Executive Officer
Chief of Urban Development Division

Major Group Companies in Charge:

Takashi YAMAZAKI

Taisei-Yuraku Real Estate Co., Ltd.

TOPICSCENTARA GRAND HOTEL OSAKAHOTEL KEIHAN NAMBA GRANDE
Hakata East Terrace

To Catch up with the Rapidly Changing Market Environment
In recent years, we have seen a surge in large-scale real estate investment opportunities in the Tokyo metropolitan area, driven by
growing demands for urban redevelopment and new development projects. This is a response to aging facilities and buildings, aswell as functional mismatches resulting from a change in environments surrounding urban areas. Meanwhile, our business environment is becoming increasingly challenging in terms of profitability because fierce competition for rare and valuable projects is
intensifying, particularly in the core regions of the Tokyo metropolitan area where there is strong demand from foreign investors,
while the level of market rent for residences and offices has not risen as much as that of project costs such as construction costs.
To Demonstrate Our Strengths by Utilizing the Business Platform as the General Contractor for Real Estate Development
Our business as the real estate developer can enjoy an advantage of utilizing our business platform as a general contractor including a
multitude of advanced technologies possessed by Taisei Group in areas such as design, building, engineering, and decarbonization.
Our business advantage can be further enhanced because Taisei Group can provide a total coordination throughout the life cycle of the
project from design and building services to maintenance and operation services after delivery of the building. Furthermore, by participating in real estate development projects as a joint developer, we are acquiring a series of premium development projects with ouradvantageous capability to push forward the projects while being involved throughout the project cycle from the proposal to the implementation in addition to an involvement with our business platform of the general contractor in initial stages. In domestic andinternational investments and development projects, we offer a range of services from technical assistance to design and building
services thereby making optimal use of our business platform in order to meet our business partners’ expectations.
To Optimize Our Real Estate Portfolio by Increasing Investment Balance
Based on the key measures of our Medium-Term Business Plan, we aim to optimize our real estate portfolio and secure stabledevelopment profits while acquiring premium real estate and increasing our investment balance through earlier-stage businessinvolvement in urban redevelopment and major development projects. We plan to optimize our portfolio as swiftly as possible bybalancing our flow business, which involves the sale of properties, with our stock business that generates ongoing revenue, such as
rental offices and logistics facilities, and by considering the area, usage, and business structure.
In addition, in order to diversify our sources of revenue, we plan to intensify our efforts in areas like PPP projects and operationoriented businesses, which we expect to expand in the future as new business fields. By establishing such expertise promptly, we aim
to offer more differentiated asset utilization proposals to our clients in the building construction and the civil engineering businesses. We
will also strengthen cooperation among our Group companies and share project information to expand investment opportunities.
To Become a Group in Charge of “D” in CDE3 (Cubed) for Realizing Our Dreams
We are the division in charge of “D = Development” in “The Ever-Evolving CDE3 (cubed) Company” as stated in “TAISEI VISION 2030.” We
will take the lead in realizing a mechanism to develop urban infrastructure, facilities and buildings that support a prosperous future throughour civil engineering and building construction businesses, and continue to create value that leads to sustainable growth of society.

Grand Opening of CENTARA GRAND HOTEL OSAKA
and HOTEL KEIHAN NAMBA GRANDE in Conjunction with the Development of Namba Parks SouthIn the Osaka Namba area, the Company promoted the development of
new city block Namba Parks South, which partially opened in March2023 and had its grand opening in July. The Company also invested in
the development of the following two properties.
●CENTARA GRAND HOTEL OSAKA
Main use: Hotel Location: Osaka City, Osaka
This property is a hotel operated by Centara Hotels & Resorts based in
Bangkok, Thailand, which is making its debut in Japan. Based on theconcept “the fusion of Thai and Japanese beauty and culture,” the hotel
offers 515 guest rooms, an authentic Thai spa, and a rooftop restauranton the top floor with a spectacular view of Osaka. The Company
invested in the development of this property through investment in a
special-purpose company established jointly with other companies.
●HOTEL KEIHAN NAMBA GRANDE
Main use: Hotel Location: Osaka City, Osaka
This property is a hotel operated by Hotel Keihan Co., Ltd. Based on
the design concept “a garden standing on a green hill,” it has 227 guest
rooms as well as restaurants. The Company invested in the developmentof this property jointly with other companies.

(Tentative Name) Mita Building

Completion of Hakata East Terrace
Main use: Office Location: Fukuoka City, Fukuoka PrefectureThis property is located in the Hakata Station Chikushi-guchi area,
which is close to Hakata Station, the gateway for ground transportation
to Kyushu, and highly convenient for transportation. This has been a
new base for business and crowds with a plaza space abundant withnature that serves as a place for crowds and daily relaxation, as well as
one of the largest office floors in the Hakata area and work spaces
equipped with support functions for diversified workstyles. The
Company promoted and invested in the development of this property
jointly with other companies.

Acquisition of Office Building, (Tentative Name) Mita Building
Main use: Office Location: Minato-ku, Tokyo
This property is located a three-minute walk from Sengakuji Station on
the Toei Asakusa Line, highly convenient for transportation, along
Daiichi Keihin with excellent visibility. It has a large common-use space
and a multi-story parking lot in the building, making it a highly competitive
office building in the area. The Company invested in the development of
this property through investment in a special-purpose company
established jointly with other companies.
In the future, we will further improve the value of this property byrenovating it to further enhance its leasing capacity.

Initiatives of Taisei-Yuraku Real Estate Co., Ltd.
●Terrace Kamishakujii West

Terrace Kamishakujii West

Main use: Apartment house Location: Nerima-ku, Tokyo
This property is a new rental condominium development project for which Taisei-Yuraku
Real Estate Co., Ltd. acquired ZEH-M Oriented for the first time, and is a group collaboration project with TAISEI U-LEC Co., LTD. (design and construction). It is located nine
minutes on foot from Kamishakujii Station on the Seibu Shinjuku Line, which has goodaccess to central Tokyo. The area is convenient for living with supermarkets and restaurants around the station. Although it is located within the 23 wards of Tokyo, it has a quiet
living environment rich in nature. All 49 rooms are occupied, as their spacious floor planand energy-saving performance have been recognized. (As of April 2023)

Segment Overview

Medium-Term Business Plan (2021–2023) Key Initiatives

Progress and Achievements for FY2022

Future Measures

Net sales decreased 13.2% year on year to ¥115.3 billion as areaction to the sale of large properties in the Company in theprevious fiscal year.

⃝Real estate: To build the optimal portfolio based on real estatemarket conditions, and develop the systems to ensure stableprofits from development• Acquire premium real estate through project control from the
upstream stages of urban redevelopment projects and major
development projects• Optimize our real estate portfolio based on a balance of area,
application, asset efficiency, and stable revenues• Enhance the brand recognition and brand strength of “OBER”
condominiums and “TERRACE” rental condominiums⃝Facility management: To secure the properties for facility
management with planning and proposals tailored to customers’
needs•Establish an integrated customer support system that covers
everything from building construction to facility management⃝PPP, etc.: To participate in the PPP business, etc. in order todiversify sources of revenue• Establish the operational systems for airport concession
projects, and tackle new infrastructure operation business⃝Target Investment of ¥59 billion in prime properties in good
locations such as CENTARA GRAND HOTEL OSAKA, HOTELKEIHAN NAMBA GRANDE, Hakata East Terrace and (tentativename) Mita Building to build a portfolio. At the same time,
participate in new investment areas such as value-up investment
and set up offices

As in FY2022, we will continue to focus on the following measuresin addition to the key measures in the Medium-Term Business Plan.

Group Net Sales(Billions of Yen)

(FY)

2018

132.9 115.3 120.0

2019

41 T A I S E I ANNUA L R EPORT 2023

2020

2021

2022

2023

(Target)⃝Participated in a rental housing development project to convert
part of an existing office building into rental housing in Los
Angeles, California, USA⃝Established Taisei Real Estate Asset Management Co., Ltd., anasset management company, to prepare for the start of private
REIT operations in FY2023⃝Started participating in the development, operation, maintenanceand management of public and private facilities in the Todoroki
Green Space Redevelopment, Operation, Etc. Project⃝Continue investments in line with the Medium-Term Business
Plan to build a stable earnings base for the Group’s development
business (planned investment of ¥118 billion in FY2023)⃝Overseas investments are made mainly in the United States,
where the real estate market is highly stable, and Vietnam andTaiwan, where growth is high.
⃝FY2023 start of private REIT management (Initial asset size
expected to be approximately ¥15 billion)⃝In the PFI and PPP fields, we will promote the development andoperation of facilities under the Todoroki Green Space
Redevelopment, Operation, Etc. Project.
⃝In the facilities management business, in addition to involvementfrom the design stage, the Group maximizes its capabilities byadopting AI/IoT technologies and expanding its O&M business.
T A I S EI A N N UA L R EPO R T 2023 42

About the Taisei Group

Taisei Group’s Growth Strategy

Sustainability Section

Taisei Group’s Growth Strategy

Governance Section

Data Section

Business-RelatedGroup

Engineering Business

Managing Executive Officer
Chief of Engineering Division

Major Group Companies in Charge:

Shinichiro TAKAHAMA

Network Alliance Corporation

As a Pioneering General Contractor in Engineering
We established the engineering division in 1968, ahead of other general contractors. Our core business model focuses on comprehending manufacturing processes and plant operations at manufacturing facilities, with the aim of optimizing entire facilities,
beginning with the selection of production equipment.
For the manufacturing facilities we specialize in, our goal is to secure orders for the whole manufacturing facilities including buildings. This is achieved by merging our construction capabilities, with which we provide the manufacturing space and environment,
and our technical expertise in production, logistics, and information technology.
Moving forward, we intend to adapt to the ever-changing market conditions. Leveraging our extensive technical knowledge andexpertise, we will target a broad range of industries and sectors. We aim to continuously and stably meet the demand for capital
investment, thereby realizing our business growth.
To Expand Orders Received by Catching Favorable Trends towards Our BusinessIn recent years, with rapid changes in the society and the market, accelerated by the COVID-19 pandemic and advancements indigitalization, we have seen favorable conditions for our engineering business. Investments have actually grown in several businessfields: biopharmaceutical production facilities such as vaccine production lines in the pharmaceutical sector; manufacturing facilities
for primary products of electronic devices related to semiconductor production; and labor-saving and automated facilities aimed atenhancing productivity in the food industry.
We strive to expand our business opportunities across various sectors by offering our unique technologies and problem-solution
capabilities, which we have acquired through our extensive experience in designing and construction, as well as optimal solutions to
the latent challenges and needs of our clients for manufacturing facilities.
To Achieve JPY 100 Billion in Received Orders and Net Sales
Looking beyond the current Medium-Term Business Plan, we aim for the numerical target that the amount of orders received and net
sales should reach ¥100 billion by FY2030. This is double the orders received and quadruple the net sales compared to those of
FY2021 results, aligning us with the business performance levels of our competitors specialized in the engineering field. One of ourcritical challenges is to establish the systems to achieve these increased orders and sales.
Firstly, in line with our employment plan aimed at the expansion of our business, we will enhance our team’s strength bycontinuing to recruit new graduates as well as mid-career professionals and by strengthening our training methodologies.
Particularly, we will concentrate on urgently training project leaders who possess in-depth understanding of our clients’ manufacturing processes and specialized expertise in plant operations, and facilitating the transfer of this technical know-how to the next
generation. Further, by enhancing alliances with external partners, we aim to develop collaborative systems and expand ourcapacity to manage increased business volume.
By creating and offering new value beyond the traditional confines of the construction industry, our Engineering Division aims toestablish itself as a new pillar of Taisei Group, alongside the building construction business and the civil engineering business. This
will enable us to produce unique significance not found in other general contractors in the market.

TOPICS

Solid Dosage form Facility at the 2nd Kyushu Factory, Sawai Pharmaceutical Co., Ltd.

3rd development building, Tokyo Electron Miyagi Ltd.

New Solid Dosage Form Facility at the 2nd Kyushu
Factory, Sawai Pharmaceutical Co., Ltd.

Receipt of the order for the 3rd development building of Tokyo Electron Miyagi Ltd.

Start of construction of a new solid dosage form facility at the 2nd Kyushu
Factory, a large generic drug factory of Sawai Pharmaceutical Co., Ltd.
The construction of a new solid dosage form facility started on thepremises of the 2nd Kyushu Factory of Sawai Pharmaceutical Co., Ltd.
This facility will be very important for achieving stable supply of genericdrugs by securing space for the production of up to three billion tabletsin advance, initially launching the production of two billion tablets, andplanning to proceed with implementation according to market conditions and in-house development. This facility is large in size including
production equipment, and the construction period must be short. We
are, therefore, working on it by joining forces.

We received an order for a new development building at the head officeplant of Tokyo Electron Miyagi Ltd. (Miyagi Prefecture), and started its
construction. In the semiconductor market, which is expanding due tothe digitalization of society, the semiconductor manufacturing equipment
developed and manufactured by this company is expected to continue
growing significantly in the future. This new building is attracting major
expectations and attention, as it is constructed for the purpose ofproviding products equipped with features demanded by clients in atimely manner, with an eye to further reinforcement of technologicaldevelopment capabilities and expansion and diversification of technological needs. The Company will continue to make every effort to provide
high-quality buildings that meet clients’ needs.
Anothercompany’s plant

Joint collection

Raw material
suppliers⃝Coping with GDP (Securing logistics quality)⃝CN compliance (Promotion of ESG management)⃝BCP measures (Ensuring business continuity)⃝Year 2024 Problem (Transportation security andlogistics cost control)⃝Support for DX solutions

Anothercompany’s plantRaw material
supplier

Joint collection

Manufacturer C

Manufacturer C
Manufacturer C

Joint transportation

Kansai C

Kanto C

Joint trunk flights between manufacturers

Joint delivery

Tru
nk
flig
hts

Exclusive contract service

hts
flig
nk
Tru

Joint delivery
Exclusive contract
servicePickup service
Large wholesaler

Plant
Business partner

iFactory® Continuous Drug Substance Production System

Large wholesaler

Local/remotetrading partner

Kinki and Tokai
regions

Routeconsolidation

iFactory® Continuous Drug Substance Production System
Completion of a demonstration plant for the iFactory® continuous drug
substance production system. We participated in the development ofiFactory®, a pharmaceutical manufacturing facility that adopts acontinuous production system instead of the current batch system.
iFactory® enables continuous production of high-performancechemicals by modularizing unit operations. Depending on the item, it
can change the type and arrangement of modules and produce theonly necessary amount of product only when they are needed.
The past verification revealed that the developed system can significantly
reduce energy and waste compared to the conventional system.
In the future, we aim to commercialize production facilities that
contribute to energy conservation and the creation of a sustainable
society in Japan.
*This project is subsidized by the New Energy and Industrial Technology
Development Organization (NEDO).

Production plant

Shipper

Kanto region Business partner

Routeconsolidation

Local/remotetrading partner

NAC
NAC Cooperative Delivery Model

Initiatives of Network Alliance Corporation (NAC)
Network Alliance Corporation (NAC) is a 3PL* business company
established in 2003 to provide joint distribution services to pharmaceutical manufacturers.
Pharmaceutical distribution requires strict temperature control andother logistics quality in accordance with the Good Distribution Practice(GDP) Guideline (the Ministry of Health, Labour and Welfare), resulting inincreased outsourcing from pharmaceutical manufacturers.
NAC is working to resolve a variety of issues through joint delivery.
*3PL (third-party logistics): A service in which a third party other than the
shipper and transportation companies is comprehensively entrusted with theshipper’s distribution operations, or companies that provide such a service.

Segment Overview

Medium-Term Business Plan (2021–2023) Key Initiatives

Progress and Achievements for FY2022

Future Measures

Net sales increased 43.3% year on year to ¥39.4 billion, despite
cancellations and postponements of planned projects due to thecorona crisis.

⃝To strengthen the existing sectors• Pharmaceuticals sector: Utilize our strengths in terms oftechnology and expertise to enter the next-generation medical
sector, including biopharmaceuticals and regenerative medicine• Food products sector: Enhance upstream consulting functions,and utilize technical expertise related to automation and laborsaving technology developed in the pharmaceutical sector⃝To take on new growth sectors• Fine chemicals sector: Utilize the technology from the pharmaceuticals sector to enter markets in areas such as semiconductor
and electronic device materials manufacturing facilities• Logistics sector: Secure competitive superiority in the logistics
facility sector, and expand sales channels in the pharmaceuticals
transportation and delivery business, by making use of ourexpertise related to proposals based on feasibility studies (FS)and the Guidelines on Good Distribution Practice (GDP)⃝To develop the systems for expanding the scope of our businesses• Utilize external human capital to expand our production
capabilities⃝Deepening of Traditional Sectors:•P harmaceuticals: Expanded orders leveraging our strong trackrecord in biopharmaceutical manufacturing facilities, combinedwith differentiation strategies that include automation andlabor-saving technologies.
•F ood Industry: Expanded order activity starting from the earlyphases, including feasibility study (FS*) operations.
•M anufacturing Facilities: Consistent performance, especially inthe electronic devices sector.
⃝Pursuits in Growth Sectors:•Fine Chemicals: Expansion in orders for manufacturing facilities
focused on fine chemicals, including pharmaceutical active
ingredients and electronic materials.
•Logistics: Secured orders for logistics facilities linked with
manufacturing plants.
⃝Structural Preparations for Business Expansion:•Broadened collaborative structures with external companies,
inclusive of alliances.

Continuing from the core strategies of our Medium-Term Business
Plan, we will emphasize the following:Group Net Sales(Billions of Yen)

(FY)

2018

27.5

2019

43 T A I S E I ANNUA L R EPORT 2023

2020

2021

39.4

2022

53.0

2023

(Target)* FS (Feasibility Study): Involves promoting consulting and evaluating the feasibility
during the business planning phase.

⃝Broad application of our distinctive technologies and expertise.
⃝Intensified focus on feasibility studies and consulting services.

⃝Agile and timely proposals in line with shifts in societal contexts
and market trends.
⃝Assurance of hiring and nurturing employees according to afuture-oriented personnel strategy and cultivating project leaders
swiftly to establish a foundational support for business expansion.

T A I S EI A N N UA L R EPO R T 2023 44