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.

Segment Overview

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

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.

Group Net Sales(Billions of Yen)

(FY)

2018

899.4

2019

2020

2021

991.8

2022

1,049.4

2023(Target)To establish a framework to enhance the competitiveness of
new construction orders.
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.

Progress and Achievements for FY2022
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.
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 A N N UA L R E P O R T 2 0 2 3Advanced the transformation into back-offices for the
Mechanical & Electrical Division and branch Mechanical &Electrical Department.

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

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

Future Measures
Enhance collaboration with the design department to better
address customer demands and further enrich proposal contents.
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 ISE I A NNUA L R E P OR T 2 0 2 3 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.

Segment Overview

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

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.

Group Net Sales(Billions of Yen)

402.0 408.5

459.6

To develop the systems to enhance the Group’s competitivenessin receiving orders• 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 stage

To enhance the teams to win bids in the sectors where growth isexpected, etc.
(FY)

2018

2019

2020

2021

2022

2023
(Target)• Enhance the teams and personnel to win bids for the projects
related to dams, wind power generation facilities, andexpressway renewal
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 A N N UA L R E P O R T 2 0 2 3

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.

Progress and Achievements for FY2022
Strengthened our order acquisition capabilities• Handled more projects due to an enhanced bidding organizational
structure• Secured substantial orders for NEXCO’s highway-related projects
Improved 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
operations
Expanded 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 projects

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.

Future Measures
Expand the scope of Group company ventures• Continue collaborative technological development with Group
entities to establish unique and differentiated technologies• Enhance the bid organization structure to target and secure
more government contracts
Promote 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 construction
Broaden business domains• Engage in PPP/PFI ventures and concessions, leveraging theGroup’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
T A ISE I A NNUA L R E P OR T 2 0 2 3 38

About the Taisei Group

Taisei Group’s Growth Strategy

Taisei Group’s Growth Strategy

Sustainability Section

Group

Overseas Construction Business

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.

TOPICS

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.

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.

CommonTo 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

(FY)

2018

2019

2020

2021

82.0

2022

76.0
2023
(Target)Building
To build local networks by placing more and younger local sales staff
To focus on allocating human resources to the airport sector,
where the Group is internationally competitive
Civil engineering
To cut the costs by utilizing the resources of alliance partners
and our supply chain New business

Qatar Hamad International Airport

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

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

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

Group Net Sales(Billions of Yen)

Governance Section

Business-Related

Future Measures
Non-contracting
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.

Progress and Achievements for FY2022
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.

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 A N N UA L R E P O R T 2 0 2 3

T A ISE I A NNUA L R E P OR T 2 0 2 3 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.

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 OSAKATo 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.

Segment Overview

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

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.

Group Net Sales(Billions of Yen)

(FY)

2018

132.9 115.3 120.0

2019

2020

2021

2022

2023
(Target)41 T A I S E I A N N UA L R E P O R T 2 0 2 3Real 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 condominiums
Facility 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 management
PPP, 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 business

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 competitiveofﬁce 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)

Progress and Achievements for FY2022
Target 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
Participated in a rental housing development project to convert
part of an existing office building into rental housing in Los
Angeles, California, USA
Established Taisei Real Estate Asset Management Co., Ltd., anasset management company, to prepare for the start of private
REIT operations in FY2023
Started participating in the development, operation, maintenanceand management of public and private facilities in the Todoroki
Green Space Redevelopment, Operation, Etc. Project

Future Measures
As in FY2022, we will continue to focus on the following measuresin addition to the key measures in the Medium-Term Business Plan.
Continue 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 ISE I A NNUA L R E P OR T 2 0 2 3 42

About the Taisei Group

Taisei Group’s Growth Strategy

Taisei Group’s Growth Strategy

Sustainability Section

Group

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.

Segment Overview

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

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

(FY)

2018

39.4

53.0

27.5

2019

2020

2021

2022

2023
(Target)43 T A I S E I A N N UA L R E P O R T 2 0 2 3

Data Section

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 ofﬁce
plant 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.

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 sector
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
capabilities

Anothercompany’s plant

Anothercompany’s plantRaw material
suppliers

Group Net Sales(Billions of Yen)

Governance Section

Business-Related

Joint collection

Coping 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

Raw material
supplier

Joint collection

Manufacturer C

Manufacturer C

Joint transportation

Manufacturer C
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
Large wholesaler

iFactory® Continuous Drug Substance Production System

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).

Progress and Achievements for FY2022
Deepening of Traditional Sectors:• Pharmaceuticals: Expanded orders leveraging our strong trackrecord in biopharmaceutical manufacturing facilities, combinedwith differentiation strategies that include automation andlabor-saving technologies.
• Food Industry: Expanded order activity starting from the earlyphases, including feasibility study (FS*) operations.
• Manufacturing 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.
* FS (Feasibility Study): Involves promoting consulting and evaluating the feasibility
during the business planning phase.

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.

Future Measures
Continuing from the core strategies of our Medium-Term Business
Plan, we will emphasize the following:
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 ISE I A NNUA L R E P OR T 2 0 2 3 44