01

SectionGrowthStrategies

21

Long-Term Vision and Medium-Term
Management Plan

23

Value Creation Process

27

Key Issues (Materiality)

29

Strengthening the Management Foundation

31

Business Strategies

33

Main Recent Projects

41

Feature 02: Yufutsu Biomass Power Plant

43

Takuma CSR Report 2023

22

Long-Term Vision

Vision 2030

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

Global-scale concerns include a worsening of the problem of climate change, deterioration in sanitation, andgrowth in energy demand due to rapid population growth and urbanization, particularly in emerging nations.
Concerns in Japan include falling internal demand caused by the shrinking and aging of Japan’s population,shortages of human resources and future leaders, fiscal challenges, and aging infrastructure.

Domestic(Japan)Vision for FY2030
Based on external environmental factors, the Takuma Group will implement ESG management, an approach thatconsists of addressing key ESG-related issues in an effort to achieve sustained growth by resolving issues facedby customers and society through business activities.
In pursuing business activities built on a core of ESG management, we will strive to become a great partner for ourcustomers by leveraging the technologies and expertise related to energy utilization and environmental protectionthat are the Group’s strengths, along with the relationships of trust we have developed with customers over the longterm through after-sales service and other interactions. With the useful technologies and services created throughinnovation by the Group, which carries on the spirit of a tenacious inventor, we will resolve challenges faced bycustomers and society, with a focus on the fields of renewable energy utilization and environmental protection.
Through the practice of ESG management, we will grow together with customers and society and contribute to therealization of a sustainable society while striving to achieve ordinary profit of JPY 20 billion.

External environment outlook

GlobalGrowth Strategies

Section 01

The Takuma Group’s management strategy

Aim to maintain our role of being an indispensable presence in society as aleading company in the field of renewable energy utilization and environmental protection.
Sustained growth alongside our customers and society throughimplementation of ESG management
FY2030Rising demand for resources, food, water, energy, and waste treatment as the world’s population grows
Increasingly serious problem of climate change
Progress in the Fourth Industrial Revolution and digital transformation (DX)A shortage of human resources and leaders and depopulation of suburban and rural
areas as a result of the shrinking and aging of Japan’s population
Reduced tax revenue due to Japan’s shrinking population and tight financial
conditions due to the measures addressing natural disasters and infectious
diseaseContraction and rationalization of public services and increasing use of private-sector
companies due to tight financial conditions
Dismantling, consolidation, effective use, and replacement of aging and underutilized
infrastructure, housing, and other facilities

Provision of technologies and services

Innovation

FY2020

Customers
Takuma Group

Ordinary profit:

11 billion

JPY

Creative R&D

Resolutionofchallenges

Ordinary profit:

JPY

20 billion

Society

Sharing ofneeds andissuesMedium- and long-term roadmap
In addition to further expanding recurring revenue model businesses as the core driver of growth, we will strive
to realize steady growth in all businesses, for example through maintaining and expanding of our EPC business.
Moreover, we will expand businesses in the environmental and energy fields through new-business creation,
M&As, and other means.

Ordinary profit:
JPY

20 billion

Illustration of net sales

New Businesses

13th Medium-Term Management Plan

Package Boiler Business, Equipment and Systems Business
Overseas Environment and Energy BusinessFirst step towards realizing
Vision 2030

Expansion focusing on Thailand, Taiwan, and emerging nations
Cultivation of related products and services into a core group business

Laying the foundations for
additional growth

Domestic Environment and Energy Business

EPC business

Municipal Solid Waste Treatment Plant Business, Energy Plant Business,
Water Treatment Plant Business, and Power Retail Business

EPC business

Recurring revenue
model businesses

Maintenance and enhancement of the position of our businesses as a leading company

Recurring revenue model businesses

O&M, Power Retail, etc.
FY202123

FY2023

Additional expansion as a core driver of growth

FY2030

Takuma CSR Report 2023

24

Takuma Group 13th Medium-Term
Management Plan

Progress towards implementing the 13th Medium-Term Management Plan
FY2022 financial highlights

The 13th Medium-Term Management Plan began in FY2021 as an effort to realize the Vision 2030 goal of achieving
ordinary profit of JPY 20 billion. The plan lays the foundations for further growth and takes the first steps towards
realizing the plan’s goals. Under it, we will strengthen conventional businesses by reinforcing the Group’s
management foundation and at the same time accelerate its response to future environmental changes. We will
strive to realize sustained growth alongside customers and society by implementing ESG management throughour business activities.

FY2020

FY2030

Positioning and financial targets

Previous vision
12th Medium-Term
Management Plan

Ordinary profit
JPY

11.0 billion

Although the market environment continued to strengthen during FY2022 (the fiscal year ended March 2023), thesecond year of the current Medium-Term Management Plan and orders received remained high at 168.5 billion
yen, including one construction and operation (BTO) business order for a municipal solid waste treatment plantand seven new-construction orders, including for biomass power plants, orders received fell 23.6 billion yen fromFY2021 (the fiscal year ended March 2022), when we received three construction and operation (DBO) businessorders for municipal solid waste treatment plants. Nonetheless, steady progress on construction of previously
ordered plants boosted net sales by 8.5 billion yen to 142.6 billion yen, and ordinary profit rose 4.0 billion yen to
14.6 billion yen from the previous fiscal year by improved profitability as well as augmented growth in net sales.

FY2021

Vision 2030
13th Medium-Term
Management PlanFirst step towards realizing
Vision 2030

The Group’s financial
foundations were
strengthened by the endof the 12th Medium-Term
Management Plan

Ordinary profit
JPY

20.0 billion

Laying the foundations
for additional growthThree-year
cumulative
ordinary profit
JPY

192,244

168,558（12.3％）

Backlog (Millions of yen)

445,304

471,211

5.8%

Net sales (Millions of yen)

134,092

142,651

6.4%

Operating profit (Millions of yen)

9,928

13,813

39.1%

Ratio of operating profit

7.4%

9.7%

2.3pt

Ordinary profit (Millions of yen)

10,647

14,684

37.9%

Profit attributable to owners of parent (Millions of yen)

7,434

9,621

29.4%

Net income per share (Yen)

91.53

120.22

31.3%

DBO and BTO businesses: Construction and operation businesses (EPC + O&M),
consisting either of design, build, operate (DBO) or build, transfer, operate (BTO).

Progress towards targets

Orders received:
JPY 450.0 billion

Ordinary profit(reference)Strengthening the management foundation P31-32
Capital investment

Cumulative total:
JPY

33.6 billion

Orders received (reference)

13th Medium-Term
Management Plan

Cumulative total:

36.0

JPY
billionRate of progress:

70.3%
14,684

12,334

Basic policy

10,300Digital technologies

Partnerships

25

11,02812th Medium-Term
Management Plan

Cumulative total:
JPY

517.2 billion
188,563

179,829
12,00010,647

148,830

13th Medium-Term
Management Plan

Cumulative total:

450.0

JPY
billionRate of progress:

80.2%

192,244
168,558 170,000

CompliancePursuit of business activities that help resolve challenges facedby customers and society P33-40
Municipal Solid Waste Treatment Plant Business
Power Retail Business
Overseas Businesses
Equipment and Systems BusinessYear-on-year★

36.0 billion

R&D, manufacturing
and engineering capabilities

FY2022

Orders received (Millions of yen)

12th Medium-Term
Management Plan

Human resources

Growth Strategies

Section 01

The Takuma Group’s management strategy

Energy Plant Business
Water Treatment Plant Business
New Businesses
Package Boiler Business

FY2018 FY2019 FY2020(Millions of yen)

FY2021 FY2022 FY2023(Forecast)

FY2018 FY2019 FY2020(Millions of yen)

FY2021 FY2022 FY2023(Forecast)

Cumulative ordinary profit at the end of the plan’s second year totaled 25.3 billion yen, including ordinary profit of 10.6
billion yen posted during FY2021. We anticipate realizing ordinary profit of 12.0 billion yen during FY2023 (the fiscal
year ending March 2024) for a total of 37.3 billion yen, achieving the three-year cumulative ordinary profit target of 36.0
billion yen under the plan. Based on this outlook, we plan to increase the annual dividend by 5 yen to 48 yen per share.

Takuma CSR Report 2023

26

Section 01

The Takuma Group’s management strategy● Conserving the living environment

through the construction and operation of safe,
secure municipal solid waste treatment plants

Value Creation Process● Maintaining regional and industrial

infrastructure through the stable,highly efficient supply of energy

We will signiﬁcantly strengthen our efforts to address Key Issues (Materiality) and create new value through businessactivities that take advantage of the Group s strengths based on medium- and long-term trends and societal issues.

External environment
GlobalDomestic(Japan)Rising demand for energy andwaste treatment
Climate change
DX progress

Opportunities

Shortages of human resources
and leaders
Rationalization of public
services and use ofprivate-sector companies
Effective use of
aging infrastructure

Risks/
opportunities
Risks

Realizing the Takuma Group sManagement Principles
and● Revitalizing local economics and strengthening

resilience through the construction andoperation of facilities

Customers
andregional
society

Risks and opportunities

P23

Growth Strategies

Demand for renewable energy, energy savings,
and high efficiency
Demand for locally produced, locally consumed energy
Demand for effective use of unutilized resources
and biomass
Increases in productivity and enhancement ofcompetitiveness through human resources development
and promotion of diversity

Vision 2030

● Creating clean energy● Reducing greenhouse gas emissions● Reducing environmental footprints

OUT COM E

Changes in environment- and energy-related policy, laws,
and regulations
Reduction in domestic waste volume
Shortages of employees with specialized skills
Health issues, serious occupational accidents,
legal violations

Environment● Building stable relationships oftrust through fair and safe transactions● Realizing a workplace environment

Key Issues (Materiality)

OUTPUT

P29

1

Helping combat climate change

3

Further strengthening relationships of trust with customers and communities

4

Pursuing partnerships and innovation

5

Promoting activities of human resources

6

Ensuring safety and health

7

Strengthening corporate governance

INPUT

2

Conserving resources and protecting the environment

Management Resources and Strengths

13th Medium-Term
Management Plan

Relationships of trust with customers

Proposals from the customer’s perspective
Advanced plant design and construction capability through proprietary technologies
developed over many years of experience
Timely, precise after-sales service to minimize impacts on customers’ businesses andservices when issues occur

Technology and expertiseEngineering throughout the plantlife cycle, from planning to construction
and operation

Our achievements

Boilers:
3,200+ units(of which, biomass boilers:
630+ units)
Municipal solid waste treatment plants:
370+ facilities
Industrial waste treatment plants:
120+ facilities
Sewage sludge incinerators:
20+ facilities
Sand filtration systems:
2,800+ units

27

Business Strategies
Domestic Environment andEnergy Business
Overseas Environment andEnergy Business

Strengthening themanagement foundation
Human resources
Digital technologies

Customers
TakumaGroup

Society

P25

Equipment and Systems Business

Sharing ofneeds andissuesInnovation

Partnerships
Capital investment

R&D, manufacturing
and engineering capabilities
Compliance

Resolution ofchallenges
Provision of technologies
and services

Business
partners

Employees

Shareholders

We resolve Key Issues
and accommodate
customer needs
through innovation.

Package Boiler Business

Creative R&D

Provision oftechnologies(products)
and services

characterized by health, safety,
high productivity,and high motivation● Increasing
corporate value

Municipal solid waste
treatment plants
Energy plants

FY2022 results

P83

Water treatment plants
Power retail business
After-sales
service for plants(operation management,
maintenance)
General-purpose boilers
such as compact
once-through boilers andvacuum-type
hot water heaters
Air-conditioning, water, andwastewater equipment
installation services
Equipment for use in thesemiconductor
manufacturing industry
such as clean devices
and cleaning systems

Net sales

Ordinary profit

JPY

JPY

142,651

Profit attributableto owners of parent

JPY

14,684

million

9,621

millionROE

9.9%

millionDividends

JPY

43

per share

Takuma CSR Report 2023

28

Identification process

Key Issues (Materiality)

The following process was used to identify key issues.

We are practicing ESG management to address each
Materiality while balancing contributions to customers andsociety and sustained growth by developing our businesses
based on the medium-term management plan and providing
necessary technologies and services.

Helping combat climate change

E(QYLURQPHQWDO,QLWLDWLYHV

1. Promoting renewable energy (non-fossil energy)
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Conserving resources andprotecting the environment
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Further strengthening
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JVTT\UP[PLZS

Pursuing partnerships andinnovation
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Promoting activities of humanresources
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Strengthening corporate
governance:[YLUN[OLUPUNJVYWVYH[LNV]LYUHUJL:[YLUN[OLUPUNYPZRTHUHNLTLU[,UZ\YPUNJVTWSPHUJLStep 1

Extremely important

Step 2

Step 3

Analyzing the status quo and organizing issues

Evaluating importance and verifying suitability

Identifying Key Issues

We analyzed a variety of management issues that affect the company
from the dual perspectives of the external and internal environment.

We created a matrix organizing the 64 issues described below byanalyzing and evaluating their importance for stakeholders andsociety on the vertical axis and their importance for Takuma on thehorizontal axis. We then verified the suitability of the list througha process that included steps such as comparisons with othercompanies and exchanges of views with responsible departments
to narrow down the list of Key Issues to 19 that deserved to beaddressed by the Group.

Through discussions among
members of the company’s
executive leadership, seven
Key Issues to be addressed by
the Group were finalized basedon the 19 issues as describedto the right.

We compiled a list of 64 issues by analyzing the external environment
from the standpoint of ISO 26000, GRI, SDGs, FTSE, and DJSI indicatorsand requirements, and the internal environment from the standpoint of
indicators provided by the Group’s Management Principles, strategies,
current initiatives, and other yardsticks.

Risks and opportunities
Risks
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LU]PYVUTLU[HSYLN\SH[PVUZ
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emerging nations
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Risks
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Risks
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Risks
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Z[YLUN[OLULKJVYWVYH[LNV]LYUHUJLImportance for stakeholders
and society

In implementing ESG management, in 2021 we identified seven
Key Issues (Materiality) related to ESG that deserve to be given
priority when being addressed through our business activities.

Materiality and issues

Growth Strategies

Section 01

The Takuma Group’s management strategy

Key Issues as identified(Materiality)

Helping combat climate change
Conserving resources andprotecting the environment
Further strengthening relationships oftrust with customers and communities
Pursuing partnerships and innovation
Promoting activities of human resources
Ensuring safety and healthStrengthening corporate governanceImportant

KPI

࡛:\WWS`VMIPVTHZZWV^LYWSHU[Z
࡛:\WWS`VMM\LSJVU]LYZPVUIPVTHZZ97-L[J
boilers
࡛:\WWS`VMYLUL^HISLLULYN`HUK*6 2 -free power
࡛9LK\J[PVUPU*6 2LTPZZPVUZLULYN`JVUZ\TW[PVU
I`;HR\TH
࡛0TWYV]LTLU[PULULYN`LɉJPLUJ`H[MHJPSP[PLZ;HR\THVWLYH[LZVUHJVU[YHJ[\HSIHZPZ࡛7YVWVZHSVMLULYN`LɉJPLUJ`PTWYV]LTLU[ZMVY
J\Z[VTLYMHJPSP[PLZHUKLX\PWTLU[■CO2 emission reduction targets through our own
products and services■Magnitude of potential reduction in CO2 emissions due to
newly delivered power plants*

࡛:\WWS`VMOPNOLɉJPLUJ`SV^LU]PYVUTLU[HSPTWHJ[Energy from Waste plants
࡛:\WWS`VMZL^HNLZS\KNLM\LSLKWV^LYWSHU[Z
࡛:\WWS`VMHK]HUJLK[YLH[TLU[ZHUKÄS[LYZ`Z[LTZ
࡛,Z[HISPZOTLU[VMJVTI\Z[PVU[LJOUVSVN`MVY
\U\[PSPaLKIPVTHZZ࡛+L]LSVWTLU[VM[LJOUVSVN`MVYYL\ZPUNIV[[VTHZO
࡛+ L]LSVWTLU[VM[LJOUVSVN`MVYYLJV]LYPUNHUK\ZPUN*6 2

P53

Extremely important

Progress

6SHFLðFLQLWLDWLYHV

P53

Importance for the
Takuma Group(as of the end of FY2022)

800,000 tons per year
〈FY2030〉2.5 million tons per year
〈FY2023〉)PVTHZZWV^LYWSHU[ZHUK,ULYN`MYVT>HZ[LWSHU[ZKLSP]LYLKMYVT-@[V-@

■In-house CO2 emissions reduction targets〈 FY2023〉Effectively zero CO2 emissions by the Takuma/LHK6ɉJLHUK[OL/HYPTH-HJ[VY`:JVWLHUK:JVWL〈 FY2030〉Effectively zero CO2 emissions by all Takuma^VYRZP[LZPU1HWHU/LHK6ɉJLZIYHUJOVɉJLZMHJ[VYPLZHUKJVUZ[Y\J[PVUZP[LZ:JVWLHUK:JVWL- @[HYNL[ZPUJS\KPUNNYV\WJVTWHUPLZYLTHPU\UKLYJVUZPKLYH[PVU*6 2LTPZZPVUZMYVTWYVJ\YLKWYVK\J[ZHUK\ZLVM;HR\THWYVK\J[ZI`J\Z[VTLYZ:JVWLHSZVYLTHPU\UKLYJVUZPKLYH[PVU

184,000

tons per year*

*HSJ\SH[LKIHZLKVUH]HPSHISLNLULYH[PUNJHWHJP[`YLUL^HISLLULYN`HZVMVULTVU[OHM[LYKLSP]LY`MVY
WSHU[ZKLSP]LYLKPU-@HUK-@
MV\Y^HZ[L[YLH[TLU[WSHU[ZVUL
ZL^HNLZS\KNLWSHU[HUKIPVTHZZ
plants).

356

tons per year*

;V[HSVM:JVWLHUK:JVWLMVY[OL/LHK6ɉJLHUK/HYPTH-HJ[VY`࡛:\WWS`VMWYVK\J[ZHUKZLY]PJLZ[OH[ZH[PZM`
J\Z[VTLYZ
࡛0TWYV]LTLU[ZPU[OLX\HSP[`VM;HR\TH»ZVWLYH[PVUHUK6 4I\ZPULZZLZ
࡛0UJYLHZPUNZVWOPZ[PJH[PVUVMTHPU[LUHUJLZLY]PJL
࡛0UP[PH[P]LZHKKYLZZPUN[OL9LNPVUHS*PYJ\SHYHUK,JVSVNPJHS:WOLYL9LNPVUHS*,:YLNPVUHS\ZLHUKKLJLU[YHSPaLKWV^LYZ\WWSPLZ࡛0UP[PH[P]LZZ\JOHZ777[OH[HKKYLZZHKKP[PVUHS\ZL
VMWYP]H[LZLJ[VYLU[P[PLZP59
࡛0UJYLHZLZPU[OLHKKLK]HS\LVMMHJPSP[PLZHUKWSHU[Z
࡛:[YLUN[OLUPUNVMJVTWL[P[P]LULZZPU,7*
VWLYH[PVUZVWLYH[PVUTHUHNLTLU[HUKTHPU[LUHUJLZLY]PJL
࡛7\YZ\P[VMVWLUPUUV]H[PVU
࡛7\YZ\P[VMUL^I\ZPULZZLZ[OH[JVU[YPI\[L[V[OL
LUOHUJLTLU[VML_PZ[PUNI\ZPULZZLZHUKZLY]PJLZ
࡛+L]LSVWTLU[VM[LJOUVSVNPLZHUKWYVK\J[Z[OH[HYLZV\NO[I`ZVJPL[`HUKJ\Z[VTLYZ■Number of female employees brought into the main
career track and management positions

࡛/PYPUNVMUL^NYHK\H[LZHUKTPKJHYLLYLTWSV`LLZ
࡛+L]LSVWTLU[VMVW[PTHSO\THUYLZV\YJLZ
WYVNYHTZPUYLZWVUZL[VZVJPHSJOHUNLZ
࡛+L]LSVWTLU[VMHULɈLJ[P]L[YHPUPUNZ`Z[LT࡛(J[P]LOPYPUNVMKP]LYZLO\THUYLZV\YJLZHUKKL]LSVWTLU[VMJHYLLYZ\WWVY[WYVNYHTZ

■Number of fatal accidents〈FY2022〉■Number of serious compliance violations〈FY2022〉P61

35 or more〈*\T\SH[P]L[V[HSMVY-@[V-@〉■Percent utilization of parenting support programs

25% or greater〈(]LYHNL[V[HSMVY-@[V-@〉0〈 Cumulative total for-@[V-@〉16〈 Average total for-@[V-@〉

35％
0

P63

࡛9LK\J[PVUPU[OLVJJ\YYLUJLVMVJJ\WH[PVUHSHJJPKLU[Z࡛7YL]LU[PVUVMOLHS[OWYVISLTZHUKYLJ[PÄJH[PVUVM
V]LY^VYR࡛0TWSLTLU[H[PVUVM^VYRZ[`SLYLMVYTZ

P67
࡛:\Z[HPULKPTWYV]LTLU[[OYV\NOWYHJ[PJLZZ\JO
HZL]HS\H[PVUZVM[OLLɈLJ[P]LULZZVM[OL)VHYKVM
+PYLJ[VYZ
࡛*VU[PU\LKJVUK\J[VMHWWYVWYPH[LPU[LYUHSH\KP[Z࡛(KKP[PVUHSPTWYV]LTLU[PU[OLLɈLJ[P]LULZZVMYPZRTHUHNLTLU[HJ[P]P[PLZ࡛,]LUTVYL[OVYV\NOWYVQLJ[YPZRTHUHNLTLU[࡛0TWSLTLU[H[PVUHUKVUNVPUNYLHZZLZZTLU[VM
I\ZPULZZJVU[PU\P[`WSHUUPUN)*7
࡛6UNVPUNPTWSLTLU[H[PVUVMJVTWSPHUJLLK\JH[PVU

0

0

P69

*For more information about the reasoning underlying our Materiality identification process, please see the Takuma website.

29

Takuma CSR Report 2023

30

Growth Strategies

Section 01

The Takuma Group’s management strategy

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

Human resources
Theme
1

R&D, manufacturing and engineering capabilities

Strengthening recruiting activities
and reviewing employment systems

Theme
1

Planning new-graduate and mid-career hiring
Reviewing programs to make use of older workers and tohire specialized workers

Theme
2

Theme
3

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

Theme
2

Reviewing the human resources
development system

Implementing career development support measures suchas job rotation programs to help train engineers and otherpersonnel, programs to follow up on the development ofyoung workers, etc.

Pursuing workstyle reforms andenhancing the workplace environment

Examining a diverse range of workstyles that allow workers
to do their jobs without regard to time or place
Implementing health-focused management

Strengthening R&D

Strengthening manufacturing andengineering capabilities

Refining core technologies, overall plant operations, andprincipal equipment and further improving quality
Increasing intrinsic safety in design and installation, andpreventing occupational accidents

Progress

We were able to significantly increase the number of people
participating in recruiting information sessions by adopting
a hybrid format that combines in-person and online
components. Career hires also rose, particularly in theConstruction Division and Engineering Division. Hiring of
female employees is also rising gradually. We are also working
to improve utilization of parenting support programs. P63-65

Progress

In addition to refining existing plant-related technologies andpursuing joint research and development on decarbonization
technologies with other companies and universities, we work
to prevent occupational accidents, for example by making
work equipment safer and offering VR-based hazards
experience education.

Capital investment
Progress

Our New Harima Factory began operating in January 2023.
The facility has put in place production structures capable ofaccommodating diversifying customer needs based on thefollowing three concepts:

Digital technologies
Theme
1

Bringing digital technologies to
products and services

Applying digital technologies in order to reduce labor
requirements and streamline operations at plants, improving
maintainability and functionality, and realizing even morestable operation

Theme
2

Improving management efficiency

Implementing paperless workflows and Robotic Process
Automation (RPA)
Sharing knowledge and expertise on a companywide basis

Progress
In addition to developing and rolling out technologies that
help improve added value, including use of AI in combustion
control technology and technology for realizing staffing
reductions through remote control from our Solution Lab (aplant remote monitoring and operational support facility),
we reviewed business workflows and other operations andmade progress computerizing them and utilizing Robotic
Process Automation (RPA).

・Improving productivity by utilizing state-of-the-art
equipment and streamlining work
・Ensuring the skills of craftsmen dedicated to pursuing
the highest possible level of quality are passed down
・Becoming a sustainable, people- andenvironment-friendly production center

Partnerships
Theme

Compliance

Creating new value
through alliances

Theme

Robustly pursuing partnerships with outside companies andother entities in a variety of situations

Increasing the effectiveness ofcompliance and risk management

Improving and enhancing educational programsContinuing and improving risk management activities(Millions of yen)

Principal figures related to our effort to strengthen our management foundation are as follows:

Fiscal year31

P17-20

2022

2023

2018

2019

2020

2021

Capital investment

638

1,564

2,420

3,844

7,100

3,600

R&D costs

960

1,154

1,047

1,006

1,150

2,000

Number of employees (consolidated)

3,619

3,816

3,925

4,145

4,247

ー

Number of employees (non-consolidated)

852

875

894

958

1,002

ー

(Forecast)

Takuma CSR Report 2023

32

Section 01

Business Strategies

Domestic Environment andEnergy BusinessBusiness Strategies
Business Composition

Package boilers

12%

Equipment and systems

6%

Municipal Solid Waste Treatment Plants

Overseas
environment
and energy

Takuma’s business domain consists offour segments: Domestic and Overseas
Environment and Energy Businesses, a
Package Boiler Business, and an Equipment
and Systems Business. The Domestic
Environment and Energy Business accounts
for about 80% of total net sales. While thebreakdown of products and services in ourDomestic Environment and Energy Businessfluctuates from year to year with the EPC
project mix, municipal solid waste treatment
plants generally account for about 50% ofsales; energy plants, about 20%; and water
treatment plants and other products andservices, about 10%.

1%

1

Municipal solid
waste treatment plants(EPC)

Water treatment
plants / otherFiscal year ended
March 2023

8%

Since delivering Japan’s first 24-hour operating waste incineration plant in 1963, Takuma has delivered more than 370 waste
incineration plants, the most of any domestic manufacturer. In addition to supplying products and services that meet regional
needs based on the technology and expertise that we have accumulated through a long series of improvements across morethan half a century, we have been working to further increase the value we provide by incorporating leading-edge technologies
like Artificial Intelligence (AI) and the Internet of Things (IoT).

Net sales
JPY

142.6 billion

Energy plants

24%

Municipal solid waste
treatment plants(after-sales service)29%

Domestic
environment
and energy

81%

Business Model (Domestic Environment and Energy Business)
Plant engineering, procurement, and construction (EPC) and after-sales service (operational management,
maintenance, O&M, etc.) are our primary sources of revenue.
Completion

About 2 to 5 years

Business model
Relationship between
backlog and net sales

33

After-sales service

Encompasses plant engineering,procurement of the necessary
equipment, and site construction
and commissioning

・Sales are posted as the project progresses
・Posted sales tend to become concentrated
during the latter stages of the project, whenconstruction at the site progresses

About 20 to 30 years

Encompasses plant operational management, maintenance, and renovation work
Comprehensive O&M contracts include operational management and maintenance

DBO business (simultaneous EPC and O&M orders)

Net
sales

Backlog

EPC
O&M

Recurring revenue model・Sales from ordinary maintenance and renovation work are posted uponcompletion or according to progress・Sales from operational management (primarily from one to several years) areposted across the contract term
・In O&M projects, an order for the total amount is posted at the time of thecontract, and sales are posted across the business term once operation starts

Business overview and strengths

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

20%

EPC

Growth Strategies

Principle products
Waste incineration plants, biogas recovery plants, recycling plants, etc.
*Primary equipment improvement: Large-scale modification work to make effective use of existing municipal solid waste treatment plants bymaintaining and improving their performance and extending their service life.

2

Market environment

Of Japan’s approximately 1,000 operational waste incineration plants (municipal solid waste treatment plants), which together
have a daily treatment capacity of about 170,000 tons, about 60% have been operating for at least 20 years, highlighting theextent to which equipment aging is a serious issue as well as the resulting outlook for replacement and service life extension
demand in the near term.
Use of O&M arrangements, which comprise a comprehensive contract for facility operation management and maintenance,
and DBO arrangements, which comprise orders for both facility construction and O&M, is growing from the standpoint oftaking advantage of private-sector expertise. At the same time, facilities are expected to provide functionality that creates
multifaceted value for their region, for example by serving as regional disaster prevention facilities or energy centers, rather
than simply treating waste.
Moreover, as society works to realize carbon neutrality by 2050, demand for Carbon Capture, Utilization, and Storage (CCUS) is
expected to grow in the medium and long term, augmenting a trend that is also supported by adoption of increasingly advanced
use of power and heat from waste and combined systems that pair incineration with technologies like methane fermentation.

3

Initiatives

We work continually to capture orders by offering proposals that meet a diversifying range of customer and community needs,
and during FY2022 we earned orders for one BTO project (an approach that involves a contract for facility construction andoperation, in the same manner as DBO projects), one primary equipment improvement project, and one long-term (meaning acontract term of 10 or more years) O&M project. The BTO project involves the construction and operation of four facilities–anincineration facility, a recycling facility, a sludge recycling and treatment center, and a biogas recovery facility–at the same site.
The combined system used by the incineration and biogas recovery facilities, which lies at the heart of the project, can recoverenergy much more efficiently than a standalone stoker-type incinerator, and the project marks Takuma’s fourth order for such asystem. In addition to starting long-term (22 years) operation of a new facility, we are steadily expanding our recurring revenue
model business by proposing optimal solutions that meet customers’ respective needs.

Takuma CSR Report 2023

34

Section 01

Business Strategies

Energy Plants

Water Treatment Plants

1

1

Business overview and strengths

Growth Strategies

Business overview and strengths

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

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

Since its founding in 1938, Takuma has delivered more than 3,200 boilers, both in Japan and abroad. Drawing on proprietarycombustion technologies and heat recovery technologies that we have improved and evolved together with customers overthe course of that long history, we are helping customers and society reduce and eliminate carbon dependency by supplying
plants that recover energy from a variety of biomass resources and non-fossil fuels, including wood, poultry manure, and RPF.

Since entering the water treatment field in 1962, we have accumulated technology and expertise by supplying water treatment
plants and sludge treatment plants in a variety of fields, including sewage, human waste, and industrial wastewater. In recent
years, we have been particularly focused on the sewage treatment field, and we are helping resolve customers’ issues withunique technologies like an energy-saving and energy-creating sludge-fueled power system featuring low emissions of thegreenhouse gas N 2O and moving-bed sand filtration systems (Uniflow Sand Filter), of which we have delivered about 2,800
units since 1979.

Principle products

2

Biomass power and heat utilization plants, RPF power and heat utilization plants, industrial waste
treatment plants, etc.

Market environment

Demand for biomass power plants has grown rapidly since the start of the FIT program, which provides for fixed-price purchasesof renewable energy, and Takuma, which has long engineered and constructed biomass boilers, has delivered more than 50
biomass power and heat utilization plants, including facilities not eligible for the FIT program, since 2014, when it delivered its
first FIT-eligible unit. Today, changes to the FIT program and other factors are driving a shift in demand to small and medium-sizebiomass power and heat utilization plants to supply power for local use and to serve as locally produced, locally consumed
energy sources.
Additionally, many industrial boilers that use fossil fuels such as coal and heavy fuel oil, which are common in factory applications,are due to be updated, and we expect that the level of need for conversions to non-fossil fuels such as biomass and RPF will growas society works to reduce and eliminate dependence on carbon.

3

Initiatives

We are working to steadily capture orders for biomass power plants, especially the small and medium-size facilities that
represent a key Takuma strength (with power output on the order of 2 to 10 MW), and during FY2022 we earned orders for six
new biomass power plants. In addition to securing an order for an industrial waste treatment plant, we offered proposals forsolutions targeting the ever-growing number of plants we have delivered, including precisely targeted maintenance service,energy savings, power output enhancements, improvements in equipment functionality, and service life extensions. In thisway, we are helping customers both resolve issues and reduce carbon dependency while steadily growing our recurring
revenue model businesses.
We are working to apply and evaluate use of absorbing liquid with flue gas from plants with the ultimate goal of commercializing
the approach based on a CCUS technology study that used a biomass power plant as a model, and we are actively moving
forward with studies and research geared towards future decarbonization and resource and environmental conservation, forexample through effective use of biomass combustion ash.

Principle products

2

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

Market environment

There are some 2,200 sewage treatment plants in Japan, and those facilities are aging, with about 90% having been operating
for at least 15 years.
As we work to realize a decarbonized society, demand for the ability to reduce emissions of greenhouse gases from sewage
treatment and to utilize sewage sludge, a type of biomass, as renewable energy is growing.
At the same time, utilization of private-sector structures such as Public Private Partnerships (PPPs) and Private Finance Initiatives(PFIs) is expected to continue to grow due to the challenging business environment in which local governments’ sewage services
operate.

3

Initiatives

We have been offering customers equipment update proposals that take advantage of the features of the high-speed sandfiltration systems we have developed, and during FY2022, we received multiple orders. These systems, which deliver two to
three times the filtration capacity of past designs, feature a compact, space-saving design, making it possible to reduce thenumber of basins that must be installed as well as the time required for construction compared to the alternative of replacing
existing fixed-bed sand filtration systems.
With regard to sewage sludge incineration plants equipped with power generation equipment, our step grate stoker typesewage sludge incineration and power generation system received two awards, including the Agency for Natural Resources
and Energy Commissioner’s Award at the New Energy Foundation’s FY2022 New Energy Awards. The system, which cangenerate power while incinerating sewage sludge without using auxiliary fuel, which has been an issue with conventional
designs, won praise for realizing energy savings, creating energy, and reducing greenhouse gas emissions. We will continue
to help reduce greenhouse gas emissions in sewage treatment by working continually to secure orders.

We will continue to contribute to increased adoption of renewable energy and efforts to reduce and eliminate carbon
dependency in customers’ business activities through increased deployment of power and heat utilization plants that use
biomass and non-fossil fuels in response to plans and proposals that precisely assess customers’ issues and needs.

35

Takuma CSR Report 2023

36

Section 01

Business Strategies

Overseas Environment andEnergy Business

Power Retail Business
1

Business overview and strengths

Group company Takuma Energy Co., Ltd., operates a power retail business using primarily power generated by municipal
solid waste treatment plants and biomass power plants delivered by Takuma.
The company was established in August 2015 to offer services that increase the added value of plants delivered by Takuma
through the procurement and supply of power. Takuma Energy is taking advantage of its relationships with customers and groupcompanies to contribute to the adoption of regional renewable energy, for example by operating a local power production/
consumption business by supplying power generated at municipal solid waste treatment plants and biomass power plants topublic facilities and other sites in the surrounding community, a service that it currently offers in eight communities.

2

Market environment

Demand for decentralized energy and local production and consumption of power is rising from the standpoint of considerations
such as ensuring a supply of energy in times of emergency, efficiently utilizing energy, and revitalizing local communities. Againstthat backdrop, we expect the importance of power and energy services in the Group’s business domains to grow in the future, forexample in development of the Regional Circular and Ecological Sphere (Regional CES) for waste treatment and regionally utilized
power supplies in the FIT program.
Additionally, the level of need for renewable energy and CO 2-free power that have environmental value is growing from theperspective of reducing and eliminating dependence on carbon in business activities. The market is expected to grow further
as society works to realize carbon neutrality by 2050.

3

Growth Strategies

Initiatives

In projects involving the local production and consumption of power, we began supplying power (in January 2023) to public
facilities and other users in the city of Kurume, Fukuoka Prefecture. We also began self-consignment using surplus power froma municipal solid waste power generation facility in January 2023 in the city of Imabari, Ehime Prefecture, where we began
supplying power in April 2022, in a first for the Shikoku region. By offering agent service for self-consignment, Takuma EnergyCo., Ltd., is contributing to the development of schemes for more direct local production and consumption of power and to thestabilization of power costs.

Overseas Businesses
1

Business overview and strengths

We supply construction and maintenance services for biomass power plants and Energy from Waste plants with a focus on
Thailand and Taiwan, where we have local subsidiaries.
Since delivering a bagasse-fired boiler (bagasse: the residual material left after pressing sugarcane) to a customer in Taiwan in
1949, we have delivered more than 380 biomass-fired boilers to overseas customers, primarily in Southeast Asia. We have alsodelivered about 120 boilers, primarily to sugar refineries in Thailand making a significant contribution to the development of thecountry’s sugar industry.
We have also delivered a total of 16 waste treatment plants to customers in Taiwan, China, South Korea, and the U.K. sincedelivering our first such plant overseas in the U.S. in 1986.
Principle products

2

Biomass power plants, Energy from waste plants

Market environment

Although a certain level of demand is expected to continue for bagasse-fueled biomass power plants in Thailand, the businessenvironment remains characterized by intense competition with Indian and Chinese manufacturers. At the same time, the Thaigovernment has announced a policy of promoting biomass power generation, and demand for biomass fuels other than bagasse
is expected to grow in the future.
On the other hand, Energy from Waste projects in the emerging nations of Southeast Asia are often derailed for reasons such as alack of programs and standards related to waste treatment and insufficient government funding, and a stable market has not yet
developed. Nevertheless, the level of need for Energy from Waste plants is growing due to population growth and urbanization,
and we expect the sector to evolve into a growth market over the medium and long term.

In addition, the company began supplying 100% effectively renewable energy to Takuma’s Head Office and Harima Factory in
April 2022, reducing CO2 emissions at the two sites by about 80%.

3

In addition to continuing to contribute to measures to address climate change through the supply of renewable energy-derived,
CO2-free power, we will help resolve regional issues, for example by proposing local power production and consumption
schemes that have been custom-tailored for specific communities.

Following an order for an equipment replacement project at an Energy from Waste plant in Taiwan received in the last fiscal year,
we secured orders for a waste treatment plant in Vietnam and energy plants in Thailand during FY2022.

Initiatives

Demand for equipment replacement and service life extensions is rising in Taiwan as waste treatment plants built from the late1980s to the 2000s age. Also, demand for biomass power plants in Thailand is expected to remain strong going forward as theneed for new biomass fuels other than bagasse is growing.
In addition to working to lower costs, for example by expanding overseas procurement, we will work to increase added value
and differentiate ourselves from our competitors by accommodating new biomass fuels and enhancing maintenance services
offered through our local subsidiary in Thailand as we continue to strive to earn orders with a focus on Thailand and Taiwan.
We will continue to put in place structures to help us secure orders, including through partnerships with local companies, as
we look to tap future demand.

37

Takuma CSR Report 2023

38

Section 01

Business Strategies

Package Boiler Business

Equipment and Systems Business

Package Boiler Business

Equipment and Systems

1

1Business overview and strengths

Group company Nippon Thermoener Co., Ltd., manufactures, sells, and maintains general-purpose boilers in addition to
designing and building related heat source equipment and systems for various types of manufacturing plants as well as hotels,
hospitals, commercial buildings, and other facilities.
Over the many years since its establishment in 1961, Nippon Thermoener Co., Ltd., has supported consumer lifestyles as wellas industry by accumulating extensive experience in an array of package boilers, which are used in a variety of industries andapplications. In an effort to accommodate the changing times and environment as a manufacturer specializing in heat source
equipment, the company meets a diverse range of customer needs by developing new heat source systems such as hybrid hot
water systems based on the technological capabilities and expertise it has accumulated over its long history.
Principle products

2

Once-through boilers (Equos), vacuum-type hot water heaters (Vacotin Heater), heat-transfer oil boilers(Thermoheater), smoke tube boilers (RE Boiler), hybrid hot water systems, etc.

Market environment

Although the domestic general-purpose boiler market has matured and will shrink over the medium- and long-term, we expect
demand for equipment replacement and related services to continue in the near term due to the large size of the installed base.
Additionally, demand for energy-saving boilers is expected to increase overseas, particularly in emerging nations. We expect
efforts to gain additional energy savings and efficiency gains from boilers as part of the larger drive to reduce and eliminate
carbon dependency to accelerate and the market to shift to heat-source systems that use non-fossil fuels over the long term.

3

Initiatives

FY2022 brought a recovery in equipment availability and new-equipment demand, which had suffered as a result of the COVID-19
pandemic. Going forward, we will work to maintain and expand the scale of orders earned in the domestic market by continuing
to provide a diverse line of products and by proposing systems that have been optimized to meet customers’ needs. In addition
to supporting both consumer lifestyles and industry by working to enlarge our overseas business, particularly in Southeast Asia,
where our Thai subsidiary operates, we will contribute to reducing greenhouse gas emissions through adoption of high-efficiency,
energy-saving systems.
Moreover, we will strive to pioneer new heat source equipment markets based on our vision for a decarbonized society bysupplying highly efficient systems that yield greater energy savings, for example hybrid hot-water systems that pair a heat pumpwith a vacuum-type hot water heater, and new heat-source systems that utilize non-fossil fuels, for example wood chip-fueledbiomass boilers and vacuum-type hot water heaters that use hydrogen as fuel, which we announced in April 2023.

Growth Strategies

Business overview and strengths

Group company Sunplant Co., Ltd., designs and installs a range of building equipment, including air-conditioning, water,
wastewater, and hygienic, and firefighting systems, while group company Dan-Takuma Co.,Ltd. supplies and provides service
for clean system-related equipment and devices that provide a suitable environment for semiconductor and electronic device
manufacturing equipment.
Sunplant, which operates a building equipment business, was established as a boiler installation company in 1941. After
entering the equipment construction business in 1965, the company began offering a variety of building equipment for
use in education and research facilities, healthcare and social welfare facilities, commercial and cultural facilities, plants,
railroad facilities, and other sites. In this way, it has supplied optimal environments that are custom-made to suit a variety of
applications and requirements based on the technology and expertise it has accumulated over many years.
Since its establishment in 1969, Dan-Takuma, which supplies equipment to the semiconductor industry, has consistently
contributed to the development of the semiconductor manufacturing industry over more than half a century by drawing on
its extensive track record and accumulated experience to build close customer relationships and accommodate realistic
customer wishes from the customer’s perspective, with a focus on the semiconductor and electronic device industries.
Principle products and services

2

Building equipment installation, chemical filters, magnetically shielded chamber equipment,
washing systems, AMC analysis and monitoring systems, etc.

Market environment

Private-sector investment, which had fallen off due to the COVID-19 pandemic, is recovering, and robust construction demand,
including for replacement and repair of aging public facilities and the construction of new healthcare and social welfare facilities,
is expected to continue over the medium- and long-term.
While observers have noted that the semiconductor market peaked and entered a plateau period after the prosperity lasted
for several years, demand in the manufacturing equipment sector is expected to remain steady thanks to policy support for
new-plant construction and corporate relocation in various countries seeking economic security in the face of trade friction
between the U.S. and China and the decoupling of global supply chains, ongoing demand for on-vehicle power semiconductors,
and other factors.

3

Initiatives

In the building equipment business, we will work to further strengthen our sales and installation capabilities by securing and training
human resources, and we will strive to achieve steady growth in the scale of orders received by creating optimal environments thatare custom-made to suit a variety of applications and requirements.
To restore the sustained growth of our business in the semiconductor and electronic device equipment sector in a short periodof time, we will look to cushion the impact of changes in the external environment by realizing increased business opportunities
through strategic sales measures and developing and strengthening the internal platform functions that underpin our businessexecution. In addition, we will strive to make an even broader contribution to society by continuing to play an essential role in the
manufacturing segment of that industry, developing alongside our customers, and participating constructively in industry.

GTL-300ZE Vacotin Heater(zero-emission, hydrogen-fired
vacuum-type hot water heater)

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BSU-1200D wood chip-fired biomass once-through boiler

Takuma CSR Report 2023

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Section 01

Our Achievements

Main Recent Projects

Growth Strategies

Energy Plants

This section introduces major projects delivered by Takuma during FY2022 in theDomestic Environment and Energy Business.

Municipal Solid Waste Treatment Plants

Yufutsu Energy Center, LLC
Project nameLocation
Capacity

New Construction

Suminoe Plant,
Osaka Waste Management Authority

Project name

Osaka city・Yao city・Matsubara city
environment facilities association
Suminoe Plant Update construction and Operation Project

Location

Osaka Prefecture

Capacity

400 tons per day (200 tons per 24 hours × 2 units)
Power output: 11,300 kW

Primary Equipment Improvements

Ota Incineration Plant
No. 1 Plant

Project nameLocation
Capacity41

Equipment Replacement Project for
Resumption of Ota Incineration
Plant No. 1 Plant Operation
Tokyo Metropolis
600 tons per day(200 tons per 24 hours × 3 units)
Power output: 9,000 kW

Yufutsu Biomass Power Plant No. 1 Generation
Equipment Installation Project
Hokkaido Prefecture

Project nameLocation

Fuel: Wood fuelSteam conditions (regular operation):
271 tons per hour × 6.0 MPaG × 480°C
Power output: 74,950 kW

Capacity

Wood Biomass Power Plant Design, Procurement,
and Commissioning Project
Hiroshima Prefecture
Fuel: Wood fuelSteam conditions (regular operation):
42.0 tons per hour × 5.9 MPaG × 480°C
Power output: 9,990 kW

New Construction

Kahoku District
Clean Center

Project nameLocation
Capacity

Kahoku District Area Administrative Association
Energy Recovery Waste Treatment Facility Construction Project
Ishikawa Prefecture
Energy from waste facility: 98 tons (49 tons per 24 hours × 2 units)
Indirect Heating Sludge Dryer: 30 tons per 24 hours
Power output: 1,700 kW

Primary Equipment Improvements

Fujimi
Environmental Center

Project name

Gohara Plant, Chugoku Lumber Co., Ltd.

Fujimi Environmental Center
Incineration Facility Primary
Equipment Improvement Project

Location

Saitama Prefecture

Capacity

180 tons per day(90 tons per 24 hours × 2 units)

Primary Equipment Improvements

Dogo
Clean Center

Project name

Dogo Clean Center Primary
Equipment Improvement Project

Location

Shimane Prefecture

Capacity

25 tons per day(12.5 tons per 8 hours × 2 units）

Amagasaki Mill, Rengo Co., Ltd.
Project name

F Bit Communications Corp.

Biomass Incineration Equipment Installation Project

Project nameLocation

Hyogo Prefecture

Location

Capacity

Treated waste: Paper manufacturing waste
Incineration capacity: 95 tons per day

Capacity

SGET Toki Biomass G.K.
Biomass Power Plant
Project nameConstruction Project
Location
Capacity

Gifu Prefecture
Fuel: Wood fuelSteam conditions (regular operation):
29.0 tons per hour × 6.0 MPaG × 480°C
Power output: 7,100 kW

Wood Biomass Power Generation Equipment/Plant Design,
Procurement, and Commissioning Project
Kochi Prefecture
Fuel: Wood fuelSteam conditions (regular operation):11.1 tons per hour × 4.2 MPaG × 405°C
Power output: 1,990 kW

Hirata Bioenergy GK
Wood Biomass Power Generation
Project name
Equipment/Plant Design,
Procurement, andCommissioning Project
Location
Capacity

Fukushima Prefecture
Fuel: Wood fuelSteam conditions (regular operation):11.1 tons per hour × 4.2 MPaG × 405°C
Power output: 1,990 kW

Hirata Bioenergy GK(No.2 Power Plant)
Project nameLocation
Capacity

Wood Biomass Power Generation
Equipment/Plant Design,
Procurement, andCommissioning Project
Fukushima Prefecture
Fuel: Wood fuelSteam conditions (regular operation):11.1 tons per hour × 4.2 MPaG × 405°C
Power output: 1,990 kW

Takuma CSR Report 2023

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A new biomass
power plant,
one of the largest
in JapanYufutsu Biomass Power Plant was established by Nippon Paper
Industries Co., Ltd., which has carried out its businesses utilizing
wood as a renewable resource, under the slogan, “Shaping thefuture with trees”, and Sojitz Corporation, which has accumulated
expertise through domestic and international power generation andforestry resource businesses.
As one of Japan’s largest biomass-fired single-fuel facilities, the plant
supplies the electricity needed to power people’s lives while helping
prevent global warming.

Power plant overview
Customer: Yufutsu Energy Center, LLC
Power output: 74,950 kW

Feature02

43

Yufutsu Biomass
Power Plant

Fuel: Wood chips, palm kernel shells (PKS), Japan-sourced
unutilized wood chips
Design and construction: Takuma and Penta-Ocean Construction Special
Construction Joint Venture
Project dates: March 29, 2019, to January 16, 2023

Takuma CSR Report 2023

44

Feature

02

Yufutsu Biomass Power Plant

Promoting forestry and creating jobs throughthe effective use of unutilized materials

A facility for supplying clean energy tomore consumers
The combustion system used by the plant includes one of the world’s largest traveling stokers.
Traveling stokers, one of Takuma’s flagship technologies, anchor a combustion method that is characterized by
an ability to accommodate fuel with a broad range of calorific values, moisture content, and shapes. It allows
plants which, like the Yufutsu facility, utilize fuels that have various properties to take maximum advantage ofeach fuel type’s energy.
Lower parasitic load* compared to other combustion methods make it possible to efficiently deliver clean,renewable energy generated from biomass fuel to more people, helping reduce CO 2 emissions.
1*1 Parasitic load: The energy necessary to operate the plant’s systems and equipment.

Creating clean, renewable energy to support people’s lives*2 while safeguarding
the local forest environment and contributing to regional revitalization bypromoting forestry and creating jobs
Experts believe Japan produces about 9 million tons of unutilized
wood material in the form of thinned timber and timber left onforestland each year. About 6 million tons of that material is left
on the forest floor due to the enormous cost of collection andtransportation*3. Unutilized material left in forests has long been
seen as a problematic cause of destruction of the woodlandenvironment because the methane gas it gives off as it rots canadversely affect forest ecosystems and because it can cause
forest fires.
By treating unutilized biomass material in Hokkaido as an importantregional resource and using it as a source of renewable energy,
Yufutsu Biomass Power Plant is giving such material a role to playwhile revitalizing forestry and local industry in the region.

Traveling stoker

Turbine and generator

Central control room

Largest construction to date
Construction of the plant, which was completed on a site of about 70,000 m 2 adjacent to land owned by Nippon
Paper Industries Co., Ltd. in the city of Tomakomai, Hokkaido, began in 2021.
The undertaking, which was Takuma’s largest biomass power plant construction project to date, imposed various
challenges, including restrictions resulting from the COVID-19 pandemic, but a total of 109,615 workers came
together to complete the facility, which was delivered to the customer on time as specified by the initial plan.

At the start of construction(February 2021)

During boiler assembly(August 2021)

During water pressure testing(April 2022)

Message from the engineering coordinator

Wood chips are produced by runningtimber through a wood chipper. Since
the wood chips are made with low-quality logs which are poorly suited
to use in the production of paper, theprocess contributes to the effective
utilization of resources.

■ PKS (Palm Kernel Shell)

Palm kernel shells are left over after
palm seeds are pressed to extract
palm oil. The shells are at tracting
at tention as a source of biomassenergy due to their low moisture
content and high calorific value.

■ Unutilized wood chips in Japan

These wood chips are produced fromthinned timber that is not large enoughto be used in the production of lumber
along with branches, tree roots, andother materials left over when trees
are harvested. There is a need to
put these materials to good use inorder to revitalize Japan’s forestland, forestry industry, andcommunities in mountainous areas.

Message from the customer
We moved forward with the construction project of Yufutsu Biomass
Power Plant with the cooperation of Takuma over a six-year period fromplanning to completion. These six years encompassed a number ofsignificant changes in the external environment, including the COVID-19
pandemic and a worldwide semiconductor shortage, but Takuma
completed the project on time while dealing with problems that were
unforeseen at the outset in a timely and sincere manner. Moreover,
Takuma exhibited an understanding of the operational technologies we
had accumulated to that point, and we believe the company achieved
an even higher level of technological sophistication by augmenting theirbasic specifications with those technologies, particularly with regard
to central monitoring of site instruments in the central control room andremote operation.
In addition to leveraging the operational technologies cultivated with us
in the future development of Takuma technologies, we look forward to
Takuma’s continued guidance and support in maintenance as we work
to operate Yufutsu Biomass Power Plant in a safe and stable manner.

Teruhiko Oosaki

Deputy General Manager
Shiraoi Mill - Power Dept
Power Generation Sec,
Yufutsu Manager
Shiraoi Mill - Plant Engineering
Dept Construction
Project Manager,
Yufutsu Biomass Powerplant.
NIPPON PAPER
INDUSTRIES Co., Ltd.

Takashi Sasama

Senior Manager
Energy Business Department
Energy Business Div.
NIPPON PAPER
INDUSTRIES Co., Ltd.

Message from the sales coordinator

This biomass power plant uses a high-efficiency traveling stoker to burn wood chips and PKS andgenerate 74,950 kW of power, one of the highest capacities of a facility of its kind in Japan. Even as
it began, the long-term construction project was affected by the unforeseen COVID-19 pandemic;
however, we were able to deliver it without incident and on time in January 2023 as originally planned,
despite having had to work in the midst of a state of emergency. That achievement was the resultof the customer, vendors, and other stakeholders working closely together. I would like to take thisopportunity to express my deep gratitude.
I pray that Yufutsu Biomass Power Plant will contribute to the stable supply of regional power long into
the future.

Yuzuru Nakae

Assistant General Manager,
Section 1, Energy Engineering Dept. 2, Takuma Co., Ltd.

45

At completion(January 2023)*2 The plant can supply enough electricity to power 160,000 households for one
year. Renewable energy power generated by the plant is sold to Hokkaido ElectricPower Network, Inc.
*3 Estimate based on data from “Annual Report on Forest and Forestry in Japan
Fiscal Year 2020” (Forestry Agency)(https://www.maff.go.jp/e/data/publish/attach/pdf/index-22.pdf).

■ Wood chips

It fills me with deep emotion that we were able to deliver one of the largest biomass-fired single-fuel power
plants in Japan, and that the facility will serve as an environmentally friendly source of power from renewableenergy while promoting local forestry.
Over the course of the six years from planning to completion, we drew on all of Takuma’s resources in theplanning, engineering, and construction of the plant.
I am extremely grateful that we were able to bring the project to completion while enjoying the customer’s
assistance.
Going forward, we will do our best to provide after-sales service so that the plant continues to operate long into
the future.

Kyohei Bunya

Plant-2 Dept., 2nd Sect (Marketing & Sales), Energy Plant Div., Takuma Co., Ltd.

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