Message from CEO

The management philosophy of our company group is that 'We will be a group who is needed from society anytime by utilizing our people and technologies.' Based on this basic philosophy, the company will promote sustainability and address Sustainable Development Goals through its business activities for the development and maintenance of social infrastructure and the resolution of issues facing local communities and the global environment.

As countermeasures for global warming, which is an increasingly urgent issue, we are working on the following four activities:

1. De-carbonization

2. Promotion to utilize renewable energy

3. Reduction of waste

4. Recycling

With regard to de-carbonization, we are promoting the use of low-carbon materials and de-carbonization with development of our technologies.

Our business activities consume large quantities of cement, which emits large amounts of CO₂ in the manufacturing process. Therefore, we have been researching alternative materials for cement that have the same strength as cement but do not emit as much CO₂ in the manufacturing process, and we have already started to use these at construction sites. We believe that it is our responsibility to deepen our understanding of alternative materials and propose and promote their use in public works projects in the near future.

We also believe that further development is necessary for low-carbon materials and construction work processes by employing low-carbon technologies. We predict that the social situation may change in the near future, where construction contracts will be awarded according to whether the contractor can apply low-carbon technologies.

Regarding the promotion of renewable energy use, we have been generating solar power on our idle land for some time. However, now we need to consider consuming our generated renewable energy at our construction sites.

We continue to implement reduction of waste and recycling in our daily operations. Some of our construction business activities necessarily generate industrial waste requiring disposal. However, we will contribute to the realization of a recycling-oriented society by properly treating and recycling rebar fragments and concrete debris.

It is also important to encourage environmental conservation by making infrastructure durable.

Every time an aged bridge is reconstructed, large amounts of CO₂ are emitted. To prevent this, bridges must be designed for long life. In addition, aged bridges must be maintained or repaired to extend their useful life. Thereby, the emissions of CO₂ and the repair costs are expected to be lower than the construction costs for new bridges. This may also increase effects to the social benefit to road users.

Over the past few years, Japan Bridge Corporation, one of our Oriental Shiraishi Group companies, has focused not only on new bridge construction, but also on bridge repair and reinforcement, and now they are in a position to achieve returns on this investment. The collaboration between Japan Bridge Corporation and Oriental Shiraishi Corporation has been effective in this business field and is achieving more stable sales and profits. As the infrastructure in Japan ages, the need for repair and reinforcement will be increasing greatly, and our Oriental Shiraishi group companies will be able to contribute to this business field even more.

Our current medium-term management plan is 'Never stop walking towards stability and growth for our group.' The key point of this management plan is to aim to achieve 'stability' and 'growth,' which are different aspects of the same objective.

In the current Japanese construction industry, it is very difficult to maintain constant growth every year. Especially, in recent years, as construction projects have been larger and longer, we have undertaken projects that are relatively larger in comparison to our company capacity. When the construction work progresses well, our sales and profits increase but they do not increase during the planning and preparation phases. To equalize such ups and downs in our sales and profit and as possible, the Oriental Shiraishi group companies cooperate with each other. We pursue 'stability' even in the down phase, and aim to achieve 'growth' in the medium and long terms. In this process, we aim to return the profit we promised to our shareholders stably and constantly.

Our forecast of Oriental Shiraishi Group companies for the fiscal year ending March 2020 was JPY 64 billion in sales, JPY 4.5 billion in ordinary income, and JPY 3 billion in net profit. We will achieve these forecasted figures by improving our profit in ongoing construction projects, benefitting from the company merger with Yamaki Industry Corporation, and accumulating fruitful order backlogs for the next financial year, which is the final period of our medium-term management plan. We will continue our efforts to get as close as possible to the results of the previous financial period.

As we consider that the stable return of profits to shareholders is one of our top priorities in our company management, our forecasts of dividend payout ratio and total return ratio for the current financial year are 31.4% and 41.4%, respectively.

We continue to make further efforts to achieve the final year targets of our medium-term management plan, which are sales of JPY 65 billion, ordinary income of JPY 4.8 billion, and profit of JPY 3.2 billion. We will secure this profit to retain resources for investment not only in technology but also in sustainability, including carbon-neutral measures.

In addition, the improvement of productivity is an important factor.

The risk of declining numbers of skilled workers is increasing due to Japan's low birthrate and aging population. Moreover, overtime in the construction industry will also be limited by regulation starting from 2024. In the situation of declines in both the working hours and the number of skilled workers, we must improve our productivity to contribute to infrastructure development and the building of national resilience.

We have our own factories. With these, we will be able to increase our productivity by using the prestressed concrete (PC) method, which pre-fabricates PC members in our factories for assembly at construction sites. We are also developing pneumatic caisson technologies to reduce manpower and have automated operations by improving the capability and performance of machines. Furthermore, we are developing technologies to provide instructions, guidance, and patrols at construction sites remotely via wearable cameras, and work management by using information and communication technology and artificial intelligence, less manpower, and enhancement of functionality.

In terms of diversity and inclusion, we employ several female engineers every year. We try to create a workplace where female engineers can work for a long time through active job rotations to construction sites, factories, design departments, estimating departments, and technical proposal departments by using various working styles, such as work-from-home, as suited for their life stages.

In the future, Oriental Shiraishi Group companies will resolve social issues and develop social infrastructure by using its unique construction methods and refined technologies, protect the nation's land and people's lives, and give prominence to our presence. Please expect that Oriental Shiraishi group companies will continue the pursuit of stability and growth towards the year 2030.