In view of its severe operating environment, Kajima has since fiscal 1999 been implementing a three-year management plan aimed at improving the Company's profitability through the expansion of orders and reduction of costs as well as at enhancing and strengthening the Company's financial position. As the organizational restructuring of Kajima's R&D departments is an important focus of the plan, the Company is continuing to consider means of establishing a more-efficient R&D operating structure through the merger and elimination of units. It is emphasizing the creation of a highly cost-effective R&D system that is able to promote increased orders and profitability.

During fiscal 1999, Kajima established units that horizontally interlink operations in individual technology development fields, and those units are working to integrate the R&D planning, implementation, and evaluation processes with respect to all the Company's R&D activities. In fiscal 2000, Kajima placed emphasis on R&D themes likely to promote order increases and cost reductions as well as themes expected to help increase the Company's presence in such strategic growth fields as environmental protection, structural renewal, and structural life-cycle engineering (LCE). This initiative tightened the focus and increased the efficiency of R&D operations. The number of technology development themes was cut to 226, down 34% from the 343 themes addressed in fiscal 1999. While tightening the focus of its R&D operations, Kajima was able to reduce its R&D expenditures approximately \1.9 billion, to \12.7 billion. This figure corresponds to 1.09% of revenues.

Principal R&D themes during fiscal 2000 included safety-evaluation technologies related to shield tunneling, LCE technologies, renewal technologies for civil engineering structures, waste disposal facility construction technologies, high-durability technologies for structures designed to be used for a century, and free-plan housing technologies for high-rise residences. The Company also actively worked to apply and commercialize its technologies that have been developed to the point of practical applicability, such as new tunnel boring machine (TBM) technologies, automated excavation systems for bedrock caissons, concrete-filled steel tubular (CFT) structures, the New NEOS construction method for composite structures incorporating reinforced concrete pillars together with horizontal steel beam spans, aseismic retrofitting methods for existing reinforced concrete structures, the Air Refrigerant System (AIRS), and a Metackles thermophilic methane fermentation system for the treatment of organic waste.

In February 1999, Kajima undertook the organizational restructuring of the Kajima Technical Research Institute, which handles the bulk of the Company's R&D activities, by shifting certain resources from the Building Engineering Department and the Civil Engineering Department. To expedite the development of strategic technologies, these and other resources were used to create the Environmental Engineering Department, Advanced Technology Department, and an LCE Project Team. The main themes of the new units include composite structure technologies for bridges, design and evaluation systems focused on the durability characteristics of concrete structures, contaminated soil remediation technologies, technologies for the constructive use of by-products of construction and manufacturing operations, environment-friendly revegetation technologies, concrete that is highly durable but light, technologies for improving the noise environment of multiple-dwelling housing structures, technologies for controlling electromagnetic environments, and decision-making support technologies related to countermeasures to earthquakes and other disasters.

The following sections are brief descriptions of representative R&D projects completed during fiscal 2000.

SUBTERRANEAN ENGINEERING SAFETY-EVALUATION TECHNOLOGIES
For creating such urban infrastructure as transportation, communication, water, and sewage systems, shield tunneling is superior to other excavation methods due to its ability to reduce ground subsidence, vibration, and noise. It has thus come into increasingly widespread use for such applications. Kajima has accumulated a variety of shield tunneling know-how―such as that related to high-speed and long-distance tunneling, optimal tunnel-diameter design, and the creation of irregularly shaped or large-diameter tunnels. Drawing on this know-how, the Company is proceeding with the development of the octopus driving method, which enables the underground bifurcation and merging of tunnels without surface excavation.

FREE-PLAN HOUSING TECHNOLOGIES FOR HIGH-
RISE RESIDENCES
Kajima's free-plan housing technology is a system for constructing super-reinforced concrete frame high-rise condominiums that incorporate superwalls, superbeams, and the HiDAM system for reducing vibrations due to earthquakes and wind. These technologies make it possible to concentrate beams and pillars in certain parts of the structure and leave most interior space free of obstructions. As a result, free-plan housing technology allows flexible floor layouts, increases residential functionality, and facilitates large-scale design rearrangements and renovations. This enables the Company to provide housing that households can enjoy over the long term.

SEISMIC VIBRATION CONTROL
Kajima is the top Japanese company with regard to seismic vibration control systems that use leading-edge building structure technologies to reduce buildings' vibration and swaying during earthquakes. One of the Company's recent R&D achievements in this field is the development of HiDAX intelligent structural oil-dampers. The incorporation of HiDAX units in building frameworks is an extremely effective means of reducing the vibration and swaying of ultrahigh-rise buildings. Kajima's earthquake-resistant building structures with HiDAX units, layered rubber materials, and other special components can cut building vibration and swaying by roughly 80%.

BIOTOPES
Rather than additional material wealth, people in industrialized societies are increasingly in need of social infrastructure that promotes mental relaxation and enjoyment of life. Accordingly, there is growing demand for the creation of living spaces that allow people to enjoy contact with the animals, plants, and other elements of a rich natural environment. Aiming to offer a new type of man-made natural space, Kajima is working to develop such biotopes as those centered on fauna and flora and on waterside environments. Proper maintenance is crucial for biotopes that focus on the life cycles of aquatic insects and vegetation, and the Company is working to develop the ideal maintenance methods based on data from tests at its greenification test site.

METACKLES
Japan annually generates approximately 20 million tons of organic garbage, most of which is either incinerated or placed in landfills. Because incinerators emit dioxins and there is little space for landfills in Japan, many entities are pursuing research into methods of usefully using garbage. After a decade of work developing its Metackles thermophilic methane fermentation system for the treatment of organic waste, Kajima has produced a completed Metackles system that includes a system for using methane gas from fermented garbage to fuel a fuel-cell power-generation unit. During summer 2000, plans call for beginning the operation of a Metackles fuel-cell power-generation system able to process six tons of garbage daily.