Kajima Overseas Asia (KOA) Celebrates 20th Anniversary

KOA’s Path to Success in Southeast Asia
Tell us about Kajima’s earliest undertakings in Southeast Asia.
Koizumi: Kajima’s involvement in Southeast Asia dates back to the 1960s, when Japan was building dams and river works and doing other infrastructure development in the region as part of war reparations. We started construction of the 29-story Wisma Nusantara Building in Jakarta in 1964, and the high-rise construction technologies that we developed for that project were incorporated into our work on the Kasumigaseki Building, the first high-rise building in Japan.

A shift began to take place in the 1970s as Southeast Asia began modernizing. More and more projects involved such things as shipbuilding docks, land reclamation for coastal industrial zones, and subway systems. At the same time, the region also saw sharply rising demand for large-scale, private-sector buildings, including office buildings, hotels, and manufacturing facilities for Japanese-affiliated companies.

How was KOA established?
Koizumi: The head office back then had decided to establish three offshore affiliates to develop its construction business overseas. We established Kajima U.S.A. Inc. (KUSA) in North America in 1986, then Kajima Europe B.V. in 1987, and next KOA in 1988. We were responding to a big spurt in overseas construction demand that arose quite suddenly in the 1980s after the rapid appreciation of the yen prompted Japanese manufacturers to begin moving aggressively to set up overseas operations. To meet customer needs, we decided to establish a structure that would allow us to act overseas as a local provider of projects, especially design and construction work.

Growing into a leading general contractor
It appears that KOA has become one of Asia’s premier general contractors.
Koizumi: Most of our projects in Thailand, Malaysia, and the Philippines have been to build factories for Japanese-affiliated companies. As we have grown along with our customers, we have built relationships of trust that have generated repeat business.

In Singapore, however, our business has undergone a shift. We have become closely integrated into the local economy here. We now receive orders from local clients for large, first-class construction projects, such as office buildings, hotels, and condominiums. Singapore is going to look a lot different 10 years from now. I’m really looking forward to seeing how the KOA projects will end up defining Singapore’s cityscapes of the future.

Haven’t the development projects you’ve undertaken since the 90s been quite successful?
Koizumi: The Senayan development in Indonesia and the Millennia Singapore development in Singapore have both become local landmarks—so yes, we have been quite successful with those. Plans for further development of the Senayan project are in the works. In Singapore, methods we have developed over the years are now being used to great advantage in three ongoing projects that we are carrying out in cooperation with major local developers.

Overseas construction and development projects involve country risk, so experience and trust are important. The hard work of our predecessors who pioneered the way in Southeast Asia, and the results they achieved, have earned trust for KOA, and we are now enjoying the fruits of their success. Development projects have grown into a major piece of KOA’s business model. Now and in the future, we intend to distinguish ourselves by making the most of our strength as a general contractor and developer.

KOA undertakes reorganization
What is KOA’s current organizational structure?
Koizumi: KOA has roughly 1,600 employees in total. I’ve been working to overhaul our organizational structure since becoming Managing Director in 2004. To exercise integrated control over our organization throughout all of Southeast Asia, it is important that we have transparent management. There has been a strong tendency in our company—perhaps a throwback to the days when Kajima’s business in Southeast Asia was still under the direct management of the head office in Tokyo—to depend heavily on veterans to keep projects moving forward. However, to expect a single person at the top to take responsibility for everything going on at the front lines is asking too much. In Thailand, for example, we always have at least 10 factories under construction at any one time on short-term projects that are completed in less than a year. Unless we establish a system that will enable anyone to come in and perform up to standard, it’s an absolute certainty that our customers’ trust in us is going to suffer. The company has a pressing need to build a transparent managerial regime, and we must do so with an eye to standardizing our practices and facilitating the internal transfer of expertise. This is what I am working on.

I understand that you have adopted three action plans as part of KOA’s medium-term management plan.
Koizumi: There are a number of things we need to do to address issues. Toward that end, we have launched three action plans, namely, the KTMS plan, the KLSS plan, and the KEEP plan [see definitions below]. These action plans are designed to improve our management skills, streamline and standardize our design and construction, and improve how we go about educating our employees. Each of these plans has been compiled into a manual, which we are using as a tool in the effort for organizational reform.

We are working especially hard on construction site management. The problems that typically crop up at different work sites are presented in the manuals, and where we see points that are worthy of horizontal deployment, the Singapore office takes the lead in convening meetings of managers to discuss improvement measures. Striving to set a good example myself, I travel a lot to all the countries in the KOA target market to communicate with front-line staff and find solutions to problems.

Striving for excellence
What is your focus as you lead the company into the future?
Koizumi: I think KOA is moving away from a primary focus on expansion, and into a period when we’ll be focusing on increasing the quality of our existing services. Whether it be construction or development, we need to think outside the box when considering customer needs. Because we are KOA, we need to be providing the highest possible value-added content in the structures we build. We need to do everything we can to build up the “Kajima brand.”

I believe I also have a mission to provide the Kajima head office with feedback from abroad, to communicate the experience and know-how that we have accumulated through our work in different cultures and societies. I want the entire KOA Group to move ahead as one, so that we can be more than just one of Asia’s premier general contractors; we can take it to the next level, and become an excellent company that is one of Asia’s premier enterprises of any kind.