Obayashi Corporation - Company Profile, Information, Business Description, History, Background Information on Obayashi Corporation

Shinagawa Intercity Tower B
2-15-2 Konan, Minato-Ku

Company Perspectives

Corporate Stance: Our primary raison d'etre is to improve global standards of living while contributing to the advancement of society and development of the world.In order to do this, we must: 1. Refine our creativity and perceptions; then call on the accumulated technology and wisdom of the company to add new value to the concept of space. 2. Expand our individuality; yet respect human frailties. 3. Stay in harmony with nature; blend in with local societies; and put our hearts into creating a more vibrant, richer culture. Management Stance: First, empathize with your customers. Second, strive to be ahead of the times, to discover and develop new demands. Third, become a vigorous, powerful group. Fourth, make a contribution to society.

History of Obayashi Corporation

Obayashi Corporation is one of Japan's leading construction groups, and is also a leading player on the global construction market, with subsidiaries in the United States, Thailand, Taiwan, China, Indonesia, and elsewhere. Obayashi provides a full range of general contractor services in both the public works and private building sectors, including home building. The company also develops its own range of technologies, and has played a leading role in the development of earthquake-resistant construction techniques. In 2005, for example, the company introduced new technology designed the reduce the impact of vertical earthquakes on building structures by as much as 75 percent. The company is also a leading developer of tunnel building technologies, and is also a major road-builder and bridge-builder. Other company operations include urban planning and architectural services; real estate and property development; environmental and waste services; the manufacture, sale, and leasing of construction machinery and equipment; the manufacture and distribution of construction and building materials, as well as fittings, furniture, and other wood products; building and facility management, maintenance, and security services; and insurance, financing, and related services, among others. Obayashi is quoted on the Tokyo Stock Exchange. The founding Obayashi family remains active in the company's management. In 2005, Obayashi's revenues topped Y140 billion ($13 billion).

Osaka Origins in the 19th Century

Obayashi traced its origins to the 1890s, when Yoshigoro Obayashi won a contract to build a paper mill in Abe, Osaka. The project, one of the largest in Osaka at the time, established Obayashi as an important name in the regional construction market, and led to the founding of the Obayashi Corporation in 1892. Within a decade, Obayashi had begun to develop national ambitions, and at the beginning of the 20th century, the company entered the Tokyo market, opening its office in that city in 1902. The outbreak of war with Russia in 1905 provided the company with a new series of contracts, including an order for 100 barracks and ten field hospitals, which the company completed in just three weeks.

The company emerged as one of the country's leading construction groups in 1911, when it completed Tokyo Station, at the time the largest steel-frame building in Japan. Over the next decades, Obayashi, led by Obayashi's son Yoshiro Obayashi, continued to establish its reputation, building landmarks such as the Sumitomo Building in Osaka and the Merchant Marine Building in Kobe, Japan. When the Kanto Earthquake leveled much of Tokyo in 1923, Obayashi played a prominent role in rebuilding the city. The company later played a prominent role in supporting Japan's military effort during the war with China, and then during World War II. This led Yoshiro Obayashi to turn over the company to his son-in-law in 1946, who then changed his name to Obayashi. Toshiro Obayashi remained at the company's head until his death in the early 2000s.

Toshiro Obayashi led the rebuilding of the company into the 1950s, when it once again began winning contracts for large-scale projects, such as an extension to the Tokyo Railroad Station, and also completed its first hydro-electric dam, the Nukabira Dam. During the 1950s, as well, Obayashi added its first overseas projects. In 1956, for example, the Singapore government tapped Obayashi to complete a major land reclamation project. That project, which ultimately involved transporting more than eight square miles of land, was finally completed in 1984. In 1964, the company entered the Thailand market, opening its first overseas subsidiary. Back at home, Obayashi built the Hotel Empire, considered the first true high-rise building in Japan. In the 1960s, Obayashi also added road-building to its list of projects.

Becoming a Technology Pioneer in 1960

Into the 1960s, Obayashi not only regained its position as one of Japan's leading construction groups, the company also established itself as a major construction technologies developer. In 1961, for example, the company developed its own Wet Screen technology for building concrete walls, based on a method originally developed in France. The company's activities in the road-building sector led to an extension into tunneling, and the company once again displayed its engineering strength with the introduction of its first company-developed tunneling technologies. In 1970, the company also introduced a new lightweight roofing design. The completion of the company's Obayashi Main Office in Osaka functioned as something of a showcase for the group's engineering capabilities, boasting an energy-efficient design and also claiming the distinction of being one of Japan's tallest skyscrapers.

Other major contracts in the 1970s included the construction of both the U.S. and U.S.S.R. embassy buildings in Tokyo. The company also began opening new subsidiaries in the Southeast Asian region through the 1970s. The company also entered the U.S. market, partnering with Oakland, California's James E. Roberts in the mid-1970s. By 1978, Obayashi had acquired a 50 percent stake in Roberts, then full control in 1983. By then, the company had secured its first major U.S. contract, with a bid to build a sewer system for the city of San Francisco, starting in 1979. The company added another major project in 1985 when it completed the Toyota automobile plant in Kentucky. The following year, Obayashi joined the U.S. Civil Engineering Society, placing it in position to build its operations in the country. By 1989, Obayashi had confirmed its interest in the U.S. market, when it acquired E.W. Howell, a major contractor in the midwestern and northern regions of the United States. By then, the company also had completed its first project in mainland China, the renovation of the Shanghai International Airport, starting in 1984.

Obayashi's tunneling expertise in the meantime had made it a major player in that sector in Japan and elsewhere. During the 1980s, for example, the company completed a number of important tunneling projects, including the Seikan Tunnel linking Honshu and northern Hokkaido. The company's bridge-building project of the time also included participation in the North and South Bisan-Seto Bridges. In this way, the company helped complete the linking of Japan's main islands.

The company entered the European market in the 1990s, completing the Nissan Europe headquarters building in Amsterdam in 1991. In that year, the company formed a joint venture with Fluor Daniels of the United States to build a new passenger terminal for the Kansai International Airport. Meanwhile, Obayashi continued to seek new business sectors, such as the building of golf courses, while also developing new reactor containment structures for nuclear power stations. In another technology extension, Obayashi developed a method of cutting reinforced concrete using lasers.

Other Obayashi innovations of the period included the Intellipack air-conditioning system; a cold concrete manufacturing method using liquefied chlorine; a computer-based system for predicting the behavior of cracking in concrete walls; a vertical waste-removal conveyor system for tunneling projects; and carbon fiber-reinforced plastic. The company contributed to the development of underground building structures with the launch of a new "super-rib" construction method, as well as adapting its wet screen concrete techniques for underground construction projects.

International Construction Giant in the 21st Century

During the 1990s, the company expanded its operations onto an international scale as well, completing major projects throughout the Southeast Asian region. The company added a subsidiary in Taiwan in 1991, then entered the German market with a technology exchange agreement with that country's Ed. Zubrin. The company then formed its own German subsidiary, Obayashi Projektbau. By the mid-1990s, the company operated subsidiaries in more than 15 international markets. In England, meanwhile, the company built the Bracken House building in London in 1991.

The group's major overseas civil engineering projects included Bangladesh's Maghna Gunmti Bridge, finished in 1995; two segments of Los Angeles' Metro Rail project; Boston's Central Artery Tunnel, completed in 1996; the Esplanade Bridge, in Singapore, which was completed in 1997; a new land reclamation project in Singapore, at Changi East, the first phase of which was completed in 1997; and the M2 Motorway in New South Wales, Australia, also completed in 1997.

At the same time, Obayashi completed a number of landmark buildings worldwide, such as the BCD Tower in Jakarta, Indonesia, in 1993; the Kewalram Office Building in Kuala Lumpur, Malaysia, in 1994; the SCB building in Bangkok and the Toyota Gateway Plant, also in Thailand, both completed in 1995; the Kitano New York and the Beverly Hills Hotel, also in 1995; the Dalian Senmao Building in Dalian, China, in 1996; a factory for Sanyo Home Appliances in Vietnam in 1997. Toward the end of the decade, the company also became a major contractor for the 2000 Olympic Games in Sydney, winning the contract to build the Stadium Australia, completed in 1999.

In Japan, the company remained a leading player in both civil engineering and architectural sectors, completing projects such as the Maiko Tunnel in Hyogo Prefecture in 1997. In that year, as well, the company completed the massive Tokyo Wan Aqua-Line in Chiba Prefecture. Like many of the company's large-scale projects, the Aqua-Line was carried out as part of a joint venture, in this case with partners Trans-Tokyo Bay Highway Corporation and architects Nikken Sekkei. The company then joined in the construction of the Tokyo Electric Power Co. Thermal Power Station in Chiba City, completed in 1998. Among the company's major architectural projects of the time were the Kikko-san Rinnoji Daigomado Temple in Tochigi Prefecture, completed in 1998; the Suntory Takasago factory in Hyogo Prefecture in 1999; and the Festivalgate amusement and entertainment complex in Osaka in 1997.

Obayashi entered the 2000s strongly, winning contracts to build two segments of Taiwan's high-speed railway, and a contract to build the Namba New Central Area, on the former site of the Osaka baseball stadium, as well as its bid to build a 380,000-square-meter office building as part of the Roppongi 6-Chrome project in Tokyo (one of Japan's largest office building projects). In 2001, Obayashi began construction of a desalinization plant for the Fukuoka Water Supply Authority, which, with a capacity of more than 50,000 cubic meters of fresh water daily, became Japan's largest. The company also continued its tradition of developing innovative building technologies, such as a new system to prevent groundwater contamination, and a new base isolation system offering shock resistance for lightweight buildings.

Into the mid-decade, Obayashi completed a number of other major projects in Japan, such as the Kobe Wing Stadium, the Rappongi Hills Gate Tower, and the NHK Osaka Broadcasting Station and Osaka Museum of History complex. The company also completed a segment of the Singapore Mass Rapid Transport system, and two other Singapore structures, China Square Central and Gallop Green, as well as the Hsin Yi Star Building in Taiwan. By then, Takeo Obayashi had taken over as chairman and CEO of the company, following the death of his father, Toshiro Obayashi.

A slowdown in the Japanese construction market, and in the international construction and civil engineering markets in general, encouraged Obayashi to continue to develop its diversified operations into the mid-2000s. As such, the company launched a new energy services division, winning a contract with the city of Ikeda and the Osaka Prefecture to introduce energy conservation methods at their joint government offices. In support of that effort, the company launched a new energy services subsidiary, Esco, in 2003. The company also stepped up its efforts to boost its operations in the private construction sector in order to reduce its reliance on public works projects. Meanwhile, the company continued to secure a number of major overseas contracts, such as one to build six bridges in Vietnam, as well as a tunnel beneath the Saigon River, in 2004.

Obayashi expanded its U.S. interests again at the end of 2005, when it announced its acquisition of John S. Clark Company, based in North Carolina. That company, which focused on the southeastern region, helped boost Obayashi's presence in the U.S. retail construction market, as well as its position in multi-family construction. With more than Y140 billion ($13 billion) in revenues at the end of 2005, Obayashi remained a major global construction group into the new century.

Principal Subsidiaries

E.W. Howell Co., Inc. (United States); James E. Roberts-Obayashi Corporation (United States); Obayashi (Shanghai) Construction Co., Ltd; Obayashi Construction, Inc. (United States); Obayashi Finance International (Netherlands) B.V.; Obayashi USA, LLC; Oc Real Estate Management LLC (United States); Pt. Jaya Obayashi (Indonesia); Taiwan Obayashi Corporation; Thai Obayashi Corporation Ltd.

Principal Competitors

Sumitomo Corporation; Taisei Corporation; Shimizu Corporation; Mitsui Fudosan Company Ltd.; Takenaka Corporation; Haseko Corporation; Nishimatsu Construction Company Ltd.; Kumagai Gumi Company Ltd.


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