NIPPON AQUA CO., LTD. NIPPON AQUA
2023
I N T E G R A T E D R E P O R T
"We want to live comfortably." That's all there is to it.
For those of us leading busy lives,
our homes are a precious place where we can relax.
However, there are not many buildings that can provide a comfortable living environment.
Japan,
with its four seasons and drastic temperature differences throughout the year, makes it difficult to maintain an appropriate room temperature.
We are troubled by the heat in summer, the cold in winter, and the humidity during the rainy season.
There are also problems caused by the aging of buildings, such as leaks and mold. These can sometimes affect our health,
posing risks of heatstroke, dehydration, strokes, and heart attacks due to heat shock. Furthermore, the soaring electricity bills due to high energy costs...
The troubles with housing are only increasing.
In this modern age, where the risks threatening our lives,
such as extreme heat, heavy rain, and violent winds due to climate change, are increasing, "we want to feel safe and comfortable in our homes."
To realize this basic desire, what should we do?
"High insulation and airtightness" will solve everything.
The insulation and airtightness performance of domestic housing in Japan is the lowest among developed countries.
Nippon Aqua is confronting this issue.
Houses with high insulation and airtightness protect the interior from harsh nature. They maintain a constant room temperature,
allowing you to spend your summers cool and your winters warm. In contrast to Europe,
where high insulation and airtightness standards have been mandatory for decades, Japan is significantly behind among developed countries.
Finally, energy-saving standards (insulation construction) for new houses and buildings after April 2025 have been made mandatory.
However, these standards are still low compared to the rest of the world. Amidst this, Nippon Aqua is pursuing world-class quality
and proposing high-level insulation materials.
In addition to insulation and airtightness performance,
if ventilation and moisture permeability do not function well, we cannot provide a comfortable environment. In the worst case, it can lead to the generation of mold and house dust.
Nippon Aqua provides a total service related to insulation, airtightness, ventilation, moisture permeability, and waterproofing to create an ideal living environment.
We aim to create a living environment
that is kind to both the people and the planet, and to a sustainable future.
Balancing comfort and energy saving.
Through our business, we aim to realize a sustainable world.
We hope that each person's life will be comfortable and that their lives will be enriched. We hope that everyone around the world will be kinder to the planet.
Nippon Aqua is addressing the challenges faced by people and the planet through its business, with the goal of "protecting the earth as a whole society.
" To create a better future, we will continue to refine our quality and technology, and deliver reliable value to the world.
E S G
Financial Information |
Business Philosophy
Management | Contributing to society | |
by creating a housing environment | ||
philosophy | ||
that is friendly to the people and the Earth | ||
Vision | We exist to reduce total energy demand through innovation in insulation technology, |
prevent global warming, and at the same time, | |
help people lead healthy and comfortable lives. | |
Code of | 1. Provide the best service with customer satisfaction as the first priority. |
2. Create new value in housing. | |
Conduct | 3. Act sensibly as a member of society and as a corporate citizen based on compliance. |
4. Strive daily for the achievement of goals and commit to self-improvement. | |
Credo | 1. We will strive to be fair and just in everything we do. |
2. We will strive to never fail to reward good conduct or | |
let a fault go unpunished in everything we try. | |
CONTENTS
Introduction | |
Sustainable Future and | |
Insulation Materials | 02 |
Part 1 - Value Creation Story | |
Top Message | 07 |
Business Model | 11 |
Value Creation Process | 13 |
Journey of Value Creation | 14 |
Mid-term Management Plan | 17 |
Part 2 - Business Overview | |
Single-family Homes Division | 20 |
Buildings Division | 21 |
Waterproofing Division | 22 |
Other Divisions | 23 |
Part 3 ESG | |
Environmental Initiatives | 25 |
Human Capital and Diversity | 31 |
Governance | 34 |
Part 4 - Financial Information | |
KPI/Financial Highlights | 37 |
Financial Data/ | |
Financial Statements | 38 |
Company Overview/ | |
Stock Information | 40 |
Editorial Policy | 41 |
Part 1 Value Creation Story
Creating Economic and Social Value
Under the Management Philosophy of "Contributing to society by creating a housing environment
that is friendly to the people and the Earth", we promote sustainability management.
Through CSV, we aim to improve sustainable corporate value.
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Seizing the opportunity for further growth. Continuing to create economic
and social value.
Nippon Aqua, which is celebrating its 20th anniversary this year,
is expanding its business to reduce the burden on the global environment. Taking advantage of recent social trends,
we aim to further expand and enhance our corporate value as a company needed by society.
President and Representative Director
Fumitaka Nakamura
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Inthebusinessofpromotingenergyconservation, Weconfrontsocietalissues.
We, Nippon Aqua, have adopted the management philosophy of "Contributing to society by creating a housing environment that is friendly to the people and the Earth". We are a company that conducts everything in-house, from raw material development to construction and recycling, with services related to insulation, airtightness, and waterproofing of single-family homes, buildings, condominiums, and other facilities as our main axis. Established in 2004, we have contributed to energy conservation in homes and buildings.
In recent years, the environment surrounding our business has been changing significantly.For example, the destabilization of the international energy situation due to Russia's invasion of Ukraine, which began in February 2022. Electricity prices have soared in various countries, and they have also risen by about 30% in Japan. In addition, in June of the same year, a law to amend part of the law on improving the energy consumption performance of buildings to contribute to the realization of a decarbonized society was enacted. As a result, all new homes and non-residential buildings are required to comply with energy conservation standards, and from April 2025, it will not be possible to build new homes and buildings that fall below these standards. However, compared to Western countries, these standards are still low, and the reality is that we are lagging behind the world. In each household, interest in energy conservation has increased even more due to the record-breaking heatwave last summer. Furthermore, there is an increasing demand for renovation and rebuilding of concrete buildings. The lifespan of concrete is said to be about 50-60 years, and many
buildings built during the period of high economic growth are aging, causing cracks and leaks.
However, this situation is an opportunity for our company. The need for high insulation and airtightness to improve heating and cooling efficiency, and the need to apply waterproofing treatment in the renovation of aging buildings, have greatly increased the significance of our company's existence. As a result, for the fiscal year ending December 2023, we were able to achieve net sales of 28.341 billion yen (110.4% compared to the previous fiscal year) and an ordinary profit of 2.917 billion yen (123.6% compared to the previous fiscal year). We feel that this is solely due to the support from our stakeholders, mainly shareholders and investors, and the efforts of all our group employees.
Nippon Aqua is the only company in the world with a unique business model.
In the field of insulation materials, we are the only company in the world that consistently handles everything from raw material development to construction and recycling. We develop raw materials at our technical center and not only sell our products nationwide, but also have our internal installation work personnel carry out the construction. Furthermore, we have implemented a "certified contractors system" that meets the technical standards set by our company. We strive to provide services that our customers will be pleased with and to improve the quality of our work during construction. This system allows us to capture what is truly needed on site and utilize them for new product development. In addition to construction sites, one of our major strengths is our ability to quickly develop raw materials to meet the demands of general
contractors and construction companies. In terms of recycling, we own specialized factories in four locations nationwide. We collect excess material generated during construction from sites nationwide and re-manufacture them mainly as insulation materials to be laid in ceilings. We are the only company that has been certified by the National Permit System of the Ministry of the Environment, and we are committed to reducing waste.
Breaking Industry Common Sense and Bringing New Value to the World
The insulation materials handled by Nippon Aqua are known as "spray polyurethane foam". At construction sites, we spray a foam-like urethane onto walls and ceilings. This type of insulation has been used in concrete buildings since the 1950s and 1960s. On the other hand, in wooden houses, a method of laying materials made of glass fibers, called glass wool, has been adopted. Compared to the spray method, gaps are more likely to occur, resulting in a decrease in insulation performance. Despite the fact that spray polyurethane foam is light and highly airtight, I noticed that it was not being used in wooden houses and started developing products for wooden houses in my previous job. As a result of trial and error, I was able to successfully commercialize and sell the product. It was a revolutionary product and was gradually getting on track, but the company did not view it positively because it was not a core business. Furthermore, the quality of the products that could be provided varied from contractor to contractor, and I was struggling every day. Just when I was at my wits' end, the division I was working in was abolished. That's when I decided to start my own business, with the conviction that "this insulation material is needed in the
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world" and the desire to "provide high-quality Spray insulation application".
When we first started, we purchased raw materials from manufacturers in Japan and overseas, and our products expanded not only for wooden houses but also for concrete buildings. However, when quality issues began to arise, we decided to switch to in-house raw material development. We hired several people from major chemical manufacturers and set up a technical center. We were the first to develop a product using a foaming agent called "HFO (Hydrofluoroolefin)" that does not use greenhouse gas-intensive CFCs and has an ozone depletion coefficient of
0. Not only is the quality high, but we also created environmentally friendly insulation materials. After that, we started working on waterproofing materials as a new field. For waterproofing materials, we propose a method of spraying a resin called "polyurea". This method was developed in the United States in the 1980s and was imported to Japan at the same time, but it has not been widely adopted until recently. Instead, asphalt waterproofing and FRP waterproofing, which
involves laying plastic fibers, have become popular. Asphalt waterproofing requires thick pillars to support the weight, and FRP waterproofing is troublesome to repair, both of which have many disadvantages. Our waterproofing material, which can be applied and repaired simply by spraying polyurea resin, is a standard method in the world. Despite this, the adoption rate in Japan is still low. We want to break this status quo and change the industry.
Three Pillars Supporting Our Business
Currently, our company is developing three pillars of business based on the type of construction: the "Single-family Homes Division," the "Buildings Division," and the "Waterproofing Division. "In addition, we are consolidating businesses other than construction into the "Other divisions" to expand our business capacity.
The Single-family Homes Division provides insulation work for single-family homes.
For wooden houses, which account for more than 90% of single-family homes in Japan, we use "AQUA FOAM LITE" or "AQUA FOAM."
For non-wooden houses and houses in cold regions, as well as those requiring higher insulation classes, we use "AQUA FOAM NEO."
The Buildings Division provides insulation work for buildings and apartments made of reinforced concrete (RC), steel-reinforced concrete (SRC), and steel (S), as well as other facilities.
The construction is mainly done with "AQUA FOAM NEO", but due to the increasing need to avoid fire risks at construction sites, the number of constructions using "AQUA MOEN NEO", a non-flammable insulation, is dramatically increasing.
The Waterproofing Division provides waterproofing work for both single-family homes and buildings.
We are gradually expanding to buildings and commercial facilities, starting with balcony construction for single-family homes using "AQUA HAJIKUN."
The Other divisions are engaged in the sale of auxiliary supplies, which are consumables used in construction, the sale of foam urethane foam spraying machines, and the sale of raw materials to non-certified contractors.
We will take on a wide range of challenges to expand our business capacity and enhance our presence as a manufacturer.
Valuing Human Capital for Sustainable Growth
Recently, work style reform and work-life balance have been attracting attention worldwide, but it seems that many companies in our industry are still stuck in the old ways.
In addition, there are numerous challenges, such as the introduction of a cap on overtime work in April 2024 and the aging of construction workers.
Despite these challenges, our company is fully committed to creating a comfortable working environment.
This is undoubtedly thanks to our employees that we are able to create and provide value to our customers and society.
We had introduced a two-day weekend system ahead of the industry, and from January 2023, we have made weekends off. Furthermore, by increasing the salary level, the number of job applications has significantly increased.
Based on the technical intern training system to support the economic development of developing regions, we are actively accepting foreign technical interns and having them work as construction workers.
To ensure that they do not feel lonely or inconvenienced,
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we do not assign them to sales offices alone, but have them live together in company dormitories, and provide detailed support while keeping close contact with supervising organizations.
Of course, we will continue to focus on supporting the active participation of women.
As of the end of 2023, the ratio of female managers in our company is 14%, which is higher than the construction industry average of 6.3% (as of fiscal 2023, according to Teikoku Databank), but we are aiming for 20%.
In sales clerical positions where there are many female employees, role models are emerging one after another through business improvement by introducing IT systems, career path development, and the creation of systems that allow work and home life to be balanced, such as reduced working hours and telework.
As a strategy for sustainable growth, we will further increase our staff, equalize the burden on each individual, and increase the total number of construction projects. To achieve this, we will continue to focus on creating a comfortable working environment for our employees. We aim to grow as an organization that can utilize a wide range of abilities, not only by hiring new graduates, but also by hiring mid-career and foreign employees with an eye on overseas expansion.
Formulating a New Medium-Term Management Plan with an Aggressive Stance
We have formulated a new medium-term management plan with an aggressive stance. In February 2024, we announced a new medium-term management plan. This is a three-year plan from 2024, with a target of 410.2 billion yen in sales and 45.12 billion yen in ordinary profit for the
final fiscal year ending December 2026. The theme is "Establishing Three Stable Pillars". We will strengthen each of the "Single-family Homes Division", "Buildings Division", and "Waterproofing Division". In the Single-family Homes Division, we will focus on increasing market share value and we will acquire market shares from competing spray polyurethane foam contractors. In addition, with the expansion of high insulation and high airtightness needs, we will also promote switching from other insulation materials, propose higher grades, and increase sales unit price through bundle sales. In the Buildings Division, we aim to increase the total area sprayed by about 20% each year. We will continue to differentiate ourselves with the non-flammable insulation "AQUA MOEN NEO", which is doing well. In February 2023, we launched a new fireproof coating "AQUA BARRIER" that exhibits fire resistance when applied to insulation materials. We will expand our product lineup and meet various construction needs. In the Waterproofing Division, we will increase the awareness of polyurea resin spray waterproofing and our product "AQUA HAJIKUN". The market size in 2022 is about 600 billion yen, and our share is only 0.1%. The quality of our products is certain, so we need to first make it an option for our customers. The recent topic is the order for the renovation of the headquarters factory of a leading electrical manufacturer in Japan, but we will continue to aim for an increase in the number of constructions through cooperation with the Single-family Homes Division and strengthening alliances with waterproofing contractors. Furthermore, we will focus on expanding our business areas. Mainly in the Waterproofing Division, we will increase the number of B to C company cases in the future, increase our recognition, and improve our corporate brand. We will also strengthen raw material sales and enhance our presence as a domestic manufacturer. We
will also gradually work on overseas expansion. Since 2020, we have been selling raw materials for foam urethane foam to Korea, but we plan to expand to Southeast Asia in the future. In Southeast Asian countries, insulation materials are not popular because there is no need for cold protection in winter. However, interest in insulation materials is increasing for energy saving in air conditioning, and we believe it is a market with potential. The policy of cash allocation is to return 50% to shareholders as dividends and use the rest for growth investment. Specifically, we will open one or two large logistics bases a year to make nationwide expansion more active. In addition, we are considering expanding human investment, organizing construction teams, and M&A for strengthening the Waterproofing Division. We will realize and distribute appropriate profits and aim for sustainable growth. We, Nippon Aqua, will celebrate our 20th anniversary this year. Under our management philosophy of "contributing to society by creating a living environment that is friendly to people and the earth", we will continue to provide value to society and strive to meet your expectations. We look forward to your continued support.
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Nippon Aqua Co. Ltd. published this content on 24 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 April 2024 08:59:09 UTC.
