Kajima - Company History

From the first Western-style building to a railway specialist

In 1840 Kajima Iwakichi (鹿島岩吉) opened a shop at Kyobashi in Edo under the trade name Daiwa and set up on his own as a master carpenter[1]. His custom ran to work on the mansions of feudal lords, beginning with the residence of Matsudaira Etchu-no-kami[2], so that two kinds of demand — contract work on townhouses and building work on daimyo estates — were taken in on the same ground. After Japan opened to foreign trade the firm followed the opening of the port of Yokohama into that city, and in 1860 built the premises of the British trading house Jardine Matheson, known as Ei-ichiban-kan (英一番館), the “No. 1 British house.”[3] It was among the earliest examples of Western-style architecture in Japan[4], and through contract work for foreign trading houses the firm learned Western methods — brickwork, Western roof trusses — in the field[5]. In the Meiji era the trade name was changed to Kajima-gata[6], and under the second-generation Kajima Iwazo (鹿島岩蔵)[7] the record in Western-style building spread across the country: the Mori family’s Western residence at Gotenyama in Shinagawa, the Horaisha building in Shimbashi, a paper mill in Kobe, and the Okayama prefectural offices[8].

In 1880 Iwazo dissolved Kajima-gata, with all its standing in Western-style building[9], and founded Kajima-gumi in its place as a contractor specialising in railway work[10]. It was a switch of trade that narrowed the business onto the railway, the emblem of Japan’s westernisation[11]. The first job was the Yanagase tunnel on the government railway[12]; from there the firm built government and private railways all over the country, among them what is now the Tohoku Main Line for the Nippon Railway Company and the government-built line that is now the Shin’etsu Line[13], and after the First Sino-Japanese War it moved into railway construction in Korea, Manchuria and Taiwan[14]. Broken down by type of work, orders in the Meiji and Taisho periods ran to 67% railways and 14% hydroelectric power[15] — the two fields together accounting for more than 80% of the volume[16]. Growing in step with the nationwide extension of the railway business, Kajima-gumi came to be called “Kajima of the railways.”[17]

The practical business of railway contracting began in 1880 on the Nakanogo–Yanagase section of what is now the Hokuriku Main Line[18]. In an age when the carrying basket and the wheelbarrow were the standard means of haulage, the firm brought rails and tipping trolleys onto the site and drove the section forward by methods that were, for the time, revolutionary[19]. Orders then accumulated: the Nippon Railway’s first-district line (Tokyo–Maebashi) from the autumn of 1882, the Itabashi–Akabane stretch of the Yamanote Line from the spring of 1884[20], the two great bridges over the Saigawa and Chikumagawa on the Shin’etsu Line from the summer of 1885, and the Numazu–Hamamatsu section of the Tokaido Line from the end of 1886[21], which together with the Shin’etsu Line was completed in the spring of 1889[22]. The firm entered hydroelectric power with the Ujigawa Electric water-power works of 1909[23], and through the Taisho period built 23 power stations and some 35 kilometres of waterway tunnel[24]. The Omine Dam, part of the second-phase Ujigawa Electric works begun in 1920[25], stood 30 metres high[26] and was the first high concrete dam built for hydroelectric power in Japan[27].

The Tanna Tunnel — sixteen years of trouble that bought a reputation for technique

Kajima Seiichi (鹿島精一), the third head of the house[28], put up a new head office building at Kyobashi in 1929[29], and in March 1930 incorporated Kajima-gumi Ltd with capital of ¥3 million[30], becoming its first president[31]. It was the conversion of a personally owned firm into a joint-stock company, and the largest job that the new Kajima-gumi Ltd carried was the Tanna Tunnel[32]. Running some 7.8 kilometres through the hills between Atami and Kannami on the Tokaido Main Line, the bore was begun in 1918[33]; in May 1925, at a point 2,160 metres in from the western portal, it was struck by an inflow of 3.3 cubic metres of water a second together with some 3,600 cubic metres of ejected earth and rock[34], and in June 1930 it collapsed at the edge of a major fault[35]. Kajima-gumi threw in drainage tunnels, grouting, concrete placers and the shield method[36], and opened the tunnel in December 1934, sixteen years after the first cut[37]. The opening raised the carrying capacity of the Tokaido line more than threefold[38]. Through those same years, however, the financial panic ran on into the world depression and coincided with the state’s industrial rationalisation policy, and trading conditions remained hard[39].

In July 1938 Kajima Morinosuke (鹿島守之助) became president[40] and set scientific management up as his governing principle[41]. To take in the factory construction that industry was being ordered to expand under wartime mobilisation, he rebuilt a business mix weighted towards railways by strengthening the building division[42]. Answering the demands of the military and the government for greater productive capacity, the firm took on works in Korea, Taiwan, China and the southern occupied territories as well as factory building at home[43], and both its order volume and the scale of its operations grew[44]. Broken down by type, the principal works from 1937 to the end of the war were 44% factory buildings, 30% power stations, 4% railways and 22% other[45] — railways, which had accounted for 67% in the Meiji and Taisho years, had fallen to 4%[46]. In those eight years Kajima-gumi, whose main ground had been civil engineering, remade itself into a general contractor carrying both civil works and buildings[47].

Building a reactor, and taking first place in the world for orders

The postwar Kajima-gumi faced the cancellation of war-indemnity compensation and the loss of its overseas assets[48] while absorbing demobilised soldiers and repatriates, and got through the worst of it on work for the occupation forces and on salt-field construction[49]. In December 1947 the company name was changed to Kajima Construction[50], and in April 1949 it set up the first technical research institute in the construction industry, keeping research and development inside the firm[51]. When the Korean War turned Japanese industry towards high growth driven by technical and energy innovation[52], orders rose with power-source development and with factory construction in the coastal industrial belts[53], and the firm also took in the infrastructure demand of the Shinkansen and the expressways[54]. It built up a run of large works — Japan’s first arch dam, the Yamashina section of the Meishin Expressway, coastal industrial land on soft ground[55] — and the first reactor of the Japan Atomic Energy Research Institute at Tokai-mura, begun in 1956[56], was built by a joint venture with Shimizu Construction[57] and completed in August 1957[58]. From then on the firm accumulated the largest record in the industry for building nuclear power station structures[59].

In October 1961 the shares were listed on both the Tokyo and Osaka stock exchanges[60]. Capital, $11.1M (¥4bn) at the time of the offering[61], was raised repeatedly and stood at $30.2M (¥11bn) by December 1964, the largest in the industry[62]. In annual orders the company took first place in the world in 1963[63], the 123rd year from its founding in 1840[64]. Its order volume that year ran $27.8M (¥10bn) to $55.6M (¥20bn) ahead of Ebasco and Morrison-Knudsen of the United States[65], and around 1964 annual orders reached $380M (¥137bn) against completed works of $334.4M (¥120bn)[66]. On the technical side the research institute at Chofu carried 161 researchers[67] and about $1.7M (¥600m) a year of research spending, and held 60 patents and 16 utility models[68]. Engineers made up 72.5% of the 9,450 employees[69], and overseas work, completed and in progress together, came to $39.7M (¥14bn)[70] — 16.5% of all the overseas work being carried by Japanese contractors[71].

The Kasumigaseki Building, and the industry’s first ¥1tn order book

In April 1968 Kajima completed the Kasumigaseki Mitsui Building for Mitsui Fudosan[72]. With three basement levels, 36 storeys and a height of 147 metres[73], it was Japan’s first full-scale skyscraper built on a flexible structural frame[74], and the first building begun under the special-district designation of the revised Building Standards Act[75]. The original scheme had been for nine storeys[76]; after study of the surrounding traffic, sunlight and pedestrian flow it was recast at 36[77], and Kajima sat on the planning committee alongside the client and the architect from the planning stage onward[78]. Muto Kiyoshi (武藤清), professor emeritus of the University of Tokyo and a world authority on earthquake-resistant structure, was brought in as executive vice-president[79]; structural calculation by electronic computer and prefabrication of members compressed the programme[80], and the building was finished at ¥300,000 per tsubo[81]. More than 80 patents and utility models were developed in the course of building it[82], and by the middle of the 1990s Kajima held the largest skyscraper record in the industry[83].

In January 1971 the articles of association were amended to add the housing business and dealings in real estate to the company’s objects[84], and the Shiki New Town, begun in September 1977[85], became its first full-scale development project as a developer[86]. Atsumi Takeo (渥美健夫), president from 1966[87], said in a lecture in February 1970[88] that his strategy for the 1970s was construction as a “systems industry” taking part continuously from the planning stage through design and construction[89], and traced the idea back to the experience of the Kasumigaseki Building[90]. Orders in the term ended November 1969 came to $433.1M (¥156bn)[91], the eighth consecutive term of increase since 1966[92], and the share of work won on reputation by negotiated contract rather than by tender reached 72%, the highest in the industry[93]. Overseas work had accumulated to 34 projects and $66.3M (¥24bn) since the first venture abroad in 1954[94], and at the shareholders’ meeting shortly before the lecture the English name of the company was changed from Kajima Construction Company to Kajima Corporation[95].

The first oil crisis of 1973 brought a slump in demand in the construction market[96], and two years later, in 1975, Chairman Kajima Morinosuke, who had led the company since 1938, died[97]. In February 1978[98] his son-in-law Ishikawa Rokuro (石川六郎) became president[99]. A graduate of the civil engineering department of the University of Tokyo who had entered the Ministry of Transport[100] and moved to Kajima as a director in 1955[101], he said on taking office that the company should “aim at what only Kajima can do.”[102] As the basic task of improving the constitution of the business through the low-growth years he set the introduction of TQC — total quality control[103] — bringing into construction a method of quality management proven in manufacturing[104]. Earnings turned up from the 1980 financial year[105], and orders in the 1981 financial year reached $4.5B (¥1tn), the first in the industry to do so[106]. In August 1982 the company received the Deming Application Prize[107], and in 1984 Kajima Shoichi (鹿島昭一) became president[108].