Company history

Kajima began in 1840 as a one-man trade. Kajima Iwakichi opened a shop in Kyobashi, Edo, under the sign Daiwa, working as a master carpenter for daimyo residences and for the townhouses around him. When the ports opened he followed the work to Yokohama, and in 1860 he put up the Jardine Matheson trading house known as Ei-ichiban-kan — one of the earliest Western-style buildings in Japan. There were no precedents in the country for its drawings or its methods and no craftsmen to subcontract to, so Kajima had to reason out brickwork and Western roof trusses on site and keep the answer in-house. Taking on what no one else could and retaining the difficulty as technique is the habit the company was formed around.

Then it did the thing it would keep doing: it closed the business that was working. In 1880 the second-generation Kajima Iwazo dissolved Kajima-kata — by then a Western-building contractor with a national reputation — and founded Kajima Gumi as a railway specialist, betting that the state-backed railway boom offered a nationwide footing that architecture never would. The bet held for half a century. From the Yanagase tunnel on the government line onward, Kajima built public and private railways across Japan and, after the Sino-Japanese War, in Korea, Manchuria and Taiwan; through the Meiji and Taisho eras railways accounted for 67% of contract value and hydroelectric work another 14%. It entered hydro in 1909, and the Omine Dam of the early 1920s — 30 metres high — was the first concrete high dam built for power generation in Japan.

The work that made the firm’s name was the one that nearly broke it. The Tanna tunnel, 7.8 kilometres through the Tokaido line between Atami and Kannami, was begun in 1918 and met a water inrush of 3.3 cubic metres a second in 1925 and a collapse at a major fault in 1930; Kajima drove drainage headings and brought in grouting, concrete placers and shield tunnelling, and opened it in December 1934 after sixteen years, more than tripling the line’s capacity. In the middle of it, in 1930, the third-generation Kajima Seiichi turned the family trade into a joint-stock company with ¥3 million of capital. From 1938 Kajima Morinosuke ran the firm on a doctrine of scientific management and rebuilt it around wartime factory construction: between 1937 and 1945 factories were 44% of major work and power plants 30%, while railways — 67% a generation earlier — fell to 4%. In eight years a civil-engineering contractor became a general contractor.

The war left Kajima with cancelled military claims, lost overseas assets and returning staff to absorb, and it survived on occupation-force work and salt-field contracts. It renamed itself Kajima Construction in December 1947 and in April 1949 opened the industry’s first corporate research institute — R&D held in-house, in a trade that normally bought its methods. When high growth arrived, that laboratory paid: power development and the coastal industrial belts, then the Shinkansen and the expressways. Kajima built Japan’s first arch dam and the Yamashina section of the Meishin expressway, and in 1956 it broke ground with Shimizu on the first reactor of the Japan Atomic Energy Research Institute at Tokai-mura, completing it in August 1957 — the start of an industry-leading record in nuclear plant buildings.

In October 1961 the shares were listed in Tokyo and Osaka, and rights issues took capital from ¥4.0 billion to $30.2M (¥11bn) by December 1964, the largest in the industry. In 1963 — its 123rd year — Kajima took first place in the world by annual orders, ahead of America’s Ebasco and Morrison-Knudsen; around 1964 it booked $380M (¥137bn) of orders against $334.4M (¥120bn) of completed work. The engine was declared openly: 161 researchers at the Chofu laboratory, some ¥600 million a year of research spending, 60 patents, and 6,850 of 9,450 employees — 72.5% — classed as engineers.

The Kasumigaseki Building, completed in April 1968, was the proof. At 36 storeys and 147 metres it was Japan’s first genuine high-rise on a flexible structural frame; Kajima recruited the seismic authority Muto Kiyoshi as vice-president, ran the structural calculations by computer and prefabricated components to compress the schedule. More than eighty patents came out of it, and Kajima drew the obvious conclusion — that the money was moving upstream. In 1971 it amended its charter to add housing and real estate, and president Atsumi Takeo recast construction as a “systems industry” in which the contractor joins at the planning stage; by then 72% of its work came by negotiation rather than tender, the highest in the industry, and the English name became Kajima Corporation.

The 1973 oil shock ended that expansion, and in 1975 Morinosuke, who had led the company since 1938, died. In February 1978 his son-in-law Ishikawa Rokuro took over and answered a shrinking market with the least obvious weapon: not price, but TQC — total quality control, a manufacturing discipline, imported into a trade where every site is a one-off. Earnings turned up from FY1980, orders passed $4.5B (¥1tn) in FY1981 — an industry first — and the Deming Application Prize followed in August 1982.

The land boom of 1986–87 pushed sales past ¥1 trillion for the first time and Kajima planted subsidiaries in North America, Europe and Asia. Underneath the numbers the lead was already gone: in the year to March 1990 Shimizu overtook Kajima in both sales and orders, ending twenty-seven years at the top. Kajima Shoichi, the last family president, diagnosed it himself in 1990 — “a good idea is copied straight away, and the copying keeps getting faster” — which is what happens to a company whose advantage is being first. He stepped down that June, Miyazaki Akira became the first president from outside the family, and 150 years of founding-family management ended.

Three years later the company was in court. In 1993 vice-president Seiyama Shinji was found to have paid ¥20 million to a former governor of Ibaraki over the prefectural headquarters project and was indicted that October; Kajima was suspended from bidding by the construction ministry and local authorities just as the post-bubble slump killed private demand. In 1996 Umeda Sadao became the first career employee from outside the founding family to lead the firm, and inherited a balance sheet to clean: a ¥51.8 billion special loss in 1995 on the property subsidiary Toa Real Estate, then a net loss of $1.5B (¥199bn) in the year to March 1999 against an ordinary profit of only ¥9.8 billion.

What followed was not a slump but a structure. Construction employment fell from 6.85 million in 1997 to 4.98 million in 2010 while some 470,000 contractors remained in the field, and permanent price competition set in. Kajima’s operating margin sat at 0.96% in FY07 and 1.01% in FY08 — $190.7M (¥20bn) of operating profit on ¥1.95 trillion of sales. Under Nakamura Mitsuyoshi, president from 2005, the financial crisis produced the group’s first consolidated net loss in the year to March 2009 and, a year later, its first consolidated operating loss in 170 years. Operating profit stayed between ¥12.7 billion and ¥29.5 billion through FY14: roughly 1%, for two decades.

In June 2015 Oshimi Yoshikazu became the tenth president on a deliberately unfashionable premise — “the site is this company’s most important department and its leading player.” Reconstruction demand after the 2011 earthquake and a tightening labour market lifted unit prices, and the twenty-year plateau broke: consolidated operating profit reached $918M (¥111bn) in FY15 and $1.4B (¥155bn) in FY16, margins of 6.6% and 8.9% against roughly 1% in FY10–14. The 2019 “Kajima Smart Production” programme cut total labour hours on the Nagoya Fushimi K Square project by about 20% versus a comparable office building.

The deeper change was where the capital went. The mid-term plan of June 2018 committed $4.5B (¥500bn) over three years, mostly to development — an attempt to answer the oldest weakness of a contractor, that profit swings with each award and with public investment, by holding assets that pay rent for years. Kajima bought large domestic income properties from FY2019 and recycled the capital through ¥33 billion of domestic and ¥54 billion of overseas disposals, completing the plan. Covid closed about 60% of its sites for ten days or more in the spring of 2020, but work resumed under protocols and the earnings impact stayed slight.

From June 2021 Amano Hiromasa ran the plan “Investment for the Future” on the demand that was actually there — semiconductor fabs, data centres and pharmaceutical plants — while widening development from offices into hotels, residences and logistics, short-hold in the West and long-hold in Asia. ROE reached 11.4% in FY22, net income $747.3M (¥105bn) in FY23 and $759.1M (¥115bn) in FY24 at 10.2% ROE, both above target; the 2024 acquisition of Rodgers Builders added some ¥80 billion of annual revenue in the United States. The 2024–26 plan targets ¥130 billion of net income with ¥230 billion of shareholder returns and ¥50 billion or more of cross-shareholding sales. Then in January 2026 Amano died suddenly; Oshimi returned on an interim basis, and in June Kiryu Masafumi — a building-division man who spent more than 80% of his career on site — became the thirteenth president, on the line that “passing on the technique we inherited is one axis of managing this company.”