Adding HVAC, piping and water treatment: becoming a full facilities contractor (1964)

The slow move of adding a line of business

The 1964 decision was neither an acquisition nor a large capital investment but the plain step of adding one item to the list of trades the company sold. Such moves take time to work. Ten years after entry, HVAC and piping was 16% of sales; twenty years after, 22% — never enough to displace the main business. Even so, it mattered that a company which had entrusted its order book to a single tap, the power utility’s capital spending, now had a means of opening another tap itself, in building owners and local governments. Looking at the sequence — water treatment in 1971, housing in 1972 — the same move of adding a trade is chosen again and again.

The slowness of the transition is partly the nature of construction. The time it takes to train engineers, build a record and get onto a client’s approved-bidder list is exactly the time a new trade takes to get going. The order of events — setting up a training institute in 1962, then entering HVAC and piping, then water treatment, then public sewerage and an overseas environmental business — is a way of walking that has that time built into it. The single line of business added in 1964 now sells ¥164.9 billion a year.