Takasago Thermal Engineering - Company History

Takasago was incorporated on 16 November 1923, taking over the entire heating-works division of the old Takasago Kogyo. Within a year it had installed what is remembered as Japan’s first residential air conditioning, in a private mansion; in 1927 it air-conditioned the Mitsukoshi Hall, the country’s first fully climate-controlled theatre; and in 1932 it completed Japan’s first heat-pump heating and cooling installation. The business was defined at the outset as air-conditioning works and the fields immediately around them — design and installation, but also developing and running the machinery.

The constraint on that business was that every large refrigeration machine was imported, at a price that included freight and the travel of foreign engineers. Founder-president Yanagimachi Masanosuke went to the United States and, after years of work, produced the first domestically made unit, the Takasago-Ebara turbo chiller, followed by Japan’s first domestic heat-pump system and industrial cooling towers. By 1940 the company was delivering cryogenic equipment and turbo refrigerators reaching −75°C — the temperature range it worked in had run from the living room to the laboratory.

A business that no longer only heated needed a name that no longer only said heating: in July 1943 Takasago Danbo Koji became Takasago Thermal Engineering. The name has not changed since, and everything the company does today — semiconductor cleanrooms included — still sits inside that word. Postwar reconstruction was a matter of placing branches: Osaka in 1949, Sapporo and Nagoya in 1952, and construction-ministry registration renewed every two years. As growth accelerated the jobs got bigger, and Takasago conditioned much of the new central Tokyo — the Daiichi Tekko Building, the Tetsudo Kaikan at Tokyo Station, the Shibuya Tokyu Kaikan.

Even forty-five years after its founding the company was small: ¥10.5bn of parent revenue in the year to March 1967, growing about 10% a year. The change came from the factory floor. Production and medical sites were demanding air that was clean and particle-free, and with support from an American firm Takasago built its first full cleanroom in 1968, the research building for Nippondenso. Big-building work continued alongside it — the World Trade Center Building in Hamamatsucho, then Japan’s second-tallest. Revenue jumped 52% to ¥19.7bn in the year to March 1970.

Forty-six years after founding, in November 1969, Takasago listed on the Second Section in Tokyo, added Osaka in 1971, and was promoted to the First Section of both exchanges in August 1973 — inside four years. Revenue went from ¥12.9bn in the year to March 1969 to ¥31.4bn by March 1973. Subsidiaries were set up on either side of the core trade: property and building management in 1972, an air-conditioning equipment maker the same year. But profit did not track revenue — ordinary profit fell 30% in the year to March 1974, recovered, and through the late 1970s wandered between ¥1.5bn and ¥2.5bn on steadily rising sales.

What Takasago was actually air-conditioning in this period explains the volatility. In the year to March 1975, offices were 29% of revenue and retail and leisure 28% — nearly 60% between them — while factories and warehouses were 14%. Seven years after the Nippondenso cleanroom, industrial work was still not the main business, and earnings were held hostage to construction demand for buildings. As a specialist, Takasago also bid for public work at about half the rate of its rival Asahi Kogyosha, and most of its orders arrived indirectly, through general contractors. The first overseas foothold came in 1974 with a Singapore office, followed by Macau and Hong Kong, an overseas division in 1980 and a Malaysian company that November.

In December 1984 Takasago opened a central research institute — unusual for a building-services contractor, and a deliberate answer to the question of how a firm that installs to other people’s specifications can differentiate itself. Rather than widening into a full-service contractor covering electrical and plumbing, it concentrated research on the narrow ground of air conditioning, heat sources and ventilation. Four years later the institute delivered SIS, an ice-storage system exploiting supercooling to generate sherbet ice continuously, making night-made ice run the daytime cooling.

Then the customers found the technology. As DRAM production boomed and lithium-ion battery manufacturing began in Japan in the 1990s, both required environments Takasago knew how to build; its Dry Room, a low-dew-point controlled environment, is still used in battery manufacturing today. Products followed through the 2000s — the GODA analysis software for optimizing plant operation in 2005, the SWIT swirl-induction stratified system for large spaces, and one of the world’s largest open building-automation systems, installed as the central control for Roppongi Hills Mori Tower. Hydrogen work began around 2006 with JAXA and AIST.

The technology did not immediately reach the income statement. A 1999 Kaisha Shikiho note recorded factory air-conditioning — the higher-margin work — down 25% in orders and half in completions, with core building work flat. Consolidated revenue sat in the ¥200bn range through the 2000s while ordinary profit oscillated between about ¥1bn and ¥6bn. Asian subsidiaries multiplied — Beijing in 2003, Singapore in 2005, Vietnam in 2007 — but the profitable industrial business was still not the main one, and building demand still set the result.

Under Ouchi Atsushi, president from April 2010, the shares were consolidated onto the Tokyo exchange and the group tidied itself — maintenance businesses folded together into what became TMES, an Indonesian company, a Myanmar branch, a head-office move to Shinjuku in 2014, and IDC-SFLOW, a wall-discharge system for data centres, co-developed in 2011. Revenue stayed in the ¥210–250bn band and ordinary profit between ¥4.8bn and ¥6.7bn: a stable, unremarkable contractor.

The break came from adding acquisition to invention. In December 2015 Takasago took 26.12% of Integrated Cleanroom Technologies of India, which manufactures and installs cleanroom equipment, and consolidated it in November 2017 — the 1984 method of growing technology in your own laboratory now supplemented by buying the company that already had it. Headcount rose 883 in a year. Revenue went from ¥243.5bn in the year to March 2015 to ¥319.8bn by March 2019, and the ordinary margin from 3.5% to 6.0%; operating profit more than doubled to ¥16.3bn.

What followed was a change of identity visible in one comparison. Over the decade to fiscal 2024, general air-conditioning revenue grew just 3.6%, from ¥157.5bn to ¥163.2bn — while industrial air conditioning rose 2.4 times, from ¥86.4bn to ¥210.5bn, overtaking it in fiscal 2022 and reaching 55.1% of the total, with overseas revenue up 2.5 times. The company whose factory work was 14% of revenue in 1975 had become a company whose main battlefield is the semiconductor fab. Under Kojima Kazuto, president since April 2019, the technology has pointed at decarbonization: the Takasago Thermal Innovation Center opened in 2020 combining solar, biomass, groundwater heat and storage to ZEB standard, the Hydro Creator water electrolyser launched the same month, and a lunar demonstration electrolyser flew on a lander in January 2025 — the landing failed in June and the experiment was abandoned. The economics, meanwhile, inverted the old contractor hierarchy: in the year to March 2025 Takasago’s 8.4% operating margin exceeded Kajima’s 5.2%, roughly half its work now taken directly from the client rather than through a general contractor. That year produced ¥32.4bn of operating profit and ¥27.6bn of net profit, beating the 8.0% margin target of its medium-term plan; the following year reached ¥423.9bn of revenue and ¥47.7bn of operating profit, and the fiscal 2026 ordinary profit target was doubled from ¥20bn to ¥40bn.