We provide solutions that extend throughout the plant life cycle, from construction (EPC) of municipal solid waste treatment plants for local governments to maintenance, primary equipment improvement and service life extension, operation management, and operation (O&M).
Number of facilities Percentages by age
Source: Prepared by the Company based on the
“2021 Survey of Municipal Solid Waste Treatment”
by the Ministry of the Environment.
Growing demand for rebuilding and extending the life of waste treatment facilities
Some 1,000 facilities in Japan incinerate about 170,000 tons of waste per day, and those plants are aging, with about 60% of them having been operating for at least 20 years. With many facilities built during the 1990s to address the problem of dioxin emissions reaching the point in their service lives at which they need to be updated, we expect to see strong replacement and service life extension demand continue for the time being.
Increased need for long-term outsourcing of facility operations to private companies
Use of the O&M business, which comprises a comprehensive contract for facility operation management and maintenance, and DBO arrangements, which comprise orders for both facility construction and operation (O&M), is growing from the standpoint of taking advantage of private-sector expertise. At the same time, facilities are expected to provide functionality that creates new value for their region, for example by serving as regional disaster prevention facilities or energy centers, rather than simply treating waste.
DBO ratio
(Based on research by the Company)
Changes in waste management toward a decarbonized society
Furthermore, as society works to realize carbon neutrality by 2050, we expect to see more sophisticated use of waste to generate electricity and heat along with growing demand for biogas recovery (methane fermentation) plants and combined systems that pair incineration with methane fermentation and other technologies.
Capture demand for long-term outsourcing of facility operations
Currently, about 120 of the municipal solid waste treatment plants we have delivered continue to operate, and we are supporting safe, stable, and appropriate waste treatment in their regions through after-sales service including regular maintenance, functional improve-ments, service life extension work, and operation management.
In an effort to enhance its after-sales service offerings, the Takuma Group began offering remote support service for customer plants in 2004, and in 2016 we launched the POCSYS® Plant Optimization Comprehensive Support System, which dramatically enhanced that functionality. Then in 2019, we opened the Solution Lab as a remote monitoring and operation support facility. In addition to supplying safe, secure, and stable plant operation to customers through 24-hour operational support, we are helping streamline plant operation, for example to increase the amount of power sold and reduce chemical consumption, by analyzing, visualizing, and otherwise utilizing operating data. Furthermore, we launched the Supply Lab, an after-sales service facility, in January 2023, and we will work to realize additional quality and profitability improvements in after-sales service by effectively utilizing these resources.
Number of long-term O&M contracts (including DBO operating projects)
Proposal for a waste treatment facility that solves local issues
Going forward, municipal solid waste treatment plants will be called upon to create new value in order to resolve regional issues, for example by promoting the recovery and use of waste energy, serving as disaster prevention and energy facilities, and revitalizing regional economies as part of the effort to realize a decarbonized society and Regional Circular and Ecological Sphere (Regional CES) (local SDGs).
In addition to promoting power and labor savings in plant operation through the use of digital technologies while working to realize more efficient energy recovery through the refinement of combustion technology and energy recovery technology, which are core Takuma technologies, as well as use of Artificial Intelligence (AI) and the Internet of Things (IoT), we will help resolve regional issues by creating new value through the expansion of our Power Retail Business and through partnerships with various companies and organizations.
Waste treatment facilities in service to the region both "normally" and "in emergencies"! In-depth analysis featuring "Imabari City Clean Center"
In addition to construction (EPC) and maintenance of energy plants for private-sector operators, we offer operation (O&M) and other services.
Growing demand for construction of biomass power plants
Since Japan’s 2012 launch of its Feed-In Tariff(FIT) program, which imposes fixed pricing on purchases of renewable energy, demand for biomass power plants has grown rapidly. Takuma, which has long manufactured biomass boilers, has delivered more than 40 biomass power and heat-use plants (including facilities that do not take advantage of the FIT program) since 2014, when it delivered its first FIT boiler. That said, as the FIT program is reviewed, we expect demand to shift towards small and medium-size biomass power and heat-use plants as a way to implement regional-use power supplies and regional decentralized energy.
Growing demand for industrial boiler renewal
Additionally, many industrial boilers that use fossil fuels such as coal and heavy fuel oil, which are common in plant applications, are due to be updated, and we expect that the level of need for conversions to non-fossil fuels such as biomass and RPF will grow as society works to reduce and eliminate dependence on carbon.
Capturing power plant construction and industrial boiler renewal needs
We expect that the business environment in which our customers operate will continue to exhibit major changes in the future, including the drive to realize carbon neutrality by 2050 and the review of the FIT program.We will help customers reduce and eliminate dependence on carbon in their business activities while promoting the use of renewable energy by expanding the introduction of power and heat-use plants that utilize biomass and non-fossil fuels through plans and proposals that precisely target customers’issues and needs based on the technology and expertise we have accumulated through our extensive track record.
Uncovering and capturing after-sales service demand
Additionally, we will help customers resolve issues and further reduce and eliminate their dependence on carbon by pursuing not only precisely-targeted maintenance, but also energy savings, power output increases, functional improvements and service life extensions for equipment, and O&M and other solution proposals for the many plants we have delivered to date.
In addition to construction (EPC) and maintenance of water treatment and sludge incineration plants, particularly for sewage treatment plants run by local governments, we supply operation management and other services.
Growing demand for equipment renewal
There are some 2,200 sewage treatment plants in Japan, and those facilities are aging, with more than 90% having been operating for at least 15 years.
Growing need for effective use of energy from sewage sludge
As we work to realize a decarbonized society, there is growing need to reduce greenhouse gases in sewage treatment and to utilize sewage sludge, a type of biomass, as a form of renewable energy.
Increased need for outsourcing to private companies
We expect utilization of the private sector through arrangements such as Public Private Partnerships (PPPs) and Private Finance Initiatives (PFIs) to increase in the future due to the challenging management environment in which sewage projects run by local governments must operate.
Competitive product offerings
The sludge-fueled power generation system we developed differs from conventional incinerators in that it does not require auxiliary fuel, and it excels in terms of environmental performance thanks to its low emissions of the greenhouse gas N2O, an issue affecting incineration treatment of sewage sludge. Moreover, the system is capable of generating electricity, and its low consumption of power offers excellent energy-saving performance. We have received orders for three plants using this system to date, and we will help reduce greenhouse gas emissions in sewage treatment by continuing to earn more orders in the future.
Additionally, we have delivered numerous high-speed sand filtration systems that boost filtration speed by a factor of two to three while adopting a compact, space-saving design. We will work to secure more orders by proposing updates that take advantage of that space-saving design for existing filtration systems that are due for such service.
Takuma Energy Co., Ltd., a Group company, operates the Power Retail Business, which draws on power generated by municipal solid waste treatment plants and biomass power plants that Takuma has delivered as its principal sources of power.
Increased demand for Local production and consumption of energy and distributed energy
The need for decentralized energy as well as the local production and consumption of power is growing from the perspective of securing energy supplies in times of emergency, utilizing energy efficiently, and revitalizing regions. We expect the importance of power and energy services in the Group’s business domain to grow in the future, for example in the development of the Regional Circular and Ecological Sphere (Regional CES) in waste treatment and in regional-use power supplies in the FIT program.
Increase in demand for renewable energy and CO2-free electricity
Additionally, the level of need for renewable energy and CO2-free power that have environmental value is growing from the perspective of reducing and eliminating dependence on carbon in business activities. The market is expected to grow further as society works to realize carbon neutrality by 2050.
Providing renewable and CO2-free electricity from delivered waste treatment facilities and biomass power plants
In addition to working to expand our sales menu, for example with renewable energy power and CO2-free power, we will seek to further expand our business involving the local production and consumption of power through region-optimized schemes that maximize use of environmental value and producing region value, with a focus on plants that Takuma has delivered. We will also work to expand our line of services designed to resolve regional issues through partnerships with a variety of companies.
We supply construction and maintenance services for biomass power plants and Energy from Waste plants with a focus on Thailand and Taiwan, where we have local subsidiaries.
Construction demand for biomass power plants
Although we expect to continue to see a certain level of demand for bagasse-fired biomass power plants in Thailand, competition with Indian and Chinese manufacturers remains intense. At the same time, the Thai government has announced a policy of promoting biomass power generation, and demand, including for biomass other than bagasse, is expected to grow.
Signs of increasing demand for construction of waste-to-energy plants in Southeast Asia
On the other hand, Energy from Waste projects in the emerging nations of Southeast Asia are often derailed for reasons such as a lack of programs and standards related to waste treatment and insufficient government funding, and a stable market has not yet developed. That said, the level of need for waste-fueled power generation is rising significantly due to population growth and urbanization, and we expect the sector to remain a growth market over the medium and long term.
Local optimization of plants offered and building trust through after-sales service
With regard to biomass power plants, we will strive to earn orders on an ongoing basis by both working to achieve further cost reductions, such as by expanding the scope of overseas procurement, and by differentiating ourselves from Indian and Chinese manufacturers, for example by enhancing maintenance services through our local subsidiary in Thailand.
Establishment of a system that can respond to local needs
With regard to Energy from Waste plants, we will put in place structures to secure orders, for example partnerships with local companies, in an effort to capture demand in the future, particularly in Thailand and Taiwan.
Group company Nippon Thermoener Co., Ltd., manufactures, sells, and maintains general-purpose boilers in addition to designing and building related heat source equipment and systems for various types of manufacturing plants as well as hotels, hospitals, commercial buildings, and other facilities.
Demand in Japan remains constant despite a mature market.Demand is expected to grow overseas.
Although the domestic general-purpose boiler market has matured and is on track to shrink over the medium and long term, the sector remains broad in its reach. We expect a certain level of demand to continue for the time being, for example due to replacement demand. Additionally, demand for energy-saving boilers is expected to increase overseas, particularly in emerging nations. Furthermore, efforts to develop boilers with additional energy savings and higher energy efficiency are expected to accelerate as part of the effort to reduce and eliminate dependence on carbon, and over the long term, the field is likely to transition to heat source equipment that uses non-fossil energy.
Maintain and expand orders by proposing systems that take advantage of diverse product lines
We will support consumer lifestyles as well as industry while working to maintain and expand the scale of orders received in the domestic market by proposing optimal systems that meet individual customers’ needs based on our line of diverse products and to expand our overseas business, particularly in Southeast Asia, where our Thai subsidiary is located. At the same time, we will help reduce greenhouse gases by promoting energy-saving, high-efficiency systems.
Market development with new heat source equipment
Additionally, we will work to develop a new heat source equipment market that suits the characteristics of the decarbonized society of the future by offering systems with greater energy-saving effectiveness, for example hybrid hot water systems that combine heat pumps with vacuum-type hot water heaters, and new heat source equipment that uses non-fossil energy sources, for example wood chip-fueled biomass boilers.
Group companies Sunplant Co., Ltd., and Dan-Takuma Co., Ltd. design and build various types of building equipment, including air conditioning, water supply and drainage sanitation, and firefighting systems, and they manufacture, sell, and maintain equipment for the semiconductor and electronic device industries, including clean rooms, chemical air filters, and magnetically shielded chambers.
Building equipment business may experience a temporary decline, but demand will remain strong over the medium to long term, while semiconductor industrial equipment business is expected to expand.
Although there are concerns that construction demand may be affected by a temporary drop-offin private-sector investment due to the effects of the COVID-19 pandemic, robust demand is expected to continue over the medium and long term thanks to the replacement and repair of aging public facilities and the construction of new healthcare and social welfare facilities.
Additionally, the market for semiconductor manufacturing equipment is expanding thanks to rising semiconductor demand worldwide, which is being fueled by the adoption of new technologies such as Artificial Intelligence (AI), the Internet of Things (IoT), and 5G̶all areas where there has been steady progress̶and by the trend towards digitalization. Going forward, markets serving the semiconductor and electronic device industries are expected to grow over the medium and long term despite short-term fluctuations.
In the building equipment business, we will work to further strengthen our sales and installation capabilities by hiring, retaining, and training human resources, and we will strive to achieve steady growth in the scale of orders received by creating optimal environments that are custom-made to suit a variety of applications and requirements.
For semiconductor manufacturing equipment, we will work to boost competitiveness by developing products that are customized in collaboration with customers and through joint research with universities, and we will strive to expand our business by supplying products that meet customer needs through a variety of alliances.
