Media Coverage

Our article was published in ” VENTURE TSUSHIN” December 2014 issue.

2014/12/12

Our article was published in “VENTURE TSUSHIN” December 2014 issue.

INTERVIEW

Interviews with Entrepreneurs in Real-Estate

How 5 group companies could be established and 9 corporate executives could be appointed in 4 years

To enhance the clients’ corporate value, F&P continues to give it “One More Try”
Tetsuya Fukuda,
President and CEO, Fukuda and Partners Co.,Ltd.Corporation (F&P)

Specializing in the construction of logistics and retail facilities which are parts of basic logistics infrastructure considered as the “arteries of the economy,” Fukuda and Partners (F&P) has developed their own unique construction and real-estate services. After its establishment, why is it continuing to grow with 13 consecutive terms of surplus? We asked the CEO, Mr. Fukuda about his unique business model and his vision.

*The following is an excerpt from an article appearing in Venture Tsushin, Vol. 58 (December issue, 2014) and is dated when the interview took place.

An exclusive “only one” business model called “co-sourcing business”

-Please tell us about your business operations.

We are an exclusive partner in construction and real-estate specializing in building logistics and retail facilities as a construction and real-estate co-sourcing company. We mainly offer our services by acting as an agent, complementing and assisting the functions and duties as the “Construction Department” and the “Real-Estate Development Department” for our clients.

From property selection, development work, facility planning, design supervision and the supervising of facility operations, we are capable of responding to the diverse and wide range of our clients’ needs. We render services to “construct optimum facilities,” “optimize operations,” “boost competitiveness,” “judge propriety” and “improve business profits.”

-What is a co-sourcing business?

We are not merely an outsourcing company. It is a form where the client and F&P mutually share and utilize each management resource and business process. By doing so, this leaves the client with experience and know-how. By creating a relationship a step deeper, we can produce further additional values.

-Please tell us about your specific business operations.

We cover everything from site searching planning, designing, supervision and facility management of Constructing new facility. At the same time, we have a list of services which not only support newly constructed facilities, but also for the overall life-cycle of the facilities. From renewal construction support, renovation, long-range repair planning, building examination and maintenance, demolition work assistance and support for post demolition sales and restructuring property assets, our real-estate and construction specialists stand in the clients’ shoes and fulfill each project. Additionally, we have a leasing function for real-estate which assists logistics and retail facility construction when building a business. For clients that do not maintain a Construction Department or a Real-Estate Department and clients that have limited construction specialists, we have annual contracts where we serve as functional support for the “Construction Department” or the “Real-Estate Department” and project management services which are helpful. If there is originally a Construction Department staffed by architectural engineers, we can provide, for instance, negotiating real-estate, drawing a basic plan and scheduling for the project, projecting cost calculations, selecting a construction company, and assessing and negotiating construction costs.

For clients where the business of construction and real-estate are not their core enterprises, they do not need to hire a full-time architectural engineer specialist or they can endure with limited manpower. Our company complements and assists those specialized functions and we carry out the work precisely and rapidly which leads to high quality results tailored to the objective. We organize each specialized item clearly and contribute for the clients’ accurate decision making to promote a persuasive plan.

Our record of facility building which provides 50 percent of our sales ranks third of all the Japanese architect offices according to the “Sales Rankings of Logistics Facilities.” For 13 years after establishing F&P, the scope of our logistics facility construction is a total floor space of 4.8 million square meters. If you narrow it down to design supervision management and project management, that’s an impressive result. It shows that F&P’s quality of service is valued by our clients and I would like to express my gratitude to our clients and our employees.

-It’s a highly convenient specialized service that involves the clients’ needs. Are there other companies that provide the same services?

There is no competition as the construction and real-estate co-sourcing business, but there is competition over individual operations against architectural offices and consulting firms. By providing a distinguished service compared to our competition, the clients are able to increase their choices and services compete against each other, which, in the end, improves the quality. This is beneficial for our clients.

Since F&P was established, we have considered how we can be more instrumental in assisting our clients’ needs and as we responded we built our own way of providing service. Taking the viewpoint that the client is first and implementing continuous improvements as our course of action, we have been thorough in improving our quality of service. To build a facility a wide array of expertise is needed such as real-estate, design, structural design, electrical facilities and engineering. By building a framework where we can provide all of our expertise, we are capable of covering a wide field and in order to meet the diverse needs, we have hired personnel who possess different strengths and nurtured a heterogeneous team with different skills. Not only do we improve convenience by our comprehensive strength, we have developed a process with clients that produce highly added value.

The source of growth is a flexible system that attracts different types of personnel with different skills

-Your company’s co-sourcing business is an unprecedented new business model.

Yes. When there is a situation where we cannot meet the clients’ specific needs, we provide a project team that we integrated from our external partners. We meet our clients’ objectives and solve their problems. We have our external partners share the empathy of our vision and our corporate goal of “striving to be an endearing true partner.” By having the companies understand our corporate spirit, our 5 quality characteristics and our management policy, we will be able to provide instrumental service for our clients. In a sense, this might be the new way for an organization.

In addition, a diverse and flexible employment pattern and work policy produces a heterogeneous team with different skills and increases productivity. The retirement age is 65, but if one is healthy and productive, he/she can continue to work until close to the age of 70. That is why many of the core members of our design and sales department have come from general construction companies and have worked at the front lines of construction and real-estate and have had experience for 30 to 40 years. Their exceptional knowledge and experience meet the needs of our clients and this raises quality. Also, because of our flexible work policy, there is an increase of female employees and they are showing great success.

In order to produce new values, F&P continues to give it One More Try

-Please tell us what your future goals are.

In order to meet our clients’ different needs, I would like to pursue the Value Up business and data business. We are also going to be expanding our services in Asia. What is most important is our stance, the F&P’s spirit of giving it “One More Try!” and by furthering continuous improvement with the view that the client comes first, we can improve the quality of service for our clients. The spirit of giving it “One More Try!” is the will to make one more effort. How can we be truly helpful for your clients? To improve business profits for our clients, we will always continue to “give it one more effort” repeatedly. I believe that the outcome will generate new values that will help society.

The venture spirit of company officers and seasoned workers that support F&P’s growth

The unforgettable project that formed the company’s origin at the time of establishment

-Mr. Sato, you joined F&P 6 months after it was established. Please tell us what it was like when the business was established.

Mr. Sato: I worked even after the last train had left and I was at the office before the start of the day. It was like that every day. The person who was working even harder was the president, Mr. Fukuda. When the date changed at midnight and as I left the office, even while he was working, Mr. Fukuda would say, “Good night” and sent me on my way. And before I arrived at work he was already in the office and would say, “Good morning.” I wondered when he was sleeping (laughter). There were only a few employees. There was the goal to build an ideal company, so I never felt “tired” or “it’s tough” no matter how busy I was. There is a project during the early days that I still cannot forget today.

-What kind of a project was it?

Mr. Sato: There was an order from a major real-estate company and the job was to find and list large tracts of land over 33,000 square meters in the Tokyo Metropolitan area.

In order to do research, we had to purchase residential maps that each cost several tens of thousands of yen. However, in those days, the company was in a state where we did not have enough money to buy residential maps. When we consulted with our client, not only did they let us borrow their residential maps, but they even let us use a room with a copy machine. We frequented the room and when we presented the list within the deadline, the major real-estate company was delighted and we were able to secure an annual contract.

No matter how large or small the project is, we complete the job by devoting all our energy. That is our basic principle. I would like to hold on to those feelings no matter how large this company becomes.

Refining a one of a kind corporate culture and continuing to innovate

-Please tell us about the corporate atmosphere.

Mr. Ono: No matter how high the hurdles are, once we are asked to do a job, rather than saying “It can’t be done” we maintain a position of “Take exhaustive measures in looking for a solution and definitely make it happen.” For instance, as a result of the Great Tohoku Earthquake, we helped repair our business client’s heavily damaged logistics facilities. We immediately rushed in and drew up a reconstructing plan. While there were many logistics facilities with no inkling for reconstruction, we were able to reopen our business client’s logistics facilities without delay.

Our company has set in place a system where we can provide versatile assistance service even when it is not our expertise.

-How is it possible for you to do that?

Mr. Ono: It is because when we place calls, many external real-estate companies and construction companies cooperate with us. Because we are independently funded, we are in a position where we can deal equally with any other company.

Furthermore, from the viewpoint of external construction companies and design associated companies, F&P is in a position where we could be that company’s client or contractor, a client enterprises partner. When we are lacking in resources or the know-how, by going to an external company that has, we can solve the problem. I am confident that among the construction and real-estate industry, F&P is a rare existence.

-Please tell us about your future goals.

Mr. Ono: The reason why F&P can keep providing innovations is because there is the spirit of “One More Try!” that runs through us. It is my goal not to terminate this corporate culture and to keep refining it.

Performing the best work thoroughly as a design professional

-Please tell us about your career until now.

Mr. Kameyama: I was in charge of many projects at a major general construction company. I’ve had experience with sites that were on the scale of 10 billion yen. I was in charge of the design division for logistics facilities for 10 years before I retired.

It might be because it was unusual for a major general construction company to set a design section specifically for logistics facilities, but I still have contact with many of the people who are in charge at logistics companies.

During the two years at F&P, I was involved with several projects that were mainly large scale sites with *multi-purpose types and at the moment we are building 3 sites.

*Multi-purpose type: A highly versatile logistics facility where it can accommodate several tenants and is generally represented as being able to access each floor directly with a ramp.

-Please tell us about your design philosophy, Mr. Kameyama.

Mr. Kameyama: The structure of a logistics facility is simple. You might think that a high level of design technique is not needed. However, in truth, it is exactly the opposite. The simpler things are, you cannot take short measures and that is why the degree of difficulty is high.

You need experience too. For example, you have to analyze the weather data for the site and understand the conditions of the seasonal winds in order to set the building facing the right direction. You need to incorporate necessary measures in the design. Those minute details are essential.

No matter how nicely one designs using CAD, without considering weather conditions or how the facility is going to be used, it is just plain drawing (laughter). To say the least, that is not the work of a professional.

-Please tell us about what you find rewarding at F&P

Mr. Kameyama: Because I am given the responsibility for the job, I find it is easy to work here. Besides myself, there are many experienced employees. They are all highly skilled professionals, so it keeps me in the competition.

Score of 99 points is a failure. Constantly striving for perfect 100 score.

-Please tell us about your achievements up until now, Mr. Horikoshi.

Mr. Horikoshi: Before joining F&P, I was at a major general construction company in charge of construction facility design mainly for sites in Osaka. I was also involved with the *Osaka Marubiru.

At the moment, I am making use of my past experience by taking part in facility design and I am also in charge of the business department at the Western Japan Operations Department which is in Osaka.

*Osaka Marubiru: A landmark structure for downtown Umeda located in front of JR Osaka Station.

-What do you consider as important when you are working in facility design?

Mr. Horikoshi: This goes without saying, but it is never to cause a problem in the facilities. No matter how wonderful the building is, if there is even a slight defect in the facilities, it is ruined. For instance, when there is a room facing south that receives sunlight, you need to devise a way to place the indoor units so that the air conditioning reaches all areas. I pay close attention to those situations.

Facilities design is always required to score a perfect 100 points and 99 points is considered a failure in this world. If I can say what I contributed to this company, it would be based on many years of experience, listing the cautionary points for the facilities and being able to feed back the information to the construction site.

-Please tell us about your future goals.

Mr. Horikoshi: For the Western Japan Operations Department to become independent. At the moment, projects for the Western Japan region are marketed by the headquarters and the Western Japan Operations Department conducts project management. There is a division of labor. I would like to see where we are not only in charge of the post-process, but also acquire new projects for the Western Japan region. I would like to develop an organization that can complete a project from start to finish. The strength of F&P is keeping an entrepreneurial spirit and being able to challenge the unknown. I would like to keep opening new possibilities in the future.

Contributing to a swift recovery of a logistics base that was at a standstill after the Great Earthquake

Contributing to a swift recovery of a logistics base that was at a standstill after the Great Earthquake

-What kind of support is Mitsubishi Shokuhin receiving on a daily basis?

Mr. Senda: When we are looking for a site that is suited for a logistics facility, we receive the latest information and criterion for judgment from a viewpoint of total optimization. We also receive support for the elimination and consolidation of logistics facilities.

We, in the intermediary distribution of food products industry, are experts in the fields of building a distribution network and logistics facilities within the compound, but when it is a problem either of real-estate or construction, we do not have expert knowledge of either field. That is why we have strong confidence in F&P.

-I heard that you received support from them when you suffered great damage during the Great Tohoku Earthquake.

Mr. Senda: Yes. Our communications network was cut off and we could not receive specific details from the site immediately after the earthquake. We got in contact with F&P and the very next day, a staff of about a dozen rushed to the site. They directly inspected and checked the damage, drew up a restoration plan and immediately worked out the arrangements for construction.

Mr. Sekiguchi: First, to ascertain and secure a safe area. Next, to select emergency construction measures and arrange for necessary equipment. The situation at the site changed as each minute passed and to respond to our client’s call, we thought what we could do with the materials we had or the personnel that we could secure. And as food products were being shipped right in front of us, we made arrangements for constructing with permanent measures.

Mr. Senda: A regular construction company would probably place the priority on rebuilding the physical part, the facility. However, that is not a suitable measure during an emergency. The reason is we are not an operating company of a logistics facility. This is a company that delivers food without fail to people who need it. We govern the distribution. In other words, we are truly the lifeline for food. Because F&P is a management company that understands the true nature of the distribution industry, they took appropriate measures. That was the measure of placing the recovery of the distribution function as the highest priority. Because of that, the sites in Sendai and Iwanuma areas started running and shipping in April and after Golden Week holidays, they were operating at full capacity. Compared to other sites in the area, we were able to resume very quickly and we were able to deliver food products to the earthquake victims who were having a hard time because the distribution functions had stopped.

Mr. Sekiguchi: We have been in business with Mitsubishi Shokuhin since October, 2002. We have had a long mutual trust and I think that might have contributed to an early recovery.

-Please tell us what Mitsubishi Shokuhin expects from F&P in the future.

Mr. Senda: With the advancement of globalization, we can still see the heated competition within the logistics industry. The need for support by specialists will most likely be required more than ever. The existence of F&P as a logistics facilities expert partner for construction and real-estate is very important for our company.

We would like to have our reliable partner to keep supporting us

-Please give us a general description about the Distribution and Repacking Centers

Mr. Kono: It is a steel framed two story building which is a distribution and repacking center for frozen and refrigerated food products and it covers 6 prefectures in the Tohoku region. The average shipping amount is approximately 65,000 boxes. In monetary terms, we handle approximately 90 million yen worth of frozen and refrigerated goods. We were the first in the nation to adopt a combined type cart system and we were able to achieve a highly efficient distribution/repacking line. We were able to achieve shipping at an ultra-high speed of one box per one to two seconds.

In addition, we have installed the latest equipment and many people from the logistics field from all parts of the country have come to observe it.

-Please tell us about the service that F&P provided.

Mr. Yamada: From procurement of land to negotiating with landowners, business income and expenditure, being persistent in trouble-free flow planning, freezing and refrigeration facilities designs that minimize condensation and reduced running cost and construction supervision that demanded a precise execution of high quality. For all processes, we assisted the implementation for the project.

Mr. Kono: The bottleneck in particular was the procurement of land. We could not find a suitable location that easily. Then, there was a suggestion from F&P. After searching for nearly a year, the location for the project area was decided.

After a number of trial and errors, such as, matching the *distribution and repacking center function for refrigeration and freezing to other facility functions, securing a parking area for the workers’ 400 vehicles, and examining innumerable patterns of traffic flow of trucks, cars for commuting, and pedestrians, we ended up with this design. On the first floor there is a 14,000 square meter logistics center and on the second floor, a parking area for 400 vehicles. It may appear like a shopping center, but operation-wise, the logistics function needed to be consolidated on the first floor. We were able to produce a form that is quite rare in the metropolitan area.

Furthermore, after the construction of the freezing and refrigeration center was completed, we immediately started construction plans for the *dry goods center. F&P was also there engaged in procuring the land. Even before we officially commissioned the project, they were already on the move voluntarily. It was true harmony. Mr. Yamada: It was the same scheme as the last time, so we were able to plan in a timely fashion. After deliberating construction costs and business income and expenditure, we were able to secure the neighboring land.

Mr. Kono: That is why after the project was commissioned officially, we were able to procure the land immediately and start construction early.

With reconstruction demand fully in progress, we were able to get hold of construction material and land before the cost sharply increased. We were able to save costs drastically. If we made a decision a bit later, with the sudden rise of construction costs, this project would not have been possible. It was perfect timing.

-What do you expect from F&P in the future?

Mr. Kono: As experts of real-estate all the way to designing, they serve as comprehensive service function specializing in logistics. F&P has mobile power at the critical moment. We would like F&P to keep supporting our company as being part of the team and as a reliable partner.

*Distribution and Repacking Center: A wide area distribution and small volume repacking facility for opening incoming merchandise, re-packing according to orders and distributing to destined locations
*Dry Goods Center: A facility that holds products at room temperature

“VENTURE TSUSHIN”December 2014 issue. ＞＞ Japanese interviews＞＞