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SustainabilitySustainability ManagementMessage from the President
Message from the President
Penta-Ocean Construction was founded in 1896 as Mizuno-gumi in Kure City, Hiroshima Prefecture, and we recently celebrated the 129th anniversary of the company's founding. Over a number of decades, our initial marine civil engineering business expanded to land civil engineering and building construction. Our overseas ventures started with the Suez Canal Dredging Project in 1961, and we have been involved in many milestone projects, mostly based in Singapore, since our first entry into the market in 1964. During the past four years, we have experienced a downturn in profitability due to construction losses posted in the International Business Unit. Nevertheless, a substantial increase in business volume in domestic civil engineering and building construction segments propelled our consolidated net sales beyond the ¥ 700 billion threshold for the first time in FY 3/25. Looking ahead to FY 3/26, which is the final year of our current Medium-term Management Plan, profits are projected to reach a new record high, in line with our initial plan.
Our aspiration is to grow and evolve into a company where all three business units contribute to profitability in a well-balanced manner.
Penta-Ocean Construction Group aims to become a "Genuine Global General Contractor" who practices sustainability management. A genuine global general contractor is defined by the absence of barriers among the three business units (Civil Engineering, Building Construction and International), enabling their seamless inter-departmental collaboration. Moreover, Diversity, Equity and Inclusion (DE&I) are deeply embedded in its corporate culture, and employees of diverse backgrounds can thrive equally and continue growing, regardless of nationality, gender, or field of expertise.
Our belief, "The Greatest Contribution to Society is the Construction of High-quality Infrastructure," is profoundly ingrained in our construction business activities. Not only do we strive to deliver reliable safety and quality backed by advanced technologies, but we will also earnestly endeavor to tackle all sustainability issues from an ESG perspective, across all aspects of our business. With this conviction, we are committed to fostering sustainable development of society, as a genuine global general contractor with distinctive strengths in port, coastal and waterfront areas and overseas.
Under the current Medium-term Management Plan (FY3/24-FY3/26), which was disclosed in May 2023, we set forth our new corporate vision of becoming a "Genuine Global General Contractor" who practices sustainability management. Toward this objective, we are genuinely committed to tackling sustainability issues from a global perspective in all our business and corporate activities. By fostering close cooperation with our subcontractors and business partners in pursuit of sustainable construction activities, we aim to achieve long-term and stable growth of our group. To this end, we have identified eight Materiality issues from an ESG perspective and developed structures and frameworks to promote sustainability management. From FY 3/25, under the slogan of "Sustainability Initiatives Start on Site", we are working to entrench sustainability management across all our branches and construction sites both at home and abroad.
In exploring sustainability management, integrity in corporate activities is paramount, and all executives and employees must uphold high ethical standards and the spirit of compliance. Beyond ensuring strict compliance with laws and regulations, we are committed to conducting fair and honest corporate activities by making further efforts to foster fair competition, transparency, and accountability. In order to instill sustainability management throughout our corporate group and its extended network of subcontractors and business partners, we display posters outlining our Corporate Philosophy Structure (Management Philosophy, Vision, Materiality and Code of Conduct) throughout our domestic and international offices and sites. Furthermore, in FY 3/25, a new program of weekly "Sustainability Morning Briefings" has been implemented across all domestic POC and the group companies' sites, in which participants share specific initiatives aimed at promoting sustainability management. Overseas, we introduced the "Sustainability Awards" in Singapore, through which management formally acknowledges and honors employees for their sustainability initiatives. The above efforts will be extended to our domestic and other international offices starting in FY 3/26.
Another key pillar of sustainability management is embracing respect for individuals and human rights. While making further efforts to ensure occupational health and safety in line with our motto of "Safety as the top priority", we will further advance our specific measures for "Respecting Human Rights and Building Sustainable Supply Chain", which is one of the aforementioned Materiality issues. With regard to respect for human rights, our initiatives in FY 3/25 encompassed the evaluation of improvement plans based on the results of human rights monitoring, along with active engagement in human rights dialogues. Furthermore, our human rights due diligence process, which was primarily targeted for POC Group, was extended to include our business partners. From FY 3/26 onwards, we will implement specific measures tailored to address the issues identified through our extended human rights due diligence process, and carry out regular monitoring of these measures. In an effort to develop sustainable supply chains, we invited our major business partners to complete a self-assessment questionnaire (SAQ) and conducted follow-up visits based on the results. In order to develop sustainable supply chains, it is our responsibility to ensure fair contract pricing which appropriately reflects labor and material costs to subcontractors and business partners. We will undertake the above initiatives so we can build trustful relationships with our subcontractors and business partners to practice sustainable construction activities.
As a human capital strategy to support increasing business volume, we endeavor to secure and foster diverse human resources and promote DE&I to create a workplace where employees with diverse backgrounds, regardless of nationality, gender or field of expertise, etc. can work together on an equal footing. To support employees in taking planned vacations and rest days, we strive to ensure strict compliance with the overtime cap regulations by encouraging the acquisition of two days off per week and maintaining overtime hours within 45 hours every two months. Furthermore, by implementing measures including: 1. promotion of Digital Transformation (DX) by way of proactive use of BIM/CIM and AI, 2. automation and autonomous operation of construction machinery and work vessels, and 3. adoption of precast concrete, we aim to further improve productivity, introduce labor-saving technologies, and enhance support for construction sites.
As for coping with climate change issues, we are promoting Green Transformation (GX) with pioneering spirit, which is part of our corporate DNA. By making continuous efforts to reduce CO2 emissions in construction activities and advancing the construction of offshore wind farms and net zero energy buildings (ZEB), we will actively contribute to achieving carbon neutrality.
Under the slogan of "Sustainability Initiatives Start on Site", Penta-Ocean Construction Group will strive to promote sustainable construction activities from an ESG (Environment, Social and Governance) perspective, by fostering close collaboration with subcontractors and business partners. We would appreciate your continued guidance and support.
