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Sustainability Management

Message from the president

Penta-Ocean Construction (POC) celebrated the 127th anniversary of the company’s founding. Founded in 1896 as Mizuno-gumi in Kure City, Hiroshima Prefecture, we have expanded our business areas from initial marine civil engineering to land civil engineering and building construction. Starting with the Suez Canal Widening Project in 1961, we have been involved in many milestone projects overseas, mostly based in Singapore, since our first entry to the market in 1964. At present, our three business units of domestic civil engineering, domestic building construction and overseas, have roughly the same output in terms of net sales. We have developed into a company where these three business units contribute to profits in a balanced manner.

In the business environment surrounding the construction industry, we expect to benefit from robust public investment in the national resilience, etc., as well as solid private investment particularly in the logistics, urban redevelopment and "facilities and equipment investment from the economic security perspective". Outside Japan, our overseas business hubs in Singapore and Southeast Asia enjoy the ever-increasing infrastructure demand. However, we need to monitor high price of construction materials, global geopolitical uncertainties and financial market trends.
Under the previous Medium-Term Management Plan (FY 3/21 - FY 3/23), we fell short of our performance targets because of the significant construction losses we had suffered in overseas projects. However, thanks to the orders received for the largest-ever scale projects both in the Domestic Civil Engineering and the Building Construction Business Units, our projects at hand at the beginning of FY 3/24 exceeded JPY 1 trillion. As several large-scale projects including the above become in full swing both at home and abroad, we expect to achieve the record-high sales and profits under the current Medium-Term Management Plan (FY 3/24 - FY 3/26), which was launched in FY 3/24.
In order to drive sustainable corporate growth, we must, above all else, reaffirm our full commitment to tackling "Sustainability" issues from a global perspective in all our business and corporate activities. Under the new Medium-Term Management Plan, our previous CSR management with focus on ESG extended its reach. Our new corporate vision outlines POC's aspiration of becoming "A genuine global general contractor who practices sustainability management". In an attempt to achieve the above vision, we have identified the followings as our eight materiality issues associated with Environment (E), Social (S) and Governance (G) criteria: 1. Responding to climate change issues (E), 2. Creation of a rich environment (E), 3. Construction of high-quality social infrastructure and buildings (S), 4. Enhancing technology development and technical capabilities (S), 5. Promotion of diversity and inclusion (S), 6. Respecting human rights and building sustainable supply chain (S), 7. Ensuring occupational health and safety (S), and 8. Promotion of effective governance (G).
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. In May 2023, we revised and released the Code of Conduct. It outlines the standard behavior requirements as a member of society and defines the compliance framework to abide by for each executive and employee of POC Group. We will pursue fair and honest corporate activities through exerting further efforts to ensure strict compliance with laws and regulations, fair competition, management transparency and accountability. Another key pillar of sustainability management is respect for humanity. While making further efforts to ensure occupational health and safety with safety as the top priority, we have also started incorporating specific measures to work on one of the aforementioned Materiality issues of "Respecting human rights and building sustainable supply chain". We established the Human Rights Committee in May, formulated and released the Human Rights Policy in June, and started the human rights due diligence initiatives primarily targeted for POC Group. In November, we formulated and released the "Sustainable Supply Chain Policy and Guidelines".
Furthermore, to foster a society where people with diverse backgrounds thrive, we promote Diversity and Inclusion initiatives. We endeavor to create a workplace where diverse employees, regardless of gender or nationality, can work together with mutual respect and enthusiasm. Also, we incorporate initiatives to advance Work Style Reform. Amid the increasing business volume, we strive to adapt to the new overtime cap regulations, which will be enforced in April 2024. As we view the improvement in productivity to be the key component in successful Work Style Reform, we strive to encourage technological innovation and management reform by way of Digital Transformation, or DX. As for coping with climate change issues, we are promoting Green Transformation, or GX, with the pioneering spirit that is part of our corporate DNA. By making continuous efforts to reduce CO2 in construction activities and advancing the construction of offshore wind farms and net zero energy buildings (ZEB), we will contribute to the achievement of carbon neutrality.

At POC Group, not only do we strive to deliver reliable safety and quality backed by advanced technologies in our construction business activities, but we will also endeavor to tackle all sustainability issues from an ESG perspective. We believe that our genuine commitment to sustainable social development will ultimately provide a path to achieve both sustainable corporate growth and corporate value enhancement. We would appreciate your continuous guidance and support.



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