Hazama to explore tieup options

Construction firm Hazama Corp. will explore a comprehensive tieup with other companies rather than a merger or acquisition to cope with intensifying competition in the industry, its president said in a recent interview.

“The priority for us is to try to keep up with the times on our own and exert an all-out effort to survive,” Hazama chief Fumiya Yamato told Kyodo News. “A comprehensive tieup may be more appealing than a merger or acquisition.”

The nation’s construction industry is undergoing a wave of consolidations amid the prolonged economic slump. Mitsui Construction Co. and Sumitomo Construction Co., for example, will merge on April 1.

Yamato said Hazama, under a five-year restructuring plan, has repaid its debts for the initial two years and is expected to keep to the plan’s schedule.

“We had expected that the final two years would be easier than the initial three years,” he said. “But due to the prolonged economic slump and the decline in spending on construction projects, our business situation is getting more severe.”

Commenting on earnings for the half year through Sept. 30, Yamato said the company will be able to achieve targets for orders, revenues and operating profit.

Consolidated revenue for the period is estimated to come to 161 billion yen, while operating profit is predicted to come to 4.9 billion yen.

Yamato said Hazama is trying to obtain additional sources of revenue by utilizing its expert technologies, such as those related to purification of contaminated soil and antipenicillium.

The company is also trying harder to slash borrowings and bad assets under the restructuring plan, he added.