Kumagai Gumi : Corporate Report 2021（2/2）

On-siteManager

Work place manager Takahiro Machiya

Value creation initiatives

On-site work

Cotter joint

Overview of construction

Joints embedded in floor slabs

initiatives creation Value

Special 1 Feature

Bringing innovation to expressway renewal construction The Challenge of the Cotter Floor Slab Method for Bridges

Expressways are key infrastructure that serve as the arteries of a society.

The aging of expressways has become an issue in recent years, with renewal work planned in many locations. Through advanced technology and outstanding Worksite Excellence, Kumagai Gumi contributes to solving such social issues.

Name of	Tohoku Expressway Towada Jurisdiction
construction work	Expressway Renewal Work
Orderer	East Nippon Expressway Company
	Limited, Tohoku Branch
Construction period	January 8, 2019 to March 22, 2022
	(39 months)
Details of	Floor slab replacement: 5 bridges;
construction	Tunnel repair: 21 tunnels
Contractor	Kumagai Gumi/SHO-BOND Corporation
	joint venture
	* Shared construction-type joint venture
	Kumagai Gumi: Floor slab replacement;
	SHO-BOND Corporation: Tunnel repair

Installation of a massive floor slab in about 15 minutes

From the construction of Tengu-bashi Bridge (heading toward Tokyo), the fourth bridge, in June 2021, we have

Connecting the joints

Contributing to society and the environment with outstanding Technology Strength and Worksite Excellence

Addressing the social issue of aging expressways

completely introduced the Cotter floor slab method. The cotter joints, too, have evolved into a more compact and light form. Work was performed at night, due in part to

Machiya adds that there are many other merits of the Cotter Floor slab method that can be appreciated only at the worksite. The greatest of these is safety

The Tohoku Expressway plays a vital role as the main transportation artery running through eastern Japan. Large-scale renewal projects are planned to address deterioration of the expressway. The renewal work being carried out between Hachimantai in Iwate Prefecture and Hirakawa in Aomori Prefecture, a stretch under the jurisdiction of the Towada Management Office of the Tohoku Branch Office of East Nippon Expressway Company Limited, is part of such a project. Kumagai Gumi is in charge of replacement work on five bridges in this project.

"This construction work will replace floor slabs laid on the bridge girders with highly durable precast PC floor slabs. In this project, Kumagai Gumi is undertaking full- scale adoption of revolutionary new technology,"

says On-site Manager Takahiro Machiya. The proprietary new technology that he speaks of is the Cotter Floor slab method for bridges.

This method roughly doubles the speed of construction and halves required construction staff compared with conventional methods, achieving a major increase in efficiency.

Traditional floor slabs have rebar joints at both ends; at the site, concrete must be cast on these portions, a task requiring considerable labor and skill.

On the other hand, Cotter floor slabs use cotter joints developed

particularly for this connecting portion. This enables joining with a joint width of only about 2 cm, making on- site concrete casting unnecessary.

Precasting 99% of the floor slabs also improves the quality of the concrete. Its outstanding performance, including the capability for partial replacement, has won the Innovative Technique Award of the Japan Society of Civil Engineers.

coordination with other processes.

At the brightly lit work site, a huge cotter floor slab is suspended from a crane and is installed on the bridge girders under the direction of young engineers. The position and the height are adjusted to a high precision of scant millimeters. When installation is complete, the workers insert wedge pieces into the joints and fix them with bolts.

On-site Manager Machiya describes the work.

"We've become quite proficient in the work as we've made improvements on site. The time required to install one Cotter floor slab is about 15 minutes. At Tengu- bashi Bridge, we install five slabs at once, so the work will be completed in about 1 hour and 20 minutes."

management.

In conventional construction methods, concrete is cast on-site. This involves many tasks that require skill, such as creating concrete placing form and inserting reinforcing steels. This created considerable tensions over safety management. With cotter floor slabs, however, this work is no longer needed. Moreover, the elimination of councrete placing form has enabled a major reduction of waste, contributing significantly to environmental aspects.

The total length of Japan's expressways is about 9,071 km (as of March 2021), with renewal projects planned for many locations. Kumagai Gumi is also undertaking development of new cotter floor slabs for urban expressways to meet such societal needs.

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The Kumagai Gumi Group Corporate Report 2021 33

Kumagai Gumi only

Value creation initiatives

Diverse Human Resources

Fundamental concepts of human resources	Related information P13 Number of employees Number of female managers

Workplaces where women can play active roles

From December 2015, we increased our hiring of

Status of reemployment after retirement

We operate employment-related systems under the

We recognize that there are concerns over a declining workforce in the construction industry, and that securing human resources will become more difficult. Under these circumstances, Kumagai Gumi is actively undertaking the preparation of environments and systems that allow diverse human resources to perform their capabilities to the maximum. We are working to promote active participation by women, the employment of persons with disabilities, and reemployment after retirement to improve our employment environment and make it a foundation that supports management.

About recruitment

Kumagai Gumi works to resolve the advancing age of employees and imbalances among generations, and engages in recruitment activities with an awareness of diversity.

Based on information including future business performance trends, we formulate recruitment plans that take into consideration employees' total number, job types, age distribution, and other factors 5 and 10 years ahead, and engage in hiring of new graduates and mid-career employees.

In fiscal 2019, we set up a job return system. We are creating an environment by which retired employees who meet certain conditions can join the company again, to make use of experience gained at other companies.

women and formulated and enacted an action plan to improve the workplace environment, in line with the Act on Promotion of Women's Participation and Advancement in the Workplace.

Status of employment of persons with disabilities As a new initiative for the employment of persons with disabilities, we offered workplace training for students from special support education schools. We included site tours in the training so the students could gain familiarity with the construction industry. Accepting trainees in multiple departments also helped change the mindsets of employees.

Achievements of the Action Plan for Promotion of Participation by Women

(Period of formulation: January 2021 to December 2022)

premise of employment until the statutory retirement age of 65, and contribute to the expansion of reemployment of retirees who wish to continue working. For Kumagai Gumi, the technical and sales capabilities of retirees constitute valuable assets that we hope to pass down to the next generation without interruption.

To energize employees and organizations alike, we are enhancing employee benefits to create comfortable work environments. As of April 2021, 353 retirees are working in the company.

Employment rate of persons with disabilities

Kumagai Gumi only

Statutory employment rate: 2.30%

initiatives creation Value

Number of employees and average age/years of service Kumagai Gumi alone

			FY2016	FY2017	FY2018		FY2019	FY2020
Number of employees	(persons)		2,305	2,382	2,497		2,578	2,620
Average age	(years)		45.2	45.2	44.9		44.5	44.4
Average years of	(years)		20.7	20.5	19.9		19.5	19.5
service
As a diversity company				Related information P48 Promotion of work style reform

Action plan	Performance at
the end of FY2020
Increase in the percentage of women	24.4%
among new graduate hires to 25% or more
Increase in the number of female	58
managers by 10% from the current level
(54 as of April 2020)
70% or higher rate of acquisition of	74.3%
childbirth-related leave by men

2.50 %	(from March 1, 2021)

2.00	2.22	2.12	2.09	2.14
	2.00

1.50

June	June	June	June	June
2017	2018	2019	2020	2021

Kumagai Gumi recognizes the diversity of its employees and promotes diversity by creating environments that let employees exert their capabilities to the maximum, which leads to increased corporate value and growth of the company.

Promotion structure

The Diversity Promotion Group and the Work Style Reform Promotion Office of the Human Resources and General Affairs Department were integrated in 2021 to establish the Diversity Promotion Department. This action is aimed at deepening diversity and strengthening our competitiveness.

We established a Diversity Promotion Committee, composed of General Managers of divisions and chaired

by the President, and a Work Style Reform Working Group, in which representatives of divisions examine specific systems and measures suited to Kumagai Gumi. Through these, we are promoting diversity and work style reforms horizontally across the company.

Diversity Promotion Committee

Promotion of diversity Main initiatives in fiscal 2020 and evaluation by society

2020	October	Joined the IkuBoss Enterprise Alliance operated by the NPO Fathering Japan, aimed at creating
		environments where diverse human resources can work comfortably and fostering bosses who support
		team members in achieving work-life balance.
		Held a roundtable discussion by male employees who have taken childcare leave, to promote leave-
		taking
	November	Received Bronze rating in the PRIDE Index that evaluates companies' LGBTQ efforts, in recognition of
		efforts including establishment of an LGBTQ consultation desk and conducting of awareness surveys.
2021	February	Obtained the third level of Eruboshi, a certification from the Ministry of Health, Labour and Welfare
		related to the promotion of active participation by women.
	March	Selected by the Ministry of Economy, Trade and Industry for inclusion among the fiscal 2020 New
		Diversity Management Selection 100, which showcases advanced efforts of companies that connect
		diversity promotion to management results.

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Value creation initiatives

Diverse Human Resources

Development of human resources

Training engineers with a commitment to quality

Aiming to develop human resources under the idea of "Enrich the self, create the future, and support people," Kumagai Gumi undertakes a variety of initiatives. In April 2019, we formulated the Human Resources Development Plan that sets our directions in this area.

Our corporate philosophy structure and vision for human resources

Conceptual structure of Kumagai Gumi

Our company performs job rotation to let

Job rotation employees acquire wide-ranging knowledge and ways of thinking through experience in

different work duties at multiple workplaces.

Through daily work, superiors and senior employees guide and train subordinates and junior employees by consciously,

OJT systematically, methodically, and continuously providing the knowledge, skills,

We believe that the highest quality is achieved through an integration of quality assurance systems, human resources who are committed to quality, and effective processes. Kumagai Gumi continuously develops human resources based on its human resource

Employee training

We conduct two-month practical training for construction

development system, and enhances quality in every process through the steps of planning (Plan), execution (Do), confirmation/inspection (Check), and review/ improvement (Act) under our quality assurance system.

OFFJT education (Building construction staff)

In order to learn about operation methods able to

initiatives creation Value

Promote the realization of our Group VisionFormulate

an image of employees as

"Kumagai Gumi's vision for human resources"

Insight, Onsite, Farsight

Enhance our unique Worksite

Group Vision Excellence, create unique value ("Quality that Inspires Happiness"),

(Kumagai Gumi's and continue to support customers vision for itself) and society throughout

every era

Vision for human resources

(Vision expected of all employees)

and attitudes necessary for executing work duties.

We conduct planned education drills

Group and training to complement OJT, drive

training self-development, and provide expert knowledge.

We encourage the acquisition of official qualifications such as Professional

Support Engineer and 1st-Class Architect, conduct

drawing, with dormitory stays, for employees in their third to twelfth years in construction divisions. To improve our quality control capabilities, we hold construction technology training workshops for learning about quality control in frame work and equipment/ electrical workshops for learning about equipment and electrical work.

express on-site conditions matched to processes, we conduct group education on basic operations of ARCHICAD and Smart CON Planer for building construction staff at least twice a year at each branch, using real equipment.

Roles and duties

(Expectations and responsibility for results borne by each person in the workplace)

Our Company's Code of Conduct

(Base and foundation for everything)

for self- supplementary lectures and mock development examinations, and support and promote

self-development that leads to employees' skill advancement.

Training of rank structure

Manager position

Beginning manager position

Guidance position

General position

Year-specific training	Training at time of promotion	Role training	Selective training
		Newly appointed line director training	Next-generation executive development training
	M2 promotion training
		Evaluator training
	Newly appointed manager training
	Beginning manager training
	Newly appointed instructor training
		OJT trainer training
3rd-year training
Young employee follow-up training
New employee training

Training for partner companies

The Yuuei Kyoryoku Kai association conducts various types of training with the aim of improving capabilities related to QCDSE (Quality, Cost, Delivery, Safety, and Environment).

Technology presentation

To share information on ever-evolving building construction and civil engineering technologies and make full use of these in our everyday work, we hold presentation meets to broadcast technologies we have developed and new technologies introduced at workplaces company-wide.

FY2020 attendance status of training by rank			Number of persons undergoing
							training of rank
	By target	Eligible no.	No. of	Training	Total training hours
Name of training	of trainees	trainees	rate			1,000 people
Category	Total hours	Training hours
		(persons)	(persons)	(%)	per person

Newly appointed line director training	Role	20	18	90	558	31	800
M2 promotion training	Time of	48	45	94	720	16
promotion
Evaluator training	Role	198	164	83	1,312	8	600
Newly appointed manager training	Time of	52	49	94	784	16
promotion
Beginning manager training	Time of	36	34	94	544	16
promotion	400
Newly appointed instructor training	Time of	52	50	96	800	16
promotion
OJT trainer training	Role	130	130	100	1,040	8	200
3rd-year training	Year-specific	124	124	100	1,798	14.5
Young employee follow-up training	Year-specific	117	115	98	6,900	60	0
New employee training	Year-specific	118	118	100	22,184	188	FY2016	FY2017	FY2018	FY2019	FY2020

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The Kumagai Gumi Group Corporate Report 2021 37

Architectural Environment & Engineering Department

Ayana Fuchizaki

Value creation initiatives

A hybrid structure with medium- to high-rise wood structures in mind

"When I heard about this project, I thought I definitely wanted to work on it. One reason was because it was the rebuilding of our traditional head office, and another was the wood structure,"

says Tetsuji Sabe, On-site Manager for the project. The most significant feature of the new main office

building is its hybrid wood

and steel frame structure. We

are adopting Insulated Fire-

Resistant λ-WOOD® (Lambda

WOOD), a wooden fireproof

structural member developed

by our company, for the first

time in columns and beams.

We are also pursuing an

urban wood structure capable

On-site Manager

of cross laminated timber (CLT) earthquake-resistant walls.

"We need to use a construction method suited to wood structures, which differ from the steel frame structures that we often handle. From this point onward, it was Kumagai Gumi's first experience with this." (Sabe)

The team carried out assembly of the wood structure in collaboration with Sumitomo Forestry engineers who have a wealth of experience with wood residential structures. This project, however, involved an office building. The beams have a long span, as much as eight meters. As structural members on this scale are not found in houses, it was a novel experience for the project members, who learned and cultivated knowledge on- site. Their experiences will be accumulated as Kumagai Gumi technology that will support the next generation.

initiatives creation Value

Special 2 Feature

A new challenge in the region of our founding

Aiming to Achieve Medium- and large scale wooden construction

Tetsuji Sabe	of withstanding snow loading
in winter through the use

Achieving "Nearly ZEB" with consideration of office workers and the environment

Since our founding in 1898, Kumagai Gumi has maintained its Headquarters in Fukui, our place of origin. The construction of a new Headquarters building with a wood and steel frame hybrid structure is underway, and will mark the history of the new Kumagai Gumi.

Another key feature of the new head office building is that it is a Net Zero Energy Building (ZEB), a concept attracting attention as an initiative aimed at a decarbonized society. The aim of a ZEB is to reduce the balance of the building's annual primary energy consumption to zero. The head office building project achieves "Nearly ZEB." Ayana

and combined energy saving with energy creation to reduce the building's primary energy consumption to 17%." (Fuchizaki)

Overview of construction

Name of	New construction of the Kumagai Gumi
construction	Fukui Head Office
work
Location	2-6-8 Chuo, Fukui, Fukui Prefecture
Construction	September 2020 to July 2021
period
Structure	Steel frame + wood, 4 floors above ground
	Fire-resistant building

ZEB implementation technology 

Architecture	Sunlight shielding, daylight utilization (light
	shelf), high insulation, wood materials, etc.
Plumbing	Low-use water fixtures, use of rainwater
system
Air	High-efficiencyair-source heat pump,
conditioning/	latent heat sensible heat separation
ventilation	air conditioning, floor radiant air
	conditioning, BEMS, etc.

Fuchizaki of the Architectural Environment & Engineering Department, who took charge of these technologies, talks about this.

"The new head office faced a lot of restrictions in aiming for ZEB, including the Sea of Japan-type climate peculiar to the Hokuriku region, and the small building site. We brought together the technologies of Kumagai Gumi

Creating bright, healthy spaces for the office workers is another important concept of the new head office. We also used Echizen Japanese

paper and cedar wood from Fukui Prefecture in the interior, to create an office that is rooted in our place of origin and that moves in step with the community.

Uses	1F: Entrance hall, conference rooms
	2F: Exhibition room, meeting space
	3F, 4F: Offices
Total floor area	1,190.85m2

Electricity	High efficiency transformer, lighting control,
	storage batteries, solar power generation
	(Light-passingdouble-sided power
	generation type)

Initiatives for wooden architecture projects

Olympic Village Plaza	Hyuga City Hall
(Completed: 2020; Construction site: Tokyo)	(Completed: 2019; Construction site: Miyazaki Prefecture)

A project at our place of origin that marks the history of Kumagai Gumi

The history of Kumagai Gumi began in 1898 when our	were moved to Tokyo in 1964, the head office remained
founder Santaro Kumagai undertook construction of	in Fukui. As the main office has aged, we are now
the Shikununo Power Station, the first power plant in	rebuilding it.
Fukui Prefecture. Even after Headquarters functions

An all-Japan project by the Tokyo Organising Committee of the Olympic and Paralympic Games, this facility was constructed using wood loaned by 63 local governments nationwide. Wood from different regions is used in various locations of the building to express the diversity and harmony that are basic concepts of the event.

Following the event, the wood will be removed and returned to the local governments for use as legacy materials in local public facilities or other works.

Olympic Village Plaza at the time of private viewing Before completion and interior work (January 2020) ©Tokyo2020

About 200,000 pieces of wood, mainly cedar and cypress, are used inside and outside the government building.

The project received the BCS Prize from the Japan Federation of Construction Contractors as well as the Forestry Agency Director- General's Award in the 2019 Timber Utilization Excellent Facility Contest.

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Value creation initiatives

Technology to Create Social Value

Technology Development System and Policy

TOPICS Development of environmentally considerate technologies

Related information P38-39Special Feature 2

Technology Development System

Kumagai Gumi's Technical Research & Development Division, Civil Engineering Management Division, and Building Management Division collaborate on the

			Planning Group
Technical Research &
		Technical Research &
Development Division			Development Institute
			New Technology Innovation Center

Insulated Fire-Resistantλ-WOOD® (Lambda-WOOD) acquires Ministry certification for 1 to 3 hours fireproof performance

creation Value

development of technologies. We set out policies related to technology development, research topics in new business domains, and other matters through the Technology Development Management Subcommittee, and carry out development of technologies that directly connect to business.

Civil Engineering
	Civil Engineering Technology Department
Management Division
Building
	Building Engineering Department
Management Division
	Technology Development
		Management Subcommittee

One challenge in achieving medium- to large- scale wooden construction is fire prevention and fire resistance performance. The Building Standards Act stipulates the fire resistance performance of major structural parts, varying with the number of floors of a fire-resistant building. Constructing a high-rise wood structure without constraints related to the number of

columns and beams and 1 to 2 hours in CLT floors and walls.

Insulated Fire-Resistantλ-WOOD layers a hard gypsum board and an insulating fire- resistant panel on the "fire-stopping layer" installed around the load-bearing structural member (pillar) to reduce the thickness of the member. This allows free selection of surface

initiatives

Technology development under the Medium-Term Management Plan

The Kumagai Gumi Group's Medium-Term Management Plan sets out areas of focus related to technology development as follows, to strengthen our management foundation.

Research and development that contributes to a recycling-based, decarbonized society

Technology development in response to the digital society

Technology development that contributes to the advancement of various functions in construction

We believe that basic research aimed at a decarbonized society, technology development in renewable energy or other fields aimed at a sustainable society, and future- oriented initiatives in domains such as smart cities will lead to opening up new business domains for us. We will also engage in co-creation with other companies on production systems that use robotics, AI, and other technologies to contribute to innovation and the advancement of various functions in construction.

Patent-related measures

Technological development

Kumagai Gumi has established an R&D vision and mission to achieve R&D with the period of the Medium- Term Management Plan and beyond in sight, and is formulating a technology development policy.

Research and development vision

Achievement of communities for sustainable and enriching living

Mission

Develop technologies that aid the world and bear responsibility for the future across the ages

Technological development policy

Contribution to the achievement of a decarbonized

and recycling-oriented society

Contribution to advanced construction through digitalization

During the three-year period of the plan, we will carry out research and development across the company while promoting technology development that supports our management foundation.

Related information P13 Number of patent applications

floors requires a demonstrated fire resistance of 3 hours for columns and beams and 2 hours for floors and walls.

In evaluation tests of fire resistance, heating that simulates a fire is performed for 1 to 3 hours while a constant vertical load is applied, to confirm that the load-bearing member does not carbonize between the time that the heating is stopped and the time that the fire is extinguished naturally.

Developed by Kumagai Gumi, Insulated Fire- resistant λ-WOOD was certified in March 2021 by the Minister of Land, Infrastructure, Transport and Tourism for use in all fire-resistant structures as a wood fire-resistant structural member with 1 to 3 hours of resistance in laminated lumber

finishing material.

Insulated Fire-Resistantλ-WOOD (pillar) is being used in the construction of our new Fukui head office.

Specifications for Insulated

Fire-Resistantλ-WOOD (pillar)

Load-bearing member

Fore-stopping layer ● Hard gypsum board

• Insulated fire-resistant panel
• Hard gypsum board

Surface finishing material

Our patent applications filed in fiscal 2020 were mainly related to materials, structures, and fire resistance in the field of wood, accounting for about 20% of our total number of applications. The number of patent applications related to caregiving assistance and movement assistance is also increasing, accounting for about 10% of our total number of applications.

In this area, to prepare for overseas expansion of the independent walking aid developed by Kumagai Gumi (refer P9), we are acquiring intellectual property rights

regarding patent rights, design rights, and trademark rights not only in Japan but also overseas.

Reflecting the increase in joint research and joint development cases with private companies, universities, and other research institutes, about 35% of the total number of applications are joint applications. We will continue strengthening collaboration with other companies and promoting the Kumagai Gumi Group's patent measures.

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