The 20th Anniversary publication of Hanshin Port Construction Co., Ltd., showing the Presidential Message of September 29, 1945.
The 20th Anniversary publication of Hanshin Port Construction Co., Ltd., showing the Presidential Message of September 29, 1945.
In Japan, the Second World War ended on August 15, 1945. Following the war, the country suffered shortages of commodities as well as runaway inflation due to an imbalanced exchange rate. Not only households, but also companies and the government were hard put to make ends meet. Considering these circumstances, and the fact that there was no prospect of utilizing the expanded fleet of dredgers from the wartime years, on September 29, 1945, the President issued message to all employees announced the painful intention to encourage voluntary resignations by employees and others on their own judgment. As a result, 40% of employees (administrative and technical staff) and 55% of technicians (ship and specialized occupations) left the Company.
Following this, in June 1946, GHQ (Office of the Supreme Commander of the Allied Powers) designated Hanshin Port Construction Co. and Yamashita Steamship Co., which was the 100% shareholder of the Company, as restricted companies,*1 that is, companies that were restricted from engaging in independent business activities. The stock of Hanshin Port Construction was placed under the control of the Holding Company Liquidity Committee (HCLC), which was the organization responsible for dissolution of the zaibatsu financial combines. With the termination of war compensation claims, the Company’s special loss due to abandonment of wartime compensation claims reached approximately ¥10 million. However, Hanshin Port Construction Co. was designated as a special accounting company,*2 thereby freezing this loss. This gave some hope of rebuilding the Company at some later date.
Having been designated as a restricted company and a special accounting company, Hanshin Port Construction Co. grappled with plans for reconstruction and reorganization. The employees of the Company and their relatives undertook all shares owned by Yamashita Steamship Co., and the designation as a restricted company was lifted in June 1949.
Where the frozen special loss was concerned, the Company succeeded in selling the dredger Suzuka-maru and used the proceeds to eliminate the loss. As a result, the designation as a special accounting company was also lifted in July of the same year.
In addition to this appropriate response to the postwar process, the Company also received an order for improvements on the Tone River. It was this order that rescued the Company from the crisis of the postwar years. Participation in construction was approved in March 1946, and two dredgers were returned to service and re-commissioned. This was the first glimmer of hope for the Company in the postwar period.
The Company also received orders for reclamation works at Kojima Bay (Okayama Pref.), reconstruction at Ajiro Port (Tottori Pref.), dredging at Fushiki Bay (Toyama Pref.), sluice gate construction on the Tone River Ryousouyousui irrigation channel (Chiba Pref.), seawall construction at Kochi Port (Kochi Pref.), and other projects. While this was a gradual process, it enabled the Company to expand its presence across Japan. Thus, the Company won out in the fierce struggle for survival of the postwar years, and was reborn from the depths of this life-or-death period.
*1 Restricted company: Based on Imperial Ordinance No. 657 of 1945, Restrictions for the Dissolution of Companies, the “Restricted Companies Act” was established in November 1945 in order to restrict arbitrary changes of capital, diversification or changes in assets, etc. of certain zaibatsu-related companies and others. The assets of companies designated as restricted companies were frozen, and they could not exercise rights over those assets without the approval of the Ministry of Finance (at the time). In December of the same year, 354 companies were designated, and additional companies were also designated thereafter in 8 stages, including companies not affiliated with zaibatsu.
*2 Designated accounting company: Related to the end of the war compensation, the Company Accounting Temporary Measure Law was promulgated in August 1946 to promote reconstruction and reorganization from the viewpoint of company accounting. Under this law, companies with capital of ¥200,000 or more, which had the right to receive war compensation or possessed external (overseas) assets, were designated as special accounting companies. Designated special accounting companies as of August 11 of the same year were required to establish both old and new accounts; for accounting purposes, assets necessary for the continuation of business and postwar recovery and new development were classified as new accounts, and other assets were classified as old accounts. This measure prevented the effects of the termination of war compensation from spreading to new accounts. Next, the Business Reconstruction and Adjustment Law was promulgated in October of the same year, and special accounting companies were required to take special losses for the losses arising from the end of war compensation and the loss of external assets, to be balanced with the profits from old accounts, reserves, etc. The special accounting companies drew up reconstruction and reorganization plans, treating amounts to be borne in accordance with a certain order, and these plans were implemented with the approval of the competent Cabinet Minister.
|August 1945||End of the Second World War|
|November 1945||Head Office moved to Kawaguchimachi, Nishi-ku, Osaka|
|March 1946||Received order for Tone River improvement works|
|June 1946||Designated as a restricted company|
|November 1946||Ajiro Office opened at Ajiro Bay, Tottori Prefecture|
|June 1949||Designation as a restricted company lifted|
|July 1949||Designation as a special accounting company lifted. Ceremony marking the 20th Anniversary of the foundation of Hanshin Port Construction Co., Ltd.|
The period from around 1950 was the run-up to Japan’s era of high economic growth, which began around 1955. Among important factors, inflation was controlled as a result of the establishment of the so-called Dodge Line and the fixed dollar-yen exchange rate ($1=¥360), and the Korean War, which began in June 1950, spurred an economic boom driven by wartime procurement.
Against the background of this favorable turn in the economic environment, the Company’s business also expanded by degrees. During fiscal year 1947, the value of orders received for construction was ¥110 million, but only two years later, in FY 1949, this had increased four-fold, to ¥429 million. As a result, it was possible to restore shareholders’ dividends only 5 years after the end of the War.
To respond to increasing demand for dredging and reclamation, the Company expanded its equipment, for example, adding 3 dredgers in 1950, followed by another 2 the following year. From the same year, the Company also began regular hiring of new college graduates, reorganized its internal organization, and modernized its accounting system.
In addition to orders from government agencies at the time, the Company carried out a succession of large-scale projects for private companies. This work included preparation of plant sites, dredging of ports, etc. at Fuji Iron and Steel Co., Ltd. Hirohata Works (now Nippon Steel and Sumitomo Metal Corporation), Maruzen Oil Co. Ltd. Shimotsu (now Cosmos Oil Co., Ltd.), and Kawasaki Steel Corporation Chiba Works (now JFE Steel Corporation), among others.
Although still largely engaged in offshore work, the Company also resolutely took on the challenge of construction on land. Timed to coincide with the opening of the Amagasaki Boat Race Course, the Company completed most facilities in a crash construction project of only 3 months. This was the first postwar job with a contract value of more than ¥100 million. During the same period, the Company also carried out various other construction projects which are particularly notable in its corporate history; these include construction of the Sagadani Dam in Tottori Prefecture and jacking-up construction of the Takatsuno Bridge in Shimane Prefecture.
|March 1950||Shareholders’ dividends restored.|
|October 1950||Paid-in capital increased to ¥10 million.|
|August 1952||Head Office moved to Fushimi, Higashi-ku, Osaka.|
|October 1953||Capital increased to ¥20 million.|
From 1955 onward, Japan enjoyed a long period of expansion, which included the Jinmu Boom and the Iwato Boom, during which the country achieved high economic growth. Likewise, in the construction industry, the scale and budget of port and harbor infrastructure projects grew dramatically as a result of the 5-Year Port and Harbor Construction Plan of 1956, the Act on Special Measures concerning Construction of Specified Port and Harbor Facilities of 1959, and other initiatives, marking the advent of the so-called dredging and reclamation boom.
Although port and harbor construction companies (marine contractors) began building large-scale, high efficiency dredgers, Hanshin Port Construction led others in building the dredger Fushimi-maru (designed by this Company) in 1957 and the Chiyoda-maru the following year. The Company also contracted for long-term charters of two other large-scale dredgers, the Matsushima-maru and the Taian-maru, supporting the growth of its business.
As a distinctive feature of business development in this period, the reclamation works at Mizushima Port in Okayama Prefecture must be mentioned. The aim of this project was to attract a steel maker, oil company, and others by creating a large-scale site in the Mizushima District, which is blessed with excellent siting conditions. The Company carried out the overall planning for the project and operated its work ships at full pitch, steadily digesting the enormous volume of work. The result was one of the great coastal industrial zones that would serve as the foundation for Japan’s period of high economic growth.
Another event which must not be forgotten in the history of Toyo Construction is the Nagara-go shipwreck disaster caused by Typhoon Vera (known in Japan as the Ise Bay Typhoon) of 1959. This typhoon resulted in 5,098 dead or missing and caused the most serious typhoon damage in Japan since the Meiji Period (1868-1912). The typhoon struck directly in the Kiso Three Rivers area where the Company was engaged in dredging operations, and the roiling waters swallowed up 6 persons, including Captain Daimon and his crew, who were desperately struggling to save the ship. The bodies of two victims were recovered in October, but there was no trace of the remaining four, who were declared dead in December. A company funeral was held on December 8 to mourn the spirits of the 6 men. In 1961, the Ministry of Construction (now Ministry of Land, Infrastructure, Transport and Tourism) erected a monument to the victims of the Ise Bay Typhoon in Matsukage, Nagashimacho, Kuwana City, Mie Prefecture, where Toyo Construction offers flowers on the anniversary of the men’s deaths each year.
|April 1955||Capital increase to ¥60 million|
|November 1956||Tokyo Branch Office upgraded to Tokyo Sales Office, strengthening sales in eastern Japan.|
|October 1957||Capital increase to ¥120 million|
|November 1957||Construction of the electric pump type dredger Fushimi-maru.|
|July 1959||Ceremony commemorating the 30th Anniversary of foundation. Adoption of a company song|
|September 1959||Ise Bay Typhoon sinks the Nagara-go, Kiso-go, and Hakozaki-maru. Six employees die in the line of duty.|
|October 1959||Capital increase to ¥250 million|
Although dredging and reclamation projects continued to increase during the first half of the 1960s, competition for orders became extremely fierce, as all companies increased equipment, etc., and the value of dredging orders received by the Company showed a decreasing tendency. In this business environment, Mr. Masayoshi Haga was named the 3rd President in 1962, and on assuming office, he announced that “while port and harbor facilities are the Company’s core business, we will also expand into general construction such as river projects and highways.” With this, the Company began the transition from a contractor specializing in dredging and port and harbor construction to a general civil contractor. On the other hand, as dredging projects became progressively larger in scale, the Company took decisive action by adopting a scrap & build approach to dredgers. In 1964, Hanshin Port Construction Co. constructed the world’s largest class dredger of the time. This 8,600 horsepower vessel, called the No. 5 Tokai-maru, enabled dredging to a depth of 32 m and was equipped with innovative new technologies, including a gas turbine engine. As shown by this example, the Company was able to survive and grow in spite of excessive competition by anticipating changes in the business environment.
Two important topics from these years were listing on the stock market and the change of the company name.
At the time, all stock was held by the Directors and employees and their relatives. However, in September 1961, the Company offered stock on the Osaka over-the-counter (OTC) market to pave the way for a leap into the future, build increased trust, and support the modernization of its corporate management, which included demand for capital, for example, for investment in large-scale dredgers. In October of the same year, the second section of the Osaka Stock Exchange was created, and simultaneously with this, Company’s stock was also listed. Thereafter, in August 1964, the Company was designated as a first section company on both the Osaka and Tokyo Stock Exchanges, further enhancing its trust.
As the background to the name change, the Company had announced a policy of strengthening its advance from the dredging and port and harbor construction into land-based civil construction, including bridges, river improvement, and agriculture and forestry. However, the original company name, “Hanshin Port Construction,” gave the strong impression that its areas of business and geographical range were limited, and a growing number of people pointed out that this was a serious obstacle to winning orders for land-based projects.
Based on the policy of a “name with a high tone and universality,” the name Toyo Construction Co., Ltd. was decided unofficially, and was then approved at the regular meeting of shareholders on May 28, 1964. With this decision, Toyo Construction embarked on a new stage in its history.
|May 1960||Tokyo Sales Office upgraded to Tokyo Branch.|
|July 1961||Head Office relocated to Koraibashi, Higashi-ku, Osaka.|
|September 1961||Capital increase to ¥550 million|
|October 1961||Listed in the second section of the Osaka Stock Exchange.|
|May 1962||Mr. Masayoshi Haga becomes President.|
|October 1962||Listed in the second section of the Tokyo Stock Exchange.|
|October 1962||Capital increase to ¥1.1 billion|
|May 1964||Company name changed to Toyo Construction Co., Ltd.|
|August 1964||Listed in the first sections of both the Tokyo and Osaka Stock Exchanges.|
|September 1964||Construction of the gas turbine electric pump dredger No. 5 Toukai-maru|