KUMAGAI GUMI COMPANY, LTD. History

Company History:

Santaro Kumagai began his career in construction in 1898 as an employee of a private contracting firm. In 1902 Kumagai undertook his first independent project, the Kyoto Electric Power station. When it was completed Kumagai had proved himself a competent manager, capable of resolving complicated design and materials problems. Through subsequent projects, such as the Nakagawa Canal in Nagoya, Kumagai found his expertise in ever greater demand. His still small but growing company was selected to construct the Sanshin Railway (now the Iida Line of the Japanese National Railways). Sanshin was a difficult seven year project which required the development of a new tunneling method.

The rapid growth and expansion of the Japanese economy, particularly after World War I, created a large demand for new buildings and other structures in Japan. During this period in his career, Santaro Kumagai directly benefited from the nation's strong economic growth. His company was selected to manage the construction of an increasingly diverse number of residential, industrial, and infrastructural projects.

In the early 1930's militarists seized control of the Japanese government. They declared a "quasi-war economy" and initiated a national mobilization in preparation for the establishment of a "Greater East Asia Co-Prosperity Sphere," economically centered around Japan. The government invested heavily in new construction projects to support the Japanese military and the growing imperialist system of commerce. This created strong demand for Kumagai's services.

A talented business manager named Jinichi Makita joined Kumagai on January 1, 1938. Five days later the company was officially incorporated as Kumagai Gumi, with Santaro Kumagai as its president. Makita was named senior managing director, and Kumagai's son Tasaburo was promoted to vice president.

Diplomatic tension between Japan and Western nations increased dramatically after the Japanese invasion of China in 1937, and continued to grow until the outbreak of war in 1941. Like many companies which were a part of the Japanese military/industrial complex, Kumagai does not discuss its involvement in the Japanese war effort. It may be assumed, however, that during the war Kumagai had little choice but to place its resources at the disposal of the Japanese government.

Japan was heavily bombed during the war. When the war ended in 1945 most of the country's factories and infrastructure had been completely ruined. In order to provide fully integrated construction services, Kumagai Gumi established an architectural design division in 1946. However, while there was a need to rebuild the nation, there were few sources of capital available to invest in new construction.

When the Korean War broke out in 1950, the United States recognized the strategic value of Japan. The formation of new factories and ports was actively encouraged by the Japanese Ministry for International Trade and Investment and elements supporting the United Nations forces in Korea. On May 1, 1951, during a period of heavy activity in construction, Santaro Kumagai died.

Under the continuing leadership of Jinichi Makita, Kumagai Gumi became involved in the construction of highways, hydroelectric dams, and railways. The company contributed significantly to the development of new tunneling methods. In 1952 Kumagai independently manufactured Japan's first shield tunnel borer, a large tubular device with soil and rock pulverizers mounted on a circular forward shield. The machine is capable of creating a tunnel with a diameter of several meters. In 1958 Kumagai founded a new division called the Toyokawa Works to manufacture specialty construction equipment.

Kumagai Gumi gained a reputation for structurally sound and efficient buildings. In 1960 the company was awarded the Building Contractor's Society Prize for the design and construction of the Nagano Shimin Kaikan (People's Hall) and the Todofuken Kaikan (Prefectural Hall). Kumagai remained active in industrial projects, and completed several more housing, water, and railway tunnel projects. In 1961 Kumagai Gumi accepted its first overseas project, the construction of water reservoirs at Plover Cove and Hebe Haven in Hong Kong.

Tasaburo Kumagai resigned from the presidency on November 28, 1967 to serve as a senator in the Japanese Diet, but remained a company director. Jinichi Makita, who had served as company chairman since 1964, took over the presidency. After only a year Kumagai decided to leave politics and return to the company, where he was named chairman.

Kumagai Gumi continued to expand both in Japan and abroad. The company's Toyokawa and architectural research facilities developed a number of new engineering and design techniques which greatly improved the company's abilities and further enhanced its reputation. In 1969 Kumagai was chosen by the Republican Chinese government on Taiwan to construct the Tachien hydroelectric dam (the highest dam in Asia) for the Taiwan Power Company, and was later chosen to expand Hong Kong's Kai Tak Airport and develop the Castle Peak Highway.

In November of 1970 Tasaburo Kumagai's son Taichiro was named managing director of the company. Two years later when Taichiro Kumagai was promoted to vice president, Jinichi Makita's son Shinichiro was named a company director. That same year, 1972, Kumagai Gumi was listed on the Hong Kong Stock Exchange and a subsidiary called P.D. Kadi International was established in Indonesia.

In keeping with the growing volume of work Kumagai was performing in Hong Kong, a subsidiary was established there in 1973. Kumagai Gumi subsequently incorporated subsidiaries in Taiwan (1974), the Philippines (1976), Iran (1977), the United States (1980), and Australia (1983).

In 1975 Kumagai Gumi undertook its first high-rise building project, the Shinjuku Nomura building in Tokyo. Completed in 1978, the building has 53 stories and stands 210 meters high. In 1976 the company became the first in Japan to employ successfully the New Austrian Tunneling Method (NATM). The NATM involves driving support rods deep into rock surrounding the tunnel and then spraying concrete onto the tunnel walls. This combination of measures virtually eliminates any later contraction in the tunnel's size due to soft or unstable rock. Since Kumagai introduced NATM, almost all the tunnels it builds utilizes this method.

Kumagai Gumi was awarded a contract to construct a water supply tunnel at Isfahan in Iran. Although the project was initiated by the Shah, subsequent regimes under the revolutionary government of the Ayatollah Khomeini elected to continue the project.

On December 22, 1978 a series of management changes were made. Jinichi Makita was named chairman, Taichiro Kumagai was promoted to president, and Shinichiro Makita became a vice president. Tasaburo Kumagai continued to serve as a director and special consultant.

Kumagai has expanded its involvement in tall buildings, bridges, and industrial infrastructures, while remaining a leading name in tunnel construction. Some of the company's more spectacular building projects include the Victoria Central Development Project in Australia, the Columbus Circle Condominium in Manhattan, and the Bank of China Building (designed by I.M. Pei & Partners) in Hong Kong. The Onaruto Bridge located in southern Japan, with a total length of 1629 meters, is Kumagai's longest suspension bridge. Kumagai Gumi tunnels include the submerged Mass Transit Railway tunnel beneath Hong Kong Harbor, the Rogers Pass Tunnel in Canada, and the 53.8-kilometer Seikan railway tunnel which connects the Japanese islands of Honshu and Hokkaido.

On November 12, 1986, Jinichi Makita died at the age of 94. Makita was known for his willingness to involve the company in difficult projects, which in turn helped to establish Kumagai's reputation as one of the world's most capable construction firms. Today, Kumagai Gumi is Japan's largest construction company and ranks among the top 20 worldwide.

Principal Subsidiaries: Kumagai Doro Co., Ltd.; Sampo Special Construction Co., Ltd.; Port Island Housing Co., Ltd.; Nippon Pressed Concrete Co., Ltd.; Kyowa Takuken Development Co., Ltd.; Tochi Kogyo Co., Ltd.; Kumagai Gumi (Hong Kong) Ltd.: Kumagai International, Ltd. (Hong Kong); Everbright-Kumagai Development Co., Ltd. (Hong Kong); Shenzhen Kumagai Co., Ltd. (China); P.T. Kadi International (Indonesia); Taiwan Kumagai Co., Ltd.; Summa Kumagai, Inc. (Philippines); Kumagai-Zenecon Construction Pte. Ltd. (Singapore); Zenecon-Kumagai Sdn. Bhd. (Malaysia); Kumagai (N.S.W.) Pty. Ltd. (Australia); Kumagai Australia Finance Ltd.; Kumam Corporation (USA); KG Land California Corp.< (USA); Kumagai International USA Corporation; KG Land New York Corp. (USA); KG (Hawaii) Corporation (USA); Kumagai Properties, Inc. (USA); Kumagai Construction, Ltd. (Canada); Kumagai Overseas (Curacao) N.V. (Netherlands Antilles); Kumagai Gumi U.K., Ltd.

Source: International Directory of Company Histories, Vol. 1. St. James Press, 1988.

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