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Hitachi Capital Corporation

Story about creating the future, creating social value

Social Infrastructure

Support that always aims to be a step ahead, for a world with a higher standard of living, and greater peace of mind.

All kinds of facilities and equipment, indispensable infrastructure for our world.
We don’t just want to build that infrastructure, we want it to improve the standard of living...
With a finger on the pulse of current changes, and with extraordinary enthusiasm, we are building infrastructure for our world - that is our mission at Hitachi Capital Group.

All kinds of facilities and equipment, indispensable infrastructure for our world.
We don’t just want to build that infrastructure, we want it to improve the standard of living...
With a finger on the pulse of current changes, and with extraordinary enthusiasm, we are building infrastructure for our world - that is our mission at Hitachi Capital Group.

01Bringing a broad perspective to creating infrastructure that benefits society

What comes to mind when you hear the word “infrastructure”? You might think of large-scale structures like roads, water supply works, or bridges. At Hitachi Capital Group, we look at infrastructure from a broad perspective and take it to mean “amenities that benefit society”, or “social infrastructure”, and are investing our efforts in bringing such projects to fruition.

The solutions we come up with for community facilities, for example, are optimized to bring affluence and a higher standard of living to the local community. Take the Coconeri project for example, a public/private complex in Nerima, Tokyo, which effectively utilizes publicly owned land. The project provides convenience by directly connecting a pedestrian deck (an elevated pedestrian walkway) with Nerima Station. By attracting tenants such as the Nerima Kumin - Sangyo Plaza (Residents - Industry Plaza) and other government facilities, commercial outlets, a rehabilitation clinic, and so on, the complex generates lively space and the functionalities necessary for daily life.

And in building leasing too, we aim to come up with solutions that lead to social contributions. In building leasing, Hitachi Capital Group rents land from a land owner by fixed-term business leasehold, constructs a building to the customer’s desired specifications, then leases the building to them. Take for example distribution warehouses, a focus for our business, which we build with attention to the people who work there and the end users, as well as the ability for the customer to promptly and reliably deliver the goods required, while providing support for operations as well.

We are also pursuing initiatives like this overseas. Our first such project is the Cikarang Distribution Center in Indonesia, which became fully operational in June 2016. The center is a large-scale distribution hub with 2 stories and total floor area of 40,000-square meters on a 90,000-square meter lot and is the first project where a Japanese company operating in Indonesia has worked with building leasing. From business practices to regulations, everything in Indonesia is different to Japan, but we cleared each issue one by one, and operations started without hitch. Now expectations have grown for the center to boost economic development in Indonesia. The employees responsible for this project describe here the steps to delivery of the distribution center.

02Why we took on the first building leasing project for a Japanese company
operating overseas

Hitachi Capital Community Corporation
Hiroki Fukuma
Naho Kondo

Where we work, Hitachi Capital Community Corporation, we provide integrated property solutions, from building and facility finance to development, holding, and operation. This project was sparked when Hitachi Transport System, Ltd., who we regularly support, consulted us.

Hitachi Transport System had been contracted by a consumer goods manufacturer in Indonesia to provide distribution services. Indonesia’s annual economic growth rate has reached 5% to 6%, making it one of the countries in the world with remarkable continued economic growth. With its population already the 4th largest in the world, it continues to increase, and demand for everyday consumer goods has grown enormously in step with the population growth. Hitachi Transport System needed to increase the supply in response to the increased demand attributable to such development and growth in the country, but the existing distribution center couldn’t meet that demand, so a new center had to be opened.

Nonetheless, building a new large-scale distribution center means huge costs. But Hitachi Transport System had already invested heavily in Indonesia, so they were looking into some other methods, other than new borrowings or large-scale capital investment. That’s when they approached us, having helped them in the past with building leasing in Japan.

Indonesian business practices, regulations and so on are different to Japan’s, and the notion of building leasing itself didn’t exist there. We imagined that we could expect quite some difficulty in completing this project, but we made the determination to take on the challenge. Indonesia is achieving spectacular growth at the moment. We thought that by providing support for the distribution of everyday goods we would be helping the standard of living in Indonesia, and that might create favorable conditions for further growth. Fortunately, Hitachi Capital Group has developed various projects globally, so we were able to bring to the project a team formed by linking up with their staff responsible for overseas projects, and experts in all the different fields.

03Dealing with the local rules, carefully and promptly

With a complete support system in place, we moved ahead with in-depth studies of the regulations, tax, and so on. As we mentioned, the concept of building leasing didn’t exist in Indonesia, so there was the possibility that what was common practice in Japan might not be acceptable. For that reason, we communicated with our customer even more closely than usual, as we carefully moved ahead with the project step by step. An aspect of this project that left a lasting impression on us was the issues around locally incorporated companies.

Because overseas corporations are not permitted to own property in Indonesia, we needed a locally incorporated company to build and lease the distribution center. Hitachi Capital Group already has a locally incorporated company in Indonesia to develop a project revolving around vehicle finance, but building leasing is a completely different type of scheme. We needed to establish a new company to put the project footings on a solid foundation and support the project over the long term. So, through joint finance from a Japan-based finance company with a track record in Indonesia of over 30-years, and a substantial customer base, we established PT. Hitachi Capital Finance Indonesia.

However, while we were initially told that even a wholly Japanese-owned locally incorporated company could operate a distribution warehouse in Indonesia, later on we confirmed that a certain level of local capital had to be injected, so we were pressed by the urgent need to work out another plan. But there were proactive investors in Indonesia beforehand, so when we asked for their participation, they readily agreed. For a while we were in a cold sweat, but by dealing with things flexibly, for example, promptly going to Indonesia when necessary, and without rushing when any unforeseen circumstance arose, we overcame a range of different situations.

So, we faced one challenging hurdle after the other, but we followed the local rules and managed to systematically clear each one before the day of the center opening arrived, without a hitch. Having working in tandem with us as we progressed the project, the customer expressed their gratitude to us, and to this day we clearly remember the sense of complete accomplishment and joy that gradually welled up from the bottom of our heart.

The Next StorySolutions focused on a brighter future, with importance placed on enthusiasm

In every project, not only the Indonesian project, there are a range of difficulties on the path to completion. When we think now about what you need to overcome difficulties, as you might expect, we would probably say that there’s nothing better than enthusiasm. We feel that there’s nothing more important than putting everything we’ve got into a project, working together with enthusiasm to delineate the future that will lead to a more prosperous society.

But we can’t deliver projects by ourselves. As well as the customers of course, there are also the land owners, the neighboring businesses and residents, and in the case of the Indonesian project the local investors, the local government authorities, the construction company, numerous outside partners, all the Hitachi Capital Group companies and departments from which we formed the joint team... Social infrastructure projects really are achieved through the involvement of many people, and we feel it is very worthwhile being involved.