JAPAN FOUNDATION ENGINEERING CO.,LTD.
1914・Standard Market・Construction
Business
Nihon Kiso Gijutsu Co., Ltd. is a specialized construction foundation engineering contractor whose core businesses include slope protection works, dam foundation works, anchor works, heavy machinery works, grouting works, maintenance and repair works, and environmental conservation works. Since its founding in Showa 28 (1953), the company has accumulated "drilling" and "grouting" as its core technologies, and domestically serves government agencies and major general contractors as its principal customers. It operates domestically and internationally through its consolidated subsidiaries JAFEC USA, Inc. (United States) and OK Soil Co., Ltd. The company also engages in construction consulting and geological surveying, and provides an integrated service through affiliated companies extending to dam facility management and data analysis. Net sales for FY2025 (ending March 2025) were ¥30,279 million.
Business Model
The majority of contracted construction work is obtained through sole-source (tokumei) awards (96.0% in FY2024, 92.6% in FY2025), with high technical capability not dependent on competitive bidding and continuous client relationships forming the earnings base. Domestically, the company secures stable orders mainly as a subcontractor for government agencies and major general contractors, while its US subsidiary JAFEC USA, Inc. supplements earnings by winning large-scale ground improvement contracts for LNG refining plant facilities. Revenue recognition based on the percentage-of-completion method and the accumulation of order backlog serve as leading indicators of business performance.
Company Strengths
The negotiated-contract (tokumei) ratio was 96.0% in FY2024 and remained high at 92.6% in FY2025. Rather than relying on competitive bidding, the company has established technical capabilities and trust relationships that lead customers to directly designate it, supporting a revenue structure that is less prone to price competition. Its 69 held patents, 15 pending patent applications, and 80 construction implementation rights underpin this technological advantage.
The company has independently developed and field-verified a skid-type percussion drill (A-RPD), a small-diameter boring machine (ABM-10), and an automated mortar manufacturing system. R&D expenses in FY2025 totaled ¥100 million, and total capital expenditure reached ¥1,356 million (of which ¥320 million was for the ABM-10). Amid worsening labor shortages in the construction industry, the company is building a competitive advantage through automated construction requiring fewer workers.
JAFEC USA, Inc. continues to receive orders for ground improvement work at LNG refining plant sites for Bechtel Energy, Inc. in the United States. U.S. sales reached ¥10,261 million in FY2024 (a substantial increase from ¥2,784 million in the prior period), boosting the group's overall revenue. Train 4 (Section 4) was ordered ahead of schedule, demonstrating that ongoing customer relationships have also been established overseas.
ENVALITH's Perspective
Performance Trend
Revenue expanded steadily from ¥22,111 million in FY2022 to ¥30,279 million in FY2025, but turned to decline in FY2026 (ending March 2026), falling 9.7% year on year to ¥27,353 million. Operating income also decreased 23.0%, from ¥1,891 million to ¥1,456 million. This appears to be mainly due to an external factor: the completion of the progress cycle on construction work related to a U.S. LNG refining plant project. Meanwhile, net income increased from ¥1,440 million to ¥1,660 million, likely supported by non-operating income and extraordinary gains. Note that, per a correction dated June 5, 2026 (Reiwa 8), revenue from Bechtel Energy, Inc. was revised from ¥3,710,420 thousand to ¥4,183,022 thousand (both figures in thousands of yen).
Growth Strategy
Aiming for sustainable growth through three pillars: technology transfer, productivity improvement, and overseas expansion
A strategy to maintain and expand overseas sales through continued orders for LNG-related and infrastructure construction work via JAFEC USA, Inc. In FY2026 (ending March 2026), the company recorded sales of ¥4,183,022 thousand from Bechtel Energy, Inc., continuing to build up its construction track record in the U.S. market.
Against a backdrop of public investment related to national resilience (national land strengthening), the company maintains a negotiated-contract (sole-source) order ratio of 96% in the slope protection and ground improvement fields, securing a stable domestic order base. Handling large-scale projects such as major repair works on expressways in Hokkaido is supporting domestic sales.
The company aims to maintain construction capacity and improve profitability amid labor shortages through the transfer of skills from experienced engineers, productivity improvement measures, and the introduction of automation technology. The expansion of capital investment and the profit contribution of automation technology serve as key medium- to long-term evaluation metrics.
Last updated: July 19, 2026