Value Creation through the Geographical Advantages of Akita
Under a comprehensive partnership agreement with Akita Prefecture, Nippon Yusen Kabushiki Kaisha（NYK）launched operations of its Akita Branch in April 2022. In accordance with the agreement, the branch and the prefecture will collaborate in a partnership to revitalize the region in various ways. In addition to promoting renewable energy projects in fields such as offshore wind power generation and developing related personnel, the partnership will focus efforts on the further utilization of ports, development of ship-related personnel, tourism promotion, and advancement of environmental preservation.
The offshore wind power generation project spans more than 25 years, which includes survey, construction, and operation and maintenance phases. Completion of the construction phase and the subsequent operation and maintenance phase will involve many different industries. Wind power generation that utilizes Akita’s strong winds has already become a major industry in the area with a proven track record. By extending this industry from onshore to offshore, it means that the NYK Group will take on the challenge of addressing some of the key issues facing Japan: decarbonization, energy supply stability, regional revitalization, and the restoration of international competitiveness.
Although centered in Akita Prefecture, the new branch’s activities extend to neighboring prefectures that are also likely to develop new offshore wind power generation projects. The branch has begun expanding partner networks in each prefecture while strengthening the operational capabilities of offshore wind power generation-related businesses. Such efforts will encompass crew transfer vessels (CTVs) and self-elevated platform (SEP) vessels. The branch’s inaugural general manager, Tatsuya Shimomura, who believes businesses that place too much burden on local communities and other specific stakeholders are not sustainable, says,
“We opened the Akita Branch to build solid, sustainable business foundations and invigorate the prefecture through local partnerships. We want to achieve these aims by cooperating with Akita-based companies, fostering relationships of trust, and developing human resources.” Shimomura continues:
“While putting offshore wind power generation-related businesses at the heart of our activities, we want to establish a co-creation model in which we grow and develop together with local communities.”
Value Creation in and with Akita Prefecture
NYK will begin full-fledged efforts to develop human resources in Akita Prefecture. In September 2022, the Company announced a plan to open a comprehensive training center for offshore wind power generation plants in the prefecture in 2024. The center plans to offer comprehensive training to approximately 1,000 people each year. Since the existing training facility in Akita lacks a pool, the new center will provide a survival training course by utilizing the 10-meter-deep pool installed at Akita Prefectural Oga Kaiyo High School. As a result, this will enable wind turbine trainees to receive both onshore and offshore training within Akita Prefecture. As similar training is currently available at only one location in Japan, trainees sometimes have to wait several months before receiving training. Therefore, the expansion of training facilities is crucial in supporting the ongoing development of the offshore wind power generation business. In addition, the new center will install a state-of-the-art ship-handling simulator. NYK, which owns CTVs, will provide training on the operation of CTVs. In terms of the idea behind the establishment of the new center, Shimomura explains:
“One reason for establishing a training center at Akita Prefectural Oga Kaiyo High School is to take advantage of its excellent training pool. However, NYK also intends to contribute to educational activities by encouraging the use of the ship-handling simulator in the high school’s classes. This unique opportunity enables students to gain types of experience not typically available in other high schools in Japan, such as the simulated handling of large ships.” Shimomura continues,
“Further, I believe the initiative will help develop marine crew members in the long term if students can see professionals undergoing training and be inspired by that to view the maritime industry as an industry offering an exciting career path.”
As the facility is being constructed, NYK is proceeding with preparations to begin instructor training in 2023 and to open the training center in 2024.
Unlike crew members on oceangoing voyages, CTV crew members work close to land, allowing them to commute from home daily. To support a power generation business over the long term, the creation of a training system that continuously produces crew members from the local community is necessary. Also, an increase in workstyles that enable crew members to return home every day will give new options to Akita Prefecture residents of all ages, including the many young women who may otherwise leave the prefecture.
Since the opening of the new training center was announced, Akita Prefectural Oga Kaiyo High School has seen enrollment inquiries increase and has begun attracting students from outside the prefecture. Oga City is also active about supporting the initiative. For example, the municipality is considering offering rent subsidies to students from outside the prefecture. Providing an overview of business development going forward, Shimomura says,
“Service reliability is also critical. Sending repair parts and maintenance personnel from distant locations every time there is a breakdown or issue is costly and time-consuming and inconvenient to our customers. Some tasks are very specialized, which means we need to analyze how feasible it is to handle these tasks locally. Nonetheless, relying as much as possible on local resources to meet operational needs makes sense from the viewpoint of simultaneously benefiting three types of stakeholders: NYK; power generators, wind turbine manufacturers, and other customers; and local companies.” Shimomura continues:
“The realization of business arrangements that benefit service providers, customers, and society in this way is known as sampo yoshi in Japanese. With the aim of building a stable supply chain, we will identify and categorize tasks.”
Each of the Akita Branch’s projects in the prefecture is significant. Currently, the branch mainly works with the Energy Division’s Green Business Group. Going forward, however, the branch will partner with a range of divisions and Group companies while establishing roots in the region.
Leading Model for Renewable Energy in Japan
Akita Prefecture’s offshore wind power generation projects have abundant potential. By accumulating know-how ahead of other regions in Japan through joint efforts that involve industry, government, and academia, the projects are expected to become a leading model that contributes to the development of renewable energy in Japan. Outlining the scenario for introducing similar initiatives to other regions in Japan and overseas, Shimomura says,
“When regional revitalization based on offshore wind power generation begins producing results in earnest, Akita Prefecture and local companies will be ahead of peers in terms of expertise and experience. The prefecture may be able to offer solutions that address some of Japan’s major issues, including decarbonization, energy supply stability, regional revitalization, and the restoration of international competitiveness. Moreover, the know-how that industry, government, and academia accumulate is sure to be useful overseas. A wide range of business opportunities will be opened up for the NYK Group. We really want to make the project a success.”
In Akita Prefecture, the number of people wishing to work for offshore wind power generation-related companies is increasing. Also, interest among young people is growing. NYK is dispatching captains and chief engineers to high schools in the prefecture to give classes on maritime careers. Local companies have also produced a variety of ideas. As part of efforts to promote tourism, an NYK Group company is holding talks with authorities about local food and drink to be potentially served on its cruise ship. Furthermore, the NYK Group will cater to logistics demand stemming from the promotion of exports of processed marine products and other local offerings. In other initiatives, NYK will improve and incorporate its elemental technologies, in order to develop practical applications for next-generation fuels that are produced by using electricity derived from wind power and other renewable energy sources.
Unwavering Conviction
After joining NYK, Tatsuya Shimomura began his career in the cruise segment and subsequently served in the LNG transportation and dry bulk businesses. In 2000, he was appointed as NYK’s first representative in Qatar, where he concentrated on the LNG transportation business. For five years, Shimomura also focused on building relationships of trust with local companies. Believing in the importance of education for the stable development of Qatar, he also helped introduce Japan’s Kumon Method of learning to local public elementary schools. The energy industry is primarily based on long-term contracts. Therefore, ensuring the long-term stability of the countries and regions associated with the energy industry is vital. Since long-term business may face problems among various parties, he recognizes the critical importance of mutual trust, so that constructive discussions can be held in good faith when issues arise.
“Qatar and Akita Prefecture are about the same in size, and I often use Akita Prefecture as a reference when outlining Qatar’s geographical size to Japanese people. Personally, I feel a curious connection between the two places. My assignments to both places have coincided with periods just before the realization of growth driven by new, nationally significant energy projects.” He continues:
“In Qatar, preparations were focused on LNG exports. In Akita, meanwhile, offshore wind power is about to become a major industry. Moreover, in both places I have been the first person transferred to a newly established position. Although Qatar and Akita are in completely different locations, I believe the same approach can be applied to both places. By developing together with local communities and forming strong relationships with them while the NYK Group addresses social issues, I will pursue genuine ESG management, which has always been of central importance to the NYK Group.”
“Clear explanations of our way of thinking and overall strategy will naturally attract like-minded stakeholders. My role is to lay the foundations for advancing long-term projects by conveying NYK’s core philosophy, values, and vision and by building a network of co-creators.” The offshore wind power generation projects in which the NYK Group is involved will commence operations between 2028 and 2030. While viewing the start-up of these projects as an initial milestone, NYK will look further ahead in its efforts to develop an ESG story together with Akita Prefecture, municipalities, and business partners.
(Interview February 3, 2023)