VALUE CREATION Regional Strategy

Regional strategy is our core strategy that has been supporting domestic industries and local communities. Unlike other manufacturers, Air Water has been committed to “direct sales” since the days of our predecessors, selling the gas we produce directly to our customers. Such orientation laid the foundation for the integrated production and sales system that continues to this day.

The industrial gas business is an equipment industry based on common air. In addition to the difficulty of differentiating the product in terms of quality, the transportation of the product is very costly. This enables a business model in which a manufacturing base is located close to the consumption area to create a commercial zone. In the past, the gas was usually produced in large volumes at low cost at large plants located along the Pacific coast, where steel mills and chemical plants are clustered, and the gas was transported by tanker truck across the country.

However, we have recognized changes in the domestic industrial structure, such as the emergence of the semiconductor industry located inland and the contraction of the heavy industry. Since 2000, we have deployed our highly efficient compact “VSU” plants in 22 locations in Japan, where there were previously no manufacturing bases. Thus, we have established a locally produced and consumed model of gas supply for the entire Japanese market. Each of the newly based regions has deepened its partnerships with local companies and municipalities, making it a place to explore new growth drivers.

Our starting point - the two predecessor companies without large gas production facilities began downstream small-lot sales, such as cylinder gas.

In Osaka, we sold liquefied oxygen directly without distributors. In Hokkaido, we launched the LP gas business for households, and expanded the service bases.

Established a company dedicated to downstream distribution, which is the origin of our regional operating companies now, and strengthened in-house integrated system from manufacturing to supply.

Expanded sales base network from business areas centered on Hokkaido and western Japan to all over Japan.

Established sales companies (regional operating companies) in each region. Simultaneously promoted “federated” management that boosts the downstream areas and “partnering” management that emphasizes collaboration with other companies.

Developed new bases in cooperation with leading industrial gas suppliers in each region to maintain/increase market share through areal expansion.

To make the regional business a core pillar of our growth, we have reorganized regional operating companies specializing in sales into eight companies in eight blocks across Japan, and Air Water’s branch functions were integrated into each company.

Consolidated the eight regional operating companies into three (Hokkaido, East Japan, and West Japan) in order to achieve a corporate scale that can grow on its own with each region.