Chiyoda Engineering symbolizes the remarkable achievement of Japan in the second part of the 20th century. When it was created, in 1948, its homeland was starting from scratch, after 4 years of devastating battles and 2 atomic strikes. In order to strive, Chiyoda established two rules for itself it still follows today: industrial excellence and opening up to the world.
Top-grade engineering
In 1948, the new 25-employee engineering firm had one vision and one goal. The goal was to meet the market demands in oil equipments (such as refineries), as soon as the world would have recovered from the war. The vision was that success awaited Chiyoda not in Japan, but mostly abroad. The Mitsubishi Corporation had been in great part liquidated after the war, and the former construction director of the Oil division, Akiyoshi Tamaki, set off with a handful of Mitsubishi former employees to build the world's petroleum equipments. Everything indicated that after the war, the world would develop mainly on oil-related products. Therefore the demand would be great. Military efforts during a decade had boosted oil-related technologies (land vehicles, planes, vessels), and the advances were quickly recuperated for civilian applications. With all the industrial know-how gathered, Chiyoda was all set to take on the world. The market was, indeed, so receptive that the Chiyoda Corporation went public in 1957, less than 10 years after its founding.
Choosing partners
Chiyoda has long been aware that whom they work with will seal their doom or make their fortune. Following a restructuration at the beginning of the 21st century, it chose to form alliances with financial partner and with an industrial one. The bank of Tokyo Mitsubishi gave the Chiyoda corporation reliable financial resilience, and Kellogg, Brown & Root, the prestigious US engineering firm, entered an alliance designed to develop the ethylene technology, one of its core specialization fields. And on the more general level, the Japanese corporation has a strict policy of demanding selection, and working only with specialized partners in hydraulics, mechanics, and so on.
Moving abroad.
Shortly after its creation, the Chiyoda Corporation pushed its business abroad, to the lands of opportunity: Russia, Iran, Saudi Arabia and Qatar. Those four countries hold, to themselves, over one third of the world's natural resources in gas. The company thus concentrated its business operations on large high-tech installations designed for massive natural resource output. And because its line of business was by nature overseas, the company received much support from its homeland and its continental region for its central role in international development : the trade and industry prize from the Japanese ministry of economy (its highest distinction), and the International Achievers Award from the Indian Economic Development & Research association in New Delhi, among many others, were awarded over the past 20 years.
Chiyoda was called upon to build the production facilities off the Sakhalin Island, to extract and process the huge natural gas reserve, in Russia, in 2008. Because the importance of the field was so great in economic terms, Russia requested that Chiyoda reinforce Toyo, another Japanese engineering firm, to guarantee the technological level of the plant. In addition, the extreme environment (the island's difficult access and the deadly cold) made it quite clear to Sakhalin Energy Investment Company, the client, that the choice of contractors was not a good bulletpoint to save money on.
Saudi Arabia, the second largest owner of oil in the world, was also the scene of massive industrial petrochemical plant building over the past 50 years, and resorted to Chiyoda to build the backbone of its economy, which would become home base for its international influence. Today, no fewer than 19 major industrial sites in Saudi Arabia, covering ethylene, hexane, naphta production and many other fields, were built by Chiyoda.
But the most outstanding achievement is no doubt in the little Gulf state of Qatar. In 2011, the latest Liquid Natural Gas plant in all of the Persian gulf rumbled to a start and shipped off its first commercial load. Chiyoda built, in the industrial city of Ras Laffan, the most advanced Gas to Liquid factory in the world. Because Qatar’s ambitions in the region are large, Chiyoda’s mission was to create a plant that would not only be large enough to process the gas out of the gigantic North Field, but would top all others in the region in terms of technology. To this day, no other plant has exceeded the new standard.
Seizing opportunities, dodging bullets, and building experience
In the late 1990s and early 2000s, Chiyoda ran into a rough period. They simultaneously had to face a sharp drop in the Middle-East market, and the entry of Korea onto the global market, which had caught up technologically. Chiyoda, which had to operate severe downsizing and even recorded losses in the end of the decade, made a spectacular recovery. As a speedy recovery plan, it entered the non-hydrocarbon market, re-focused on technological innovation and, with the support of its financial partner, led an in-depth restructuration of itself. The plan was so efficiently designed and managed that, almost two years ahead of schedule, they terminated the recovery, posting a near-100-billion yen profit. Given that every client's nightmare is having its supplier collapse in the middle of a long-term project, Chiyoda's track record of resilience is today a solid credential for future deals.
Simultaneously, and although Chiyoda's absence from Syria and Egypt during the Kippur War kept the event from having any consequence on the corporation, it strongly benefited the oil price rise during the Irak-Iran war, which dragged on all through the 80s. With its strong foothold in the region, demand for oil soared, as a response to the skyrocketing prices. Chiyoda multiplied the installations in the Middle East in record time.
This strong track record surely benefits Chiyoda's business, but isn't enough to itself. Industrial plants such as the ones the corporation is specialized in cost billions of dollars, and investors who inject this kind of money have a tendancy to be extremely cautious before signing. No doubt, telling them their projects will be carried through with due diligence because those in the past have, would not be enough.
Chiyoda therefore implemented a no-loss methodology, composed of 5 major industrial processes honed over the years of their own experience. In other words, every project is better led, and better built, than the last one. This systematic self-scrutiny enabled the engineering firm to carry out an achievement seldom seen in the history of industry. When the average industrial project is plagued and ridden with disasters and accidents, Chiyoda suffered, over the 20 million man-hours it took to build the russian plant in Sakhaline, a total of 0 accidents. The fact was so outstanding that it earned them yet another Internation Industrial Development award from their stern Ministry of Economy and trade.
The secret of Chiyoda's decade-long resilience is triple : flexibility, experience capitalization and technology. No company survives without a little luck. But if it relies solely on it to thrive in its future, it will hardly be sufficient. By constantly adapting to new circumstances, building reliable alliances, and making sure every lesson learned in the past half-century benefits every single worker, Chiyoda reduced the role luck played, good or bad, to almost none. Which is why all the greatest oil and gas producers call their number when they have the future influence and prestige of their country at stake.
