Support for Creating Our Future Society
Daiwa Securities Group begins the social problem solving businesses in various fields, such as FinTech, healthcare, energy infrastructure, and agriculture, utilizing the knowledge of various securities and financial businesses cultivated by the Group.
Business development starting from the SDGs
SDGs × "Technology"
Creation of Next Generation Financial Services (Establishment of Fintertech Co. Ltd.)
In recent years, smartphones and other digital devices have rapidly come into widespread use in our daily lives. Meanwhile, we have also ushered in an era in which the use of artificial intelligence (AI), big data, and other state-of-the-art ICT technology has made it possible to provide services that satisfy the individual needs of users. In that context, in April 2018 Daiwa Securities Group established Fintertech Co. Ltd., a new company aimed at providing generations familiar with digital devices with a variety of services and products that suit such customers' each and every needs.
Going forward, Fintertech will develop new financial services, including those using cloud funding and blockchain technology, to satisfy diverse needs of customers.
Promotion of Investment and Financing for Energy (Establishment of Daiwa Energy & Infrastructure Co. Ltd.)
Daiwa Energy & Infrastructure Co. Ltd. (DEI) was launched as the successor to the energy investment division of Daiwa PI Partners, and started operation on October 1, 2018. The company aims to provide new value as a member of an integrated securities group with a hybrid business model, and contribute to SDGs through investment and financing for renewable energy, infrastructure, and resource fields.
Renewable Energy Power Generation Projects
DEI has been actively working on development of and business investment in renewable energy generation projects, taking advantage of the Daiwa Securities Group's network. Of the 10 solar photovoltaic power plants developed and invested in by the company as of the end of March 2019, the eight plants on which construction was completed have all been operating stably. The solar photovoltaic power plants currently under construction in Isesaki City, Gunma Prefecture (4.6 MW) and Mizuhashi, Toyama City, Toyama Prefecture (5.2 MW) will be completed by the end of 2019 and the beginning of 2020, respectively.
In the biomass power generation field, DEI has been steadily promoting the development of wood biomass power generation plants that use tree trimmings in Japan as their primary source of fuel. The development is underway with Green Thermal Co. Ltd., with which DEI has formed a capital and business alliance. The commercial operation of a plant in Yonezawa City, Yamagata Prefecture began in January 2018 as the first alliance project, while a plant has been under construction in Kamitonda, Wakayama Prefecture as the second project with an eye toward completion in 2020.
Initiatives for the Woody Biomass Power Generation Field
DEI has formed a capital and business alliance with Green Thermal, a leading company for the development and operation of woody biomass power generation plants, and Biomass Fuel Co., Ltd., a biomass fuel supplier. It has been actively promoting not only the construction of power plants but also the expansion of its value chain in the biomass field.
In collaboration with Biomass Fuel, DEI has been working to expand the procurement of palm kernel shell (PKS) - fuel for biomass power generation - and develop wood pellet manufacturing plants mainly in Southeast Asia. Construction of a pellet plant is currently underway in Vietnam.
Furthermore, in December 2018, DEI invested in Bioendev AB, a Sweden-based torrefaction* technology company, aiming for technological evolution and global expansion of the biomass fuel-related business.
The woody biomass power generation business uses carbon-neutral power generation facilities that do not affect the amount of carbon dioxide. Moreover, since it adds new value as fuel to wood trimmings from forests and PKS that have been left and discarded, it is expected to generate new industries and employment and contribute to local economies in Japan as well as the promotion of industry in developing countries.
- *Technology that increases the energy density of wood pellets, etc. through the formation of carbide from woody biomass and other substances, thereby enhancing the efficiency of transportation and storage.
Stations developed/ invested in by DEI
Photovoltaic power stations
- Output: Approximately 103 MW in total
A breakdown is shown below.
- Stations in operation: Approximately 93.2 MW (total for eight stations)
- Stations under construction: Approximately 9.8 MW (two stations)
- Projected amount of electricity generated annually: Equivalent to the amount for approximately 24,000 households
Biomass power generation plant
- Output: Approximately 13 MW in total
A breakdown is shown below.
- Stations in operation: Approximately 6.3 MW (one station)
- Stations under construction: Approximately 6.7 MW (one station)
- Projected amount of electricity generated annually: Equivalent to the amount for approximately 20,000 households
SDGs× Local Community
Expansion of Solutions Provided in the Business Succession Field (Establishment of Daiwa ACA Business Succession Fund)
About half of the small and medium-sized companies in Japan do not have successors. If this situation continues, Japan may lose approximately 6.5 million jobs in total and ¥22 trillion worth of GDP in the next 10 years. Business succession is thus a major social issue.
Daiwa ACA Business Succession Fund, established in October 2018, helps small- and medium-sized companies to pass on their excellent technologies and services to the next generations. By supporting business succession, the fund also encourages the innovation of technology and services with continuity. Through this fund, Daiwa Securities Group will promote Japan's sustainable economic development.
Promotion of Industrialization of Agriculture (Establishment of Daiwa Food & Agriculture Co. Ltd)
A new type of agricultural business using ICT and other technologies is attracting attention as a solution to the aging of people engaged in farming and shortages of successors - problems faced by Japan's agricultural sector.
In November 2018, Daiwa Securities Group established Daiwa Food & Agriculture Co. Ltd (DFA). The new company is aimed at assisting expansion of the scale of business related to agriculture and food and enhancing efficiency by providing risk money to help actively introduce new technologies. In April 2019, DFA acquired 14 plastic greenhouses (with a planting area of approximately 7,000 m2) for the growing of baby leaves in Kikuchi district, Kumamoto Prefecture. This marks DFA' s new entry into the agricultural production business in collaboration with Kajitsudo Co., Ltd. and SenSprout Inc.. Kajitsudo boasts expertise in cutting-edge baby leaf planting and a proven track record in sales. SenSprout visualizes high-level planting expertise using agricultural sensors and provides solutions that comprehensively support new entries into agriculture, including planning of and assistance with the planning of entries into agriculture, and operational guidance.
Through DFA, Daiwa Securities Group will continue striving to play a role in solving social issues surrounding the agricultural sector, including the invigoration of business related to agriculture and food and the restoration of abandoned farmland. In this way, it aims to realize sustainable agriculture and food.
Full-Scale Entry into the Healthcare Field
Social challenges are piling up in the healthcare field, including the rapid expansion of demand for medical and nursing care and the necessity of reducing medical costs. Accordingly, Daiwa Securities Group made ACA HealthCare Inc., which has investment expertise in the medical and nursing care business, into a subsidiary in October 2018. The company, renamed Daiwa ACA HealthCare, will undertake full-scale expansion into the healthcare field in both Japan and overseas, especially in Asia.
Through these investments, Daiwa ACA HealthCare will support medical and nursing care services and contribute to the enhancement of medical care and welfare.
Provision of High-Quality Nursing Care Services
In Japan, aging is an important social issue to be addressed, with the population aged 75 years or older expected to exceed 20 million in the first half of the 2020s. A variety of measures are being implemented to provide the elderly with high-quality medical and nursing care services.
With this as a background, Daiwa Securities Group decided to turn Good Time Living Co. Ltd. into a subsidiary. It is a company operating and developing facilities and homes for the elderly.
Good Time Living works on improving the daily living functions of each resident, thereby helping them to live independently. By incorporating the company into Daiwa Securities Group, we put into practice initiatives that contribute to "the achievement of healthy longevity," which is positioned by the Japanese government as a priority issue, as well as SDG Goal 3 "Good Health and Well-being." Making Good Time Living a Group company is also expected to favorably affect the Group's business through the provision of new solutions to and strengthened relationships with elderly customers and their families.
Moreover, Good Time Living proactively uses IT, developing nursing care robots and introducing ICT instruments (see (1), (2), and (3) for specific examples). In March 2017, the company received an award for excellent work in "Next-Generation Nursing Care," a program sponsored by the Ministry of Health, Labour and Welfare and the Association for Technical Aids to recognize successful cases of introducing nursing care robots. By enhancing the added value of nursing care services and advancing the development of work environments in the nursing care industry, we will implement initiatives that contribute to SDG Goal 8 "Decent Work and Economic Growth."
Contribution to Local Communities through Investment Activities of Investment Corporation
In November 2014, Daiwa Real Estate Asset Management Co. Ltd. started managing Nippon Healthcare Investment Corporation (listed on the Tokyo Stock Exchange), which is Japan's first REIT focusing on healthcare facilities. The investment corporation mainly invests in healthcare facilities such as private nursing homes, which are likely to see stronger demand from society over the medium to long term as the population continues to age.
Employees of the investment company visit the facilities of their investees nationwide several times each year. They participate in hands-on events, such as family get-together meetings and meetings to show respect to the elderly, while assisting daily work, including cleaning the periphery of the facilities, pruning plants in the courtyards, and pulling out weeds. They also participate in hands-on training to experience work as facility employees in an effort to deepen their understanding of frontline work.
As the owner of its investees' facilities, the investment company started these initiatives to deepen its understanding of the daily work of facility operators and the services provided to residents. The initiatives are now becoming local community contribution activities through the core business, and we will continue to work actively on these initiatives.
Investment in Drug Development Ventures and Other Businesses by DCI Partners
We at DCI Partners have been investing in the biotech field for more than 20 years, including the period of NIF Ventures (now Daiwa Corporate Investment). We currently manage one of Japan's largest funds, making biotech venture capital investment focusing on the drug development field in Japan and Taiwan. The drug development business is faced with five challenges: securing human resources, R&D, business development, intellectual property strategy, and financing. Biotech start-ups predominately lack the managerial resources - people, goods, and money - to overcome these management challenges. Through the fund, DCI Partners strives to help advance development and enhance corporate value by providing managerial resources and hands-on support from strategy planning to implementation. If there are no human resources or money, we establish a new company and even carry out the development of medical products.
Anexa PEP Inc., established in October 2018, has entered into a license agreement with the National Institute of Advanced Industrial Science and Technology (AIST), one of Japan's largest research institutions, and is currently developing a cancer therapeutic agent. Anexa PEP has been authorized by the AIST as an "AIST start-up" in recognition of its attempt to commercialize the seeds of revolutionary technology. Open Innovation Partners, an existing company, has developed a cancer therapeutic agent after acquiring development rights from Mitsubishi Tanabe Pharma Corporation. In December 2018, it became the first Japanese company set up under the leadership of an investment fund to receive approval for the initiation of a clinical trial. Through investment activities, we engage in activities to expand the possibility of promising seeds of biotech start-ups, academic institutions, and pharmaceutical companies, promote development in the biotech field, and provide patients with more treatment options. DCI Partners will continue striving to contribute to the health of all people and society.
Support for Reconstruction Following the Great East Japan Earthquake
The Great East Japan Earthquake SME Reconstruction Support Fund
Daiwa Corporate Investment Co., Ltd. operates the Great East Japan Earthquake SME Reconstruction Support Fund, receiving investment from the Organization for Small & Medium Enterprises and Regional Innovation, JAPAN (SME Support, Japan), The Aomori Bank, Ltd., The Bank of Iwate, Ltd., The 77 Bank, Ltd., The Toho Bank, Ltd., and other institutions. Targeting unlisted private companies in the disaster-affected areas, the fund aims to expeditiously provide risk finance. The goal is to actively support companies in their efforts to secure renewed growth and development by supplying finance for a variety of purposes. These include restoration and reconstruction following the 2011 earthquake disaster, new business development, the shift to a new industry or line of business, business reorganization and succession, and business incubation. The fund thereby aims to contribute to the early restoration and sustainable development of the disaster-affected areas.
Support for the "New Tohoku" Restoration Business Contest 2018
To further deepen the activities carried out by the Great East Japan Earthquake SME Reconstruction Support Fund, Daiwa Corporate Investment supports the "New Tohoku" Restoration Business Contest in collaboration with Daiwa Securities Group Inc.. This contest is organized by the Reconstruction Agency every autumn. We grant the "Daiwa Securities Group Phoenix Award" to an outstanding plan.
Sanriku Toretate Ichiba Co., Ltd., an award recipient for 2018, owns a technology that keeps fish fresh from unloading to delivery in collaboration with fishermen in Ofunato City, Iwate Prefecture. As the technology allows the lifespan of sashimi and other fish products to be greatly extended, the company not only sells products within Japan but also exports to Asian countries. The award was given to support an initiative started in the Sanriku area, which is rich in marine resources, to comprehensively revise the conventional form of the fishing industry and generate a business that utilizes the latest technology.
We will continue to actively carry out these activities so as to be able to contribute to the reconstruction of the Tohoku region.
Support for Developing Human Resources Responsible for the Next Generation
Support for Developing Human Resources Responsible for Next Generation Innovation through "Sido Next Innovator 2018"
Daiwa Institute of Research (DIR) was entrusted by the Ministry of Economy, Trade and Industry with secretariat work for "Sido Next Innovator 2018" jointly with World Innovation Lab (WiL, LLC) . Under the theme "Thinker to Doer," the program solicits and selects a wide range of people, including those taking up the challenge of generating innovation and those working on challenging new business at major companies. It aims to develop global human resources who will play a major role in next-generation innovation by providing selected applicants with lectures, seminars, workshops, mentoring and interaction with investors and entrepreneurs in Silicon Valley. The program was initiated in FY2015, and FY2018 marks its fourth year.
The program runs for a total of 10 months - two months of open application and selection and eight months of program implementation. In FY2018, applications were solicited from May to June 2018, and 126 successful candidates (program recipients) were selected from among 345 applicants based on rigorous evaluation.
In the domestic program, which kicked off in July, participants went through lectures, workshops, mentoring (in which skilled workers with a wealth of experience called mentors engage in dialogue with and provide advice to unskilled workers to encourage growth and the brushing up of business plans), pitch contests, and other training to brush up their business plans and enhance presentation skills. Alongside the domestic program, the small-class program "Sido Café" was provided for those who wished to participate. In the program, participants deepened their knowledge of specific topics.
In a pitch contest carried out on December 15, 2018, 20 participants were selected as delegates to Silicon Valley based on the overall results of screening by application forms and pitch. The 20 participants took part in a two-week Silicon Valley program in which they visited entrepreneurs playing major roles at local start-ups, personnel in charge of new business development at large companies, and venture capitalists. They enhanced the quality of their own business plans through small meetings and mentoring. Moreover, among those who were not selected as delegates to Silicon Valley, 31 applicants participated in a domestic follow-up program in which they continued to brush up their business plans.
A final results reporting event ("Demo Day") was held on February 15, 2019. Demo Day featured pitches made by a total of 40 participants - 20 delegates to Silicon Valley and 20 participants in the domestic follow-up program, along with speeches by guest speakers, exhibition booths set up by alumni and a panel discussion. DIR will continue to participate in programs such as this which will lead to innovation.