Japan’s Newest Billionaire Masters The Science Of Turning Waste Into Wealth

One of Japan’s largest IPOs in 2022 was for Daiei Kankyo, a waste management and recycling company headquartered in Kobe. Last December, the company raised $315 million, offering over a third of its shares, and listed on the Tokyo Stock Exchange’s Prime Market. The stock is up nearly 30% since then, making Fumio Kaneko, 66, the company’s cofounder and president, the country’s newest billionaire with a net worth of $1 billion.

Kaneko, along with three business partners, founded the company in 1979 in Izumi city, Osaka Prefecture, to manage waste. Despite facing initial resistance from local residents, Kaneko and his cofounders managed to convince the local government about the need for a permanent disposal site and obtained the required permits to construct one to handle nine different types of waste. That site has since been converted into a landscaped public park.

A turning point for the venture was in 1995 when the Great Hanshin Awaji earthquake caused massive damage in Kobe and Osaka. The company ended up handling a third of all the earthquake waste, which strained its finances but helped to established its credentials.

Since then, Daiei Kankyo has expanded into waste recycling, power generation using waste, soil remediation and forest conservation. The company’s services include waste collection and transportation, sorting, crushing, recycling and final disposal at 61 facilities spread over five Prefectures. As of December, the firm had a total capacity of 31.8 million cubic meters at all its final disposal sites.

The firm also operates waste biomass and biogas power generation plants and supplies heat to a hotel in Iga City for its natural hot spring facility. It produces renewable energy through solar power generation. Today, Daiei has more than 30 subsidiaries and affiliated companies with a workforce of 2,520 people.

Daiei Kankyo has benefited from the increasing demand for waste management services as the pandemic effects wane. In the financial year ended March 2022, it posted revenue of $500 million, logging a 5.5% increase from the same period a year earlier, with net profit of $67 million. In the first nine months of the fiscal year 2023 ended December 2022, Daiei reported net profit of $54 million on revenue of $375 million.