Nagaoka International 6239
ナガオカ
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2022-05-16
2022-03-22
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Summary
Nagaoka International Corporation is a manufacturer of components called “internals” installed in reactors, the core equipment of petrochemical plants, as well as equipment for groundwater intake and water treatment.
Machinery
Key dates
2022-02-14
Coverage initiation
Executive summary
Business overview
Nagaoka International Corporation (“Nagaoka”; TSE JASDAQ Standard: 6239) is a manufacturer of components called “internals” installed in reactors, the core equipment of petrochemical plants, as well as equipment for groundwater intake and water treatment. Collectively referred to as Nagaoka Screen, these products share a special metal-filter structure that facilitates smooth flow of liquids and gases. Product categories largely divide into “screen internals” used in petrochemical plants and “water intake screens” used in groundwater collection.
The reactors of oil refineries and petrochemical plants convert feedstock such as naphtha and propane gas into propylene, high-octane gasoline, and other materials by inducing catalytic reactions. Nagaoka’s mainstay screen internals are the metal filters used to retain the catalysts within these reactors. They are mostly made of stainless steel, which is heat-resistant, rust-resistant, durable, but expensive. Meanwhile, water intake screens are the metal filters used in water collection using wells and for filtration of impurities. The product lineup of water intake screens includes low-priced items made of galvanized ordinary steel (iron).
In FY06/21, revenue was JPY6.3bn (-2.7% YoY) and operating profit was JPY810mn (-24.8% YoY). The Energy-related business accounted for 84.5% of total revenue and 94.5% of operating profit (operating profit margin [OPM] of 23.7%). The Water-related business accounted for the remainder (15.5% of revenue and 5.5% of operating profit; OPM of 7.6%).
Screen internals are the mainstay products in the Energy-related business. Since they are a key component in the oil refining and petrochemical processes, only the manufacturers certified by process licensors (owning the rights for basic designs and patents associated with plant construction) are authorized to manufacture them. Only a handful of manufacturers in the world have this certification, and as one of the selected few, Nagaoka has supplied screen internals in 65 countries. According to the company, of the 45 propane dehydrogenation plants (manufacturing propylene from LPG) built or planned worldwide as of December 2020, 30 plants (or 67%) had been supplied by Nagaoka. Main customers for screen internals include process licensors, plant owners, engineering companies, and pressure vessel manufacturers.
Screen internals must function under severe conditions characterized by high temperature, high pressure, and high corrosion. Therefore, energy-related plants that use these internals generally replace them as frequently as once every two years at the earliest, either with new ones or spares that have been washed, repaired, and stored. Petrochemical companies that use certified products, such as Nagaoka Screen, are entitled to the process licensor’s guarantee against accidents and malfunctions that occur in the plants, whereas those using non-certified products such as a copycat product cannot receive this guarantee. Nonetheless, with non-certified Chinese internals recently available in the market, more than a few companies are opting to give these products a try. These companies think screen internals are consumables in the first place and non-certified products can be readily replaced with certified ones if there are any problems. For this reason, the Chinese manufacturers are increasingly becoming a force to be reckoned with for Nagaoka.
In the Water-related business, the company operates in two areas: water intake (11.3% of total revenue in FY06/21) and water treatment (4.1%). Water intake screens are the main products in the water intake business. These screens can be used, for instance, to increase the volume of water intake for wells or drain groundwater at construction sites; the company has a track record of receiving over 1,000 orders for projects in Japan. Replacement demand for these screens arises after more than ten years of use. In the water treatment business, Nagaoka manufactures and sells water filtration system CHEMILES, which can remove iron and manganese in raw groundwater without the use of chemicals. CHEMILES is being adopted mainly by water purification plants. Another product in this domain is AERSYS, developed jointly with the Tokyo Metropolitan Government’s Bureau of Waterworks. This system can remove over 99% of harmful substances from raw water through the use of only air, packing media, and activated carbon. Customers in the Water-related business include end users (mainly municipalities and private companies), engineering companies and general contractors, as well as well-drilling companies.
Revenue from overseas projects accounted for 84.0% of total revenue in FY06/21. By region, 52.2% of overseas revenue came from Asia (39.8% from China, and 12.4% from other Asia excluding Japan), 18.8% from the Americas, 16.0% from Japan, 8.7% from Europe, and 4.3% from the Middle East. Of total revenue, 48% was generated by China-based consolidated subsidiary Nagaoka Equipment (Dalian) Co., Ltd. The company’s manufacturing bases include the Dalian factory in China (main factory equipped with facilities for end-to-end production from screen manufacture to product assembly), the Vietnam factory (for screen manufacture), Himeji and Edogawa factories in Japan (for screen manufacture), and Hamada Co., Ltd. (main contractor for outsourced processing, welding, and assembly). Since Nagaoka’s products are made to order and require customization depending on the customer or use, the lead time from order to delivery typically takes between 10 and 14 months (average of one year).
Nagaoka’s roots date back to 1934 when Masuzo Nagaoka founded the predecessor company Nagaoka Kanaami Co., Ltd. The company faced two major crises in the past: one in 2004 when it filed for civil rehabilitation proceedings, and another from FY06/16 to FY06/17 when it posted losses for two consecutive years. Each time, it managed to survive by revamping the management team, receiving capital contribution from outside parties*, and conducting structural reforms such as closure of key domestic factories. In recent years, performance recovered from FY06/18 onward, and the company posted record-high earnings in FY06/20.
*In October 2004, the company received capital contribution from JAIC Business Rehabilitation No. 1 Fund managed by Japan Asia Investment Co., Ltd. (JAIC) and funded by the Organization for Small & Medium Enterprises and Regional Innovation, Japan. The second capital contribution came from major business partner Hamada Co., Ltd. (currently, Nagaoka’s parent company) in 2017.
Earnings trends
In FY06/21, revenue was JPY6.3bn (-2.7% YoY), operating profit was JPY810mn (-24.8% YoY), recurring profit was JPY937mn (-10.4% YoY), and net income was JPY678mn (-3.7% YoY). Revenue fell 5.4% YoY in the Energy-related business due to impact of the COVID-19 pandemic (slowdown in plant construction, labor shortages, and other factors), but grew 15.0% YoY in the Water-related business, which benefited from firm demand.
Company forecast for FY06/22 calls for revenue of JPY7.2bn (+15.0% YoY), operating profit of JPY933mn (+15.3% YoY), recurring profit of JPY1.0bn (+7.8% YoY), and net income of JPY710mn (+4.7% YoY). While business activities are slow in Europe and the Americas due to impact of the pandemic (inability to conduct marketing overseas), domestic water intake business remains strong. In the Energy-related business, progress in manufacture for large projects won in 2021 is contributing to revenue.
The quantitative targets for the final year (FY06/24) of Nagaoka’s current medium-term management plan are JPY10.0bn in revenue and JPY1.5bn in operating profit at an OPM of 14.9%. In the years spanning FY06/21 to FY06/24, the company expects to see revenue increase at a CAGR of 16.9% (1.3% in the Energy-related business and 66.8% in the Water-related business). The revenue mix of the Water-related business is projected to increase from 15.5% in FY06/21 to 45.0% in FY06/24.
Strengths and weaknesses
Nagaoka’s strengths, according to Shared Research are:
Manufacturing system that ensures high-quality production and on-time delivery, which are conditions for certification by global oil refining process licensors
Cost advantage over US and European rivals for having manufacturing and sales bases in China and other Asian countries
Strong uptake, particularly in Asia, of chemical-free water treatment system CHEMILES that has established a niche top position thanks to its low environmental impact and cost superiority
Weaknesses are:
Lack of countermeasures (such as launch of second-line brand) against price competition with Chinese suppliers
Lack of R&D resources necessary for starting new business
Difficult to achieve efficiency through automation, because of made-to-order production
(See the “Strengths and weaknesses” section for details.)
Key financial data
Note: Figures may differ from company materials due to differences in rounding methods.
Trends and outlook
Quarterly trends and results
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Figures may differ from company materials due to differences in rounding methods.
Cumulative Q3 FY06/22 results
Summary
In the Water-related business, the company continued to face difficulty conducting active marketing abroad. However, in Japan, sales were robust for products in the water intake business. In the Energy-related business, the company is gathering information on plant construction projects in various parts of the world, particularly China, in an effort to find opportunities to win orders. The company is also conducting sales activities while carefully considering the impact of soaring material prices, exchange rate fluctuations, and disruptions in the supply chain in China.
Results by segment
Water-related business
Overseas marketing continued to be affected by the company’s inability to send its salesforce from Japan. The company sought to cultivate projects in Vietnam through its local subsidiary Nagaoka Vietnam, and in Malaysia, through local distributors. However, activities have not picked up in the tough business environment. In Japan, however, sales were firm for products in the water intake business. The company, for example, has completed several water-resource repair projects.
Energy-related business
On the marketing front, the Energy-related business continued to suffer from the slowdown in constructions of new oil refineries and petrochemical plants in Europe, the Americas, and elsewhere, as the pandemic fueled concerns over prolonged stagnation of global economy. In China, which was first to see its economy recover, the company resumed sales activities and received a large order in March 2022 involving the replacement of a plant facility. On the manufacturing front, a large Chinese-related project that the company won in 2021 contributed to revenue.
Impact from the application of new Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020)
Full-year company forecast
Note: Figures may differ from company materials due to differences in rounding methods.
Note: Figures may differ from company materials due to differences in rounding methods.
The company forecast for FY06/22 calls for revenue of JPY7.2bn (+15.0% YoY), operating profit of JPY933mn (+15.3% YoY), recurring profit of JPY1.0bn (+7.8% YoY), and net income of JPY710mn (+4.7% YoY). While business activities are slow in Europe and the Americas due to impact of the pandemic (inability to conduct marketing), domestic water intake business remains strong. In the Energy-related business, progress in manufacture for large projects won in 2021 is contributing to revenue.
Initial forecasts versus actual results
Note: Figures may differ from company materials due to differences in rounding methods.
Nagaoka reported losses for two consecutive years in FY06/16 and FY06/17, because of an unstoppable deterioration in business performance, which exceeded the company’s forecasts. In February 2017, the former management team stepped down and Yasuhisa Umezu became president and CEO. The new management team implemented structural reforms, getting financing to turn around the business, and closing a main domestic factory (Kaizuka factory), among other efforts. From FY06/18, results overshot initial forecasts for the most part, and the company managed to achieve YoY growth in revenue and net income for three consecutive years.
Medium-term outlook
Note: Figures may differ from company materials due to differences in rounding methods.
The quantitative targets for the final year (FY06/24) of Nagaoka’s current medium-term management plan, FLIGHT VISION 2024, are shown below.
In the years spanning FY06/21 to FY06/24, the company expects to see revenue increase at a CAGR of 16.9% (1.3% in the Energy-related business and 66.8% in the Water-related business). Revenue in the Energy-related business is expected to remain roughly flat, trending around JPY5.5bn (55.0% of total revenue). Meanwhile, the company projects revenue in the Water-related business to increase from JPY969mn in FY06/21 (15.5% of total revenue) to JPY4.5bn in FY06/24 (45.0%), with overseas revenue and the water treatment business (such as CHEMILES) driving growth.
In the years spanning FY06/21 to FY06/24, the company expects to see revenue increase at a CAGR of 16.9% (1.3% in the Energy-related business and 66.8% in the Water-related business). Revenue in the Energy-related business is expected to remain roughly flat, trending around JPY5.5bn (55.0% of total revenue). Meanwhile, the company projects revenue in the Water-related business to increase from JPY969mn in FY06/21 (15.5% of total revenue) to JPY4.5bn in FY06/24 (45.0%), with overseas revenue and the water treatment business (such as CHEMILES) driving growth.
Further cultivation and expansion of existing businesses: Nagaoka aims to further improve and expand its products and services in the Energy-related and Water-related businesses. To meet the diversifying needs of customers, the company will further enhance the value it offers to customers by stepping up R&D and developing markets. It will broaden the product/service lineup to meet customer needs and expand market share.
Alliances with strategic partners: In addition to in-house efforts, the company plans to actively establish ties with outside parties in order to meet the diversifying needs of customers. In forging an alliance with a strategic partner, the company aims to establish a framework that is mutually advantageous in terms of earnings and business generation. It plans to draw up a growth strategy based on new ideas, without being trapped in the boundaries of existing businesses.
Exploration of new markets: With a new mindset, the company will aim to create a new revenue base. It will explore the possibilities of upgrading the current core business model; developing new markets within the scope of existing businesses; and entering completely different business domains. To do so, it plans to first create an environment conducive to new challenges by actively bringing in external resources and establishing an in-house incentive system to promote development of new projects.
In the Energy-related business, Nagaoka strives to prepare for future projects by expanding the lineup of products and establishing a system that could lead to more business opportunities. It plans to capture demand in new markets and for new products with a view to enhancing revenue opportunities. It will also take on the challenge of energy reforms involving decarbonization and new energy, which are much sought after in society. The company will also build ties with strategic partners in Japan and abroad, actively respond to customer needs, and build a revenue base for the medium term.
In the Water-related business, the company plans to expand revenue in Japan and abroad by promoting the bundled package (water intake + treatment systems), which it calls the Nagaoka Model. The model is based on Nagaoka’s successful project in Malaysia in which the company consolidated its water intake technology (honed in Japan through shallow well projects) and water treatment technology (backed by a track record of projects in Asia including Japan) into one package. In Vietnam, Nagaoka is currently taking part in a collaboration of industry, government, and academia (Nagaoka Vietnam, Hanoi Water Limited Company, and Thuyloi University), conducting a study on methods to collect river-bed water based on the Nagaoka Model. Also, the company aims to actively build relations with partners working in Nagaoka’s business domains in Japan and overseas, with a view to expanding earnings together.
Business
Business model
Business overview
History
Nagaoka is a manufacturer and supplier of metal filtration screens (product name: Nagaoka Screen) used in reactors of petrochemical plants (details to follow), water intake wells, and other applications. Operations largely divide into the Energy-related business and the Water-related business. The company’s roots date back to 1934, when Masuzo Nagaoka founded Nagaoka Kanaami Co., Ltd. In 1991, the trade name was changed to Nagaoka (former Nagaoka). In 2004, former Nagaoka filed for civil rehabilitation proceedings as the adverse effects of a family-run business caused performance to tumble. However, the company survived the crisis by securing a JPY400mn investment from the JAIC Business Rehabilitation No. 1 Fund managed by Japan Asia Investment Co., Ltd. (JAIC) and funded by the Organization for Small & Medium Enterprises and Regional Innovation, Japan. Following another downturn (recording consecutive losses in FY06/16 and FY06/17), Nagaoka implemented structural reforms, replacing its management team, receiving capital contribution from major business partner Hamada Co., Ltd. (currently, its parent company), and closing down a main domestic factory.
Energy-related business (84.5% of total revenue and operating profit margin of 23.7% in FY06/21)
In this business, Nagaoka manufactures “screen internals” for petrochemical plants that produce propylene (raw material for plastics) and paraxylene (feedstock essential to the process of manufacturing polyethylene terephthalate [PET; used in synthetic fibers and PET bottles]). Screen internals are the cylindrical filters installed in reactors at the heart of these plants. They serve to retain within the reactors such substances as catalysts for promoting chemical reaction under high temperature and high pressure, as well as adsorbents used in extraction and separation. Petrochemical plants consist of facilities for converting crude oil into petroleum products; crude oil is first converted into naphtha, which is then turned into various secondary and tertiary products by inducing chemical reaction. Screen internals are the core equipment that keeps catalysts in place to ensure optimal chemical reaction within the reactors. Nagaoka supplies these products to petrochemical plants.
Since screen internals are an important component in the oil refining process, only those manufacturers certified by process licensors (designers of the refining process) are authorized to make them. Only a few companies in the world have this certification. As one of the selected few, Nagaoka has supplied screen internals in 65 countries.
Water-related business (15.5% of total revenue and operating profit margin of 7.6% in FY06/21)
The Water-related business further breaks down to two areas: water intake (11.3% of total revenue in FY06/21) and water treatment (4.1%).
In the water intake business, Nagaoka mainly manufactures screens used for groundwater intake. These screens are used, for instance, to increase the volume of water intake for wells or drain groundwater at construction sites. The company has a track record of receiving over 1,000 orders for projects in Japan. Main applications of the product include usage in deep wells (facility for pumping up confined groundwater deep underground), shallow wells (facility for pumping up unconfined groundwater), infiltration galleries (facility for collecting river-bed water; suitable for high-volume collection), surface water intake (collection of surface water), and groundwater drainage (measures to drain accumulation of groundwater at construction sites [caused by earth-retaining walls and other structures that intercept groundwater flow]). Nagaoka has also developed the High-speed Seabed Infiltration System (HiSIS) jointly with Hitachi Zosen Corporation, applying its technology to pump up water that has infiltrated to the subsoil. HiSIS enables water intake without the problem of marine organisms attaching themselves to the water intake section.
In the water treatment business, Nagaoka manufactures and sells water filtration system CHEMILES, which removes substances such as iron and manganese from raw groundwater without the use of chemicals. Installations are underway at water purification plants. The company also manufactures and sells AERSYS, an aeration system jointly developed with the Tokyo Metropolitan Government’s Bureau of Waterworks. The system removes over 99% of toxic substances from raw water using only air, packing media, and activated carbon.
Core technology
Characteristics of Nagaoka Screen
Nagaoka Screen—the company’s mainstay product—is structured in such a way that triangular-shaped wedge wires are lined up against supporting rods. This ensures smooth flow of liquids and gases. In the water intake business, these screens with a high slot opening ratio help slow the water inflow velocity, prevent clogging, and reduce well loss, thereby facilitating stable water collection. Another feature of the product is its high pressure resistance, which becomes all the more important the deeper the installation depth gets. According to the company, Nagaoka Screen has advantages over conventional products in a number of ways.
Clog-resistant structure: The combination of triangular-shaped wedge wires and supporting rods allows for smooth flow of liquids and gases.
High slot opening ratio: Adjustable slot sizes enable high slot opening ratio compared with conventional wire mesh or perforated tubes. High slot opening ratio raises the efficiency of water intake (for water wells) and oil refining/petrochemical plant processes, reduces clogging, and contributes to long service life.
Strong and high-precision welding, as well as uniform structure: In-house developed technology allows high-precision continuous welding, which gives the screens the strength and precision not achievable with conventional wire mesh and perforated tubes.
Available in various shapes and materials: Screens can be manufactured in a variety of shapes such as cylinders and panels. Various applications are possible, since they can also be processed to withstand conditions such as high temperature and high pressure through the addition of reinforcement material or change in material all together.
Materials
Screen internals (main product in the Energy-related business) are mostly made of stainless steel, which is rust-resistant, durable, but expensive. The lineup for water intake screens (Water-related business) also includes low-priced products made of galvanized ordinary steel (iron).
Manufacturing method
Nagaoka Screen is manufactured by welding the triangular-shaped wedge wires onto the supporting rods using electrical resistance (electric resistance welding [ERW]). Continuous welding increases the screen’s precision (uniformity) and strength. The screen is shaped into a panel or cylinder and becomes the finished product. Although some steps can be automated, many of the processes require expert craftsmanship.
Technology gap
Nagaoka’s manufacturing bases include the Dalian factory in China (main factory equipped with facilities for end-to-end production from screen manufacture to product assembly), the Vietnam factory (for screen manufacture), Himeji and Edogawa factories in Japan (for screen manufacture) and Hamada Co., Ltd. (main contractor for outsourced processing, welding, and assembly). The certified products made in the Dalian factory are globally competitive, even in comparison with the same products made in Nagaoka’s domestic factories or rival products made in the US or Europe. The company says the technology gap between the domestic factories and the Dalian factory has narrowed; in fact, since the Dalian factory has been making products of comparable quality, most customers are currently choosing those products made in China. The company maintains its domestic manufacturing bases mainly to satisfy the needs of those customers preferring Japan-made products.
Lead time
Since the company’s products are made to order and require customization depending on the customer or use, the lead time from order to delivery is typically between 10 and 14 months (average of one year). Nagaoka’s motto is to strictly adhere to delivery deadlines while maintaining stringent quality control in order to satisfy the process licensor’s design specifications and avoid rework for not meeting certification standards.
Durability and replacement frequency
Screen internals must function under severe conditions characterized by high temperature, high pressure, and high corrosion. Therefore, energy-related plants that use these internals generally replace them as frequently as once every two years at the earliest, either with new ones or spares that have been washed, repaired, and stored (water intake screens are replaced every 10 or more years). As long as petrochemical companies use products, such as Nagaoka Screen, manufactured by certified companies, they are entitled to the process licensor’s guarantee against accidents and malfunctions that occur in the plants. However, if the petrochemical companies use non-certified products, they cannot receive the guarantee.
Main products and businesses
Screen internals
Distillates including light naphtha, kerosene fraction, and diesel fraction, as well as residual oil obtained from natural gas and oil distillation undergo catalytic reaction at the screen internals within the reactors of petrochemical plants. There, materials such as propylene, high-octane gasoline, and paraxylene are produced following the processes of adsorption, extraction, and separation. Propylene is a feedstock to make polypropylene, which is commonly used in a wide range of industries because of its durability, chemical resistance, and ease of processing. Finished products include daily life items such as DVD cases, plastic food storage containers, packaging films, and car bumpers. Polypropylene is also used in syringes, pumps for disinfectant containers, and droplet-proof partitions.
While there are many ways to produce propylene, methods broadly divide into by-product production (propylene made as a byproduct of ethylene production at conventional petrochemical plants) and on-purpose production (dedicated production of propylene). The OleflexTM* process developed by process licensor Honeywell UOP (hereafter “UOP”) falls under the on-purpose production category, and is used to make propylene or isobutylene, or both. The process converts propane (LPG) to propylene through dehydrogenation.
*OleflexTM is a trademark of UOP
Radial-flow-reactor unit (reactor for catalytic reformer units with catalyst regeneration capability) is a type of reactor used in oil refining and petrochemical processes. Catalysts are put to continuous use in the reforming reactor, and are then regenerated for reuse by going through a regenerator. Reactors typically used for reforming and regeneration are what is called a “radial flow reactor,” and one of the company’s products—Nagaoka Screen basket—is used as the internals for such reactors. The company says the product’s continuous vertical slot openings and smooth surface achieved through the Nagaoka Screen technology prevent clogging and damage of catalysts, facilitating their smooth movement within the reactors; major process licensors recommend the product for its high efficiency.
Internals for radial flow reactors
According to the company, Nagaoka Screen is optimally designed to retain catalysts in radial flow reactors. The screen’s sturdy structure enables stable performance and durability under high temperature operations.
Internals for down flow reactors
For down flow reactors, Nagaoka Screen is not only used for the support grids to retain catalysts, but is also widely applied in various petrochemical fields to hold in place molecular sieves, ion-exchange resins, and other substances. The internal components of down flow reactors must have a strong structure because the catalyst bed they support is subjected to heavy loads and pressure drop. The company says it seeks to identify needs of the customers and process licensors from the initial designing stage of a project, and reflects such needs in the product specifications.
Since internals are one of the most important equipment in the oil refining process, only those manufacturers certified by process licensors are authorized to make them. Process licensors, owning the rights to use the basic designs and patents associated with plant construction, include companies like UOP (US) and Axens (France). Manufacturers authorized by these process licensors are called certified suppliers. There are only a few certified suppliers of internals in the world; Nagaoka is the only company in Japan with this certification. Process licensors require the use of products made by certified suppliers as a condition for providing performance guarantee.
There is a wealth of process patents and knowledge associated with oil-related plants (example: OleflexTM), all of which are managed by the process licensors. Plant owners that build the plants first select the process. Once the process is determined, plant owners obtain the usage rights from the process licensors and proceed to select the engineering company, pressure vessel manufacturer, and component manufacturer (certified supplier) in that order.
Including past qualifications, Nagaoka has been designated as a certified supplier of screen internals by nine process licensors, covering the majority of process licensors associated with oil-related plants. The adoption of the company’s internals hinges on the plant owners’ choice of process and the selection of certified supplier thereafter.
Screens for water intake
Nagaoka’s products in the water intake business are mainly used in domestic construction projects to build groundwater intake facilities. In such projects, designs are drawn up by construction consultants of waterworks and sewerage based on the design guidelines stipulated by the Japan Water Works Association (JWWA), and the end users (water utilities) select an engineering company or a general contractor through a bidding process. Because Nagaoka’s products comply with JWWA’s design guidelines, the company is able to respond to orders from any customer channel, much like in the projects for oil-related plants. In terms of efforts overseas, Nagaoka has been developing ties with the organizations equivalent to JWWA in other countries using the network of the International Water Association (IWA). IWA is an NPO serving as a global network of water professionals from which Nagaoka has won a number of awards for its water-related technology.
Generally speaking, groundwater maintains good quality, has little change in water temperature, and does not require large storage or supply facilities. It is widely used in domestic, industrial, and agricultural applications. The company says the introduction of wire-wound screens using its proprietary technology has enabled the designing of efficient water wells. In the water intake business, the company established the Nagaoka-style water collection well technology, leveraging its technology and expertise in screen internals. The technology significantly increases the intake volume of shallow wells and infiltration galleries; it can also be applied in retrofitting projects to restore intake volume at existing facilities. In deep well screens, the slot width can be customized to suit the geological formation. The use of durable ring-base screens with a high slot opening ratio allows for efficient and stable well drilling.
Deep wells
Because Nagaoka Screen has a high slot opening ratio that prevents clogging, its water intake efficiency is roughly ten times that of slit pipes and other strainers. The slot width can be customized to suit each aquifer; the company is able to meet a wide range of market needs due to this feature. The screens have a durable structure that can withstand deep installation, can endure earthquakes and other disasters, and are rust resistant. Further, they achieve clog-resistant, stable water intake through the company’s sand control technology, allowing the intake of water alone without moving the sand in the sand layer surrounding the screens.
The company offers three types of screens for deep wells.
Ring-base screen (wire-wound screen with a reinforcement layer)
Ring-base screen is a well screen with a double-layer structure. With this product, the company has achieved a high slot opening ratio without sacrificing durability. The screen has a large intake surface, and is high performance. Its resistance to external pressure is equal to or greater than that of a pipe-base screen. The triangular-shaped slots prevent clogging; the durable structure ensures easy finishing/washing.
Well screen (wire-wound screen)
This product also allows for efficient water collection because of its clog-resistant triangular-shaped slots and high slot opening ratio. It can be customized to match desired specifications. Finishing/washing is also easy.
Pipe-base screen (wire-wound screen with inner perforated pipe)
Pipe-base screen has a perforated pipe fitted into a well screen. The inner base pipe reinforces the product’s durability and resistance to external pressure. The surface of the outer screen has triangular-shaped slots that prevent clogging.
Shallow wells
According to the company, its screens for shallow wells are optimally designed to match the aquifer and achieve stable groundwater intake because of its high strength and long service life. The main features of these screens are: the ability to intake water from the complete depth of the aquifer; high efficiency water intake (low intake loss); high slot opening ratio/large intake surface; strong structure resistant to earthquakes; and slow water inflow velocity that enables lasting and stable intake.
The company offers two types of shallow well screens.
Ring-base collector
The ring-base collector achieves year-round stable water intake from the complete depth of the aquifer. It is used to collect water from the relatively shallow, unconfined aquifer (river-bed water and free water moving through soil). Stable water intake is possible even when the water level drops during droughts.
Ring-base radial
Radial well consists of multiple cylindrical screens (radial screens) laterally projecting from the main shaft of the well. This has an effect of virtually expanding the well’s radius and thereby increasing the intake surface. The product proves effective in restoring old wells that have dried up due to clogging, or in generally increasing the intake efficiency.
Infiltration galleries
Ring-base screen
Infiltration galleries mainly extract river-bed water and banks. They can yield 10,000—200,000m3 of water per day, and achieve stable and efficient intake with limited intake loss and drop in water level. Screens used in infiltration galleries have a very large intake surface with an opening ratio of over 50%, and the inflow velocity is extremely slow at less than 1.0cm/sec. Because infiltration galleries are lighter than facilities made of reinforced concrete, installation is relatively easy.
Surface water intake
Nagaoka Screen is used to collect surface water for a range of applications and locations. The screen is finished into various shapes that match the surface water intake systems for waterworks, agricultural water, snowmelt, and other applications.
Water intake screen (for surface water intake)
By attaching a float, the screen can be used as an inlet for water collection from ponds and reservoirs, which undergo large water level fluctuations. The product allows for water extraction from the middle layer of the body of water.
Ring guard intake (for water intake at low-head dams)
This is a water intake system that integrates intake screens into a low-head dam built across a stream. The system extracts water using the durable ring base screen with a high slot opening ratio, while discharging excess soil and sand from a discharge gate. Ring guard intake is suitable for water intake from mountain streams.
Intake screen for small hydropower generators
Through flanging and tapping, Nagaoka Screen is customized for use as an intake screen for small hydropower generators.
Through flanging and tapping, Nagaoka Screen is customized for use as an intake screen for small hydropower generators.
HiSIS is a seawater intake system, which collects seawater that has passed through a filtration sand layer installed at the seabed. Marine organisms cannot attach themselves to the seawater intake section of the system, because the intake screens are submerged below the sand layer; as such, chemicals are not required to remove such organisms. In addition, filtration through the sand layer clarifies the seawater prior to collection. A unique method to clean the system enables high-speed intake, and also keeps the facility compact. Further, HiSIS can be built in modules, which gives more flexibility in designing the facility to suit the location. Nagaoka developed the system jointly with Hitachi Zosen Corporation. To date, pilot programs to test HiSIS have been conducted in Abu Dhabi, UAE (June 2014–March 2016) and Hebei Province, China (September 2014–September 2016).
Groundwater drainage
Retaining walls built in open-cut constructions for underground structures such as tunnel roads and subway lines may block groundwater flow. Upstream, such blockage could lead to damages like root rot and increased buoyancy; downstream, it could, for instance, dry up wells or cause land subsidence. The company’s products are used in measures to control groundwater at construction sites, including cases where the groundwater flow is obstructed by retaining walls and other structures.
Water treatment
CHEMILES
CHEMILES is a water treatment system that purifies groundwater to drinking water level with the use of oxygen and microorganisms. The system does not require chemicals, so its risk of generating harmful byproducts (such as trihalomethane precursors) and industrial waste is extremely low; it can also significantly reduce running costs. In 2010, CHEMILES won an award of excellence at the IWA-PIA global competition (hosted by the International Water Association [IWA], bringing together water-related experts, companies, and organizations from around the world) for its innovative technology to produce safe water. The company says CHEMILES has received wide recognition in Japan and Asian countries for its economic efficiency, space-saving design, and ultra-fast processing speed, and is being introduced in these regions for actual use.
Groundwater could contain iron, manganese, and ammonia nitrogen, as well as arsenic that is harmful to the human body. Conventional water treatment involves methods such as coagulation/sedimentation and high-speed filtration, using chemicals. These processes require chemical management, and treatment becomes difficult when the groundwater contains high concentrations of iron, manganese, and ammonia nitrogen. CHEMILES can remove these materials without chemical injection (the system has a track record of removing 40mg of iron, 4mg of manganese, and 6mg of ammonia nitrogen per liter of groundwater).
CHEMILES uses a special aeration nozzle (see diagram below), which raises the concentration of dissolved oxygen in raw groundwater to saturation level. This process makes it easier to oxidize the iron and manganese in their ionic state, and also promotes the nitrification of ammonia. Because the system uses the pressure of raw groundwater, it is also more economical and less damaging to the environment compared to conventional aeration. CHEMILES needs to undergo acclimation* (cultivation period), but once this process is completed, there is no need for further adjustment even when the condition of raw water changes with season. The additional feature of biological treatment allows for stable treatment performance even in cold regions and during winter. The system is also suitable for operation at facilities with just a small number of staff such as utilities at small towns and villages. Further, Nagaoka’s unique system cleaning technology enables fully automatic, maintenance-free operation without sacrificing the water treatment quality.
*Acclimation (cultivation period) here refers to the process of preparing the system for high-performance operation. It involves passing groundwater through the system to form an iron oxide and manganese oxide coating on the filtration sand, and growing the bacteria necessary for treating ammonia nitrogen.
In overseas projects, CHEMILES customers are mainly water utilities run by municipalities. To date, the system has been introduced to water purification plants in Tuong Mai (Hanoi, Vietnam) and Ketereh (Kelantan, Malaysia). In addition to the public sector, there is also demand from the private sector in Japan, and the company appears to be receiving inquiries from the linen and pharmaceutical industries.
CHEMILES Plus As
The company developed an arsenic removal technology, applying CHEMILES’s iron removal technology to arsenic, which can be adsorbed by iron oxide. CHEMILES Plus As ensures higher-efficiency removal of arsenic compared with conventional coagulation/sedimentation and high-speed filtration methods, producing safe water while reducing the running cost (cuts chemical usage by one-third to one-tenth of that in conventional technology). The system can be operated automatically, and is easy to maintain because it does not require chemical management. Sediments are not formed during water treatment, because of the reduced use of chemicals. The only waste product is the flocculated sediment in the wastewater during backwashing (cleaning process).
Energy-saving packed-bed aeration system AERSYS (applies special nozzle technology to treat VOCs and free carbonic dioxide)
Groundwater may contain volatile organic compounds (VOCs) such as trichloroethylene, which are harmful to the human body, or free carbonic dioxide (FCD), which could cause corrosion and other water quality problems at waterworks. Previously, huge equipment and large amounts of power and chemicals were necessary to remove these substances and bring up the water quality to meet regulatory standards. This had caused many problems including high construction and running costs, as well as cumbersome maintenance. In light of these circumstances, Nagaoka developed the energy-saving packed-bed aeration system AERSYS jointly with the Tokyo Metropolitan Government’s Bureau of Waterworks. The system can produce safe and good drinking water at low cost by removing over 99% of the above-mentioned harmful substances from raw water through the use of only air, packing media, and activated carbon. The main characteristics of AERSYS are shown below.
Energy saving: AERSYS can remove over 99% of contaminants in raw water at air (blower air)/water ratio of only 20 (realizing contaminant removal that more than exceeds the required level). Target removal level can be achieved in a single round of treatment. The system is not heavily affected by outside air temperature, since the air circulation inside the column helps sustain stable temperature within the system. According to the company, AERSYS can reduce electricity consumption by 60% compared with conventional systems.
Space saving: The air required in the water treatment is circulated for reuse inside the same column (contaminated air undergoes purification through a layer of activated carbon and is circulated for reuse in aeration). This eliminates the need for ancillary equipment and reduces required space.
Easy maintenance: Because AERSYS does not need chemical injection and can be operated automatically, maintenance is easy. The system allows for low cost and stable water treatment.
Environmentally friendly: The layer of activated carbon inside the column purifies the air circulated in the system. The system does not harm the surrounding environment, since it can remove contaminants from raw water without emission of contaminated air.