In the second half of the 19th century, cholera swept across the planet, killing millions. In 2020, a novel coronavirus outbreak resulted in one of the worst global health crises in recent history. Both pandemics accelerated much-needed change, driven by pioneering companies.
The shocks of Covid-19 have not only compelled governments and boardrooms to discover new ways to protect lives from disease, but also pushed them to build a more sustainable and fairer world. Much needs to be done to sustain life on our increasingly crowded and wealthy planet. Our food and water systems, to start with, must be upgraded to reduce their environmental impact while becoming more resilient to climate change.
These are not new tasks, but the pandemic has clearly exposed the extent of the challenges. Over the past year, agricultural commodity prices have reached record highs, while people in hundreds of millions of households in many countries face acute under-nourishment. As for water, washing hands under a running tap is the first line of defence against infection, but it became clear during the pandemic that many do not even have that necessity. The statistics remain harrowing: one in nine people globally lacks access to clean water, a third have no access to a toilet, and a child dies every two minutes from a water-related disease.
Revealed by the pandemic, vulnerabilities such as these have resulted in a broad shift in mindset. “Building back better” to protect our natural environment and ensure sustainable growth is now a paradigm firmly shared by companies and publics.
As the world emerges cautiously from the pandemic, one Japanese company — Kubota — is ready to meet these urgent planetary issues head on, just as it did at its origins. The company was established in 1890 in the midst of a devastating cholera outbreak in Japan. To fight this scourge, Kubota began mass-producing iron piping for Japan’s new water system, helping to reduce water-borne diseases in the country.
Since then, the Kubota Corporation has evolved technologies contributing to the life-sustaining domains of food, water and the environment. A relentless focus on these areas has enabled the Osaka-based company to become the world’s top supplier of farming equipment and water infrastructure, as well as a leading maker of engines, small construction equipment and utility vehicles. Nearly 70 per cent of its sales are from overseas markets in 120 countries. For the year that ended in December 2020, the company recorded sales of ¥1,853.2bn and operating profits of ¥175.3bn, with 67.9 per cent of sales generated overseas.
Since the time of cholera, Kubota has been an “Essentials Innovator for Supporting Life”, supporting humanity and the planetary environment. How then does it define its purpose in this time of coronavirus?
“Today the world faces an unprecedented crisis in the form of novel coronavirus disease [Covid-19],” says Yuichi Kitao, President and Representative Director, Kubota Corporation. “The Kubota Group is committed to playing the role of an ‘essentials innovator for supporting life’ in the face of crises such as these by driving further innovation. We will contribute by focusing our comprehensive capabilities in the areas that underpin humanity: food, water and the environment.”
In its vision entitled GMB 2030, published in February, President Kitao identified three business pillars: “Enhancing the productivity and safety of food,” “Promoting the circulation of water resources and waste,” and “Improving urban and living environments.” Sustainability is at the heart of all three. Kubota hopes to become an “essentials innovator” in sustaining life, while achieving carbon neutrality as a company by 2050.
The World Bank estimates that we will need to produce 70 per cent more food by 2050 to satisfy the growing population. Yet the effects of climate change threaten to reduce crop yields sharply. Added to this challenge is the dwindling number of farmers, as more and more people move to cities and fewer young people replace retiring farmers. Agriculture also has a sizeable carbon footprint, with estimates that it is responsible for about 18 per cent of global emissions. Overcoming these challenges in agriculture, automation and digitalisation will be key. Application of such smart technologies can reduce fuel, fertiliser and pesticide use, thereby lessening agriculture’s environmental impact, while improving yields and quality of produce.
Kubota has been at the forefront of such smarter farming, especially for rice — a vital staple that today provides a fifth of all calories in the diets of 3.5bn people, or half of mankind.
In 2014, Kubota launched the KUBOTA Smart Agri System (KSAS) service, a cloud-based support system for rice farming that integrates and visualises IoT data collected from Kubota’s farm equipment. Already more than 2,300 farms in Japan are using this system to save labour and achieve higher quality harvests. KSAS digitally tracks how crops have been grown, including pesticide use, helping farmers in audits that verify the safety of produce. In the future, the system will be part of an agri-platform bringing together agricultural machinery sharing and harvest sales data.
Beyond rice, Kubota is quickening its pace in developing sustainable farming solutions across supply chains. The goal is to achieve digital transformation from farm to table, and the company is doubling down on innovations to that end.
“For the production of crops such as rice, wheat and fruit trees, we will develop automated and unmanned agricultural machinery, and provide automated management systems that utilise AI,” says President Kitao. “Establishing an ‘open innovation centre’, we will strategically invest and form partnerships to provide solutions for the entire food value chain. An ‘Open Agri-Platform’ will generate value not only within the agricultural sector but also with other industries.”
In the past two years, the company has formed alliances with leading tech firms such as Microsoft and NVIDIA. The latter partnership will put Kubota ahead in the race to develop a fully autonomous tractor. The tractor in development will be capable of operating without human supervision, all the while analysing weather data and crop conditions using NVIDIA’s Edge AI and graphics processing units. The computing power allows data to be analysed at site, in the fields rather than in a distant cloud, allowing millisecond-level responses to changes in local temperature and weather. In addition, the technology can handle the severe shocks and other harsh conditions of agricultural work. Such self-driving equipment will be a boon for the many regions facing farmer shortages.
Unlike cereal farming, fruit farming lags behind in automation and efficiency gains, and is still heavily dependent on manual labour. Automation in the sector is difficult in part because of the way fruits grow, in irregular bunches randomly on vines and trees, and also due to the limitations of physical space in orchards. Kubota’s compact tractors are already being used for certain fruits, such as grapes, olives and papaya in South America and Europe. But Kubota is working on more futuristic labour-saving solutions. Last year, the company and Dutch Agtech company Aurea Imaging announced a strategic partnership to demonstrate the feasibility of autonomous orchard and farming systems using drones and IoT. Aurea Imaging provides smart orchard services such as crop protection, blossom thinning and root pruning by creating prescription maps, using AI to analyse data collected from drones and IoT sensors.
Another vital smart farming trend is factory farming in urban areas, with “vertical farms” set up in or near major cities to provide a stable supply of fresh produce close to dense populations. Growing food indoors means production, and therefore prices, is less affected by the kind of disruptive weather events that climate change brings. In this highly anticipated space, Kubota invested in PLANTX, a Japanese start-up developing a plant cultivation system using artificial light and growth-rate management. The system is separated into rooms where environmental conditions are controlled, resulting in higher productivity than in conventional plant factories.
It took only three decades for the coverage of Japan’s water and sewage systems to jump from a quarter of all households in the 1950s to over 90 per cent in 1980. That remarkable transformation was achieved in large part through Kubota’s contributions, including the development of highly durable, earthquake resistant water pipes and infrastructure. Over the years, the company has been engaged in replacing older systems, as well as operation and maintenance businesses in Japan. All of this adds up to unparalleled know-how in constructing water systems from scratch, as well as in upgrading and operating existing ones through Kubota’s cutting-edge digital technologies.
As a maker of pipes, pumps, valves and water treatment facilities, and by also providing design, construction, operation and maintenance of plants, Kubota is a one-stop water infrastructure provider. Combining these capabilities with digital transformation will enable the operation of sustainable water systems, often comprised of very large physical assets distantly placed across large territories.
The KUBOTA Smart Infrastructure System (KSIS) promises to achieve such benefits. This unique IoT-based system provides remote monitoring, diagnosis and control services for water and environmental equipment. Using IoT, various water plants and equipment can be monitored remotely, operational status can be visualised in real time, accumulated monitoring data can be analysed to predict irregularities in advance, and equipment repairs and upgrades can be planned quickly and efficiently. KSIS thereby ensures improved operational efficiency and life cycle costs.The goal is not just to build resilient water systems, but regenerative ones that contribute to a circular economy.
“We are hoping to promote the circulation of water resources and waste through the creation of a platform to support the entire water and waste cycle,” says President Kitao. “For waste generated from agriculture, water circulation and economic activities, we will build a total solution for resource recovery and reproduction based on the recovery technology of phosphorus or valuable metals, combined with technologies owned by other companies.”
Kubota's technologies to recover energy sources such as methane and materials such as phosphorus from wastewater at treatment plants, to generate electricity and fertiliser, can contribute to a circular economy. Capabilities, such as Kubota’s, to sustain every drop of water across its lifecycle — from source through water pipes to households back through sewerage systems and treatment plants — will be vital in designing the regenerative water systems of tomorrow.
The company’s commitments to sustainability have not gone unnoticed, with various awards and inclusion in leading ESG indices. The international nonprofit CDP awarded Kubota in 2020 the highest valuation for the third time in Water Security. Multiple ESG indices, including the Asia Pacific branch of the Dow Jones Sustainability Index and FTSE4Good, have selected Kubota for their lists. The company is also one of the early backers of the climate-related disclosure recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
Even with such credentials, realising Kubota’s new vision to become an essentials innovator for supporting life will not be easy. But the resolve is unquestionable.
“We will accelerate our activities toward the realisation of our vision by mobilising the collective strength of the 40,000-strong Kubota Group,” says President Kitao. “We will push forward in the belief and expectation that we will develop as a sustainable company.”