Japan reconstruction efforts boost Taiheiyo operating profit

As reconstruction efforts for the Great East Japan Earthquake get underway, local producers are starting to receive a boost, the The Nikkei reports. 

Cement sale in the quake-struck Tohoku region increased by 10 per cent YoY  last month. Taiheiyo shipments to the region rose by 10 per cent in December on the back of emergency infrastructure. The company’s operating profit is likely to more than double YoY to JPY20bn for the April-December period.

For the full-year, ending 31 March 2011, the company is expected to report an 80 per cent rise in operating profit to about JPY30bn.

Although increased consumption has so far centred around catering to emergency measures such as the repair of ports and the construction of new levees, full-scale reconstruction Taiheiyo expects full-scale reconstruction to begin from the spring.

A powerful 9.0-magnitude earthquake hit on 11 March at 14.46pm local time, unleashing massive tsunami waves that crashed into the northeastern coast of Honshu, the largest and main island of Japan. The worst-affected prefectures were Miyagi, Fukushima, Iwate, Yamagata, Ibaraki, Chiba, Akita and Aomori in Japan’s northeast, with severe damage along some 600km of the coast, often as far as 7km inland, or even over 40km along estuaries. The population here before the disaster was almost 15m, with over 10 per cent living within 5km of the coast. The coastal city of Sendai in Miyagi prefecture (population 1m) was particularly hard hit.

The tsunami inundated 400-500km2 in four prefectures. About 190km out of 300km of embankments on the seafront in Iwate, Miyagi and Fukushima were destroyed, at least in part. Miyagi prefecture was the most affected with 300km2 of land flooded, and 70 per cent of the flood remaining 10 days after the event.

In an interview with International Cement Review magazine shortly after the earthquake, the Japan Cement Association said that for FY11, the impact of the earthquake disaster, the economic slowdown and other factors are expected to result in a slight decrease in demand. Over the medium- to long-term, however, the economic recovery, demand fuelled by reconstruction from the earthquake and other factors are expected to buoy cement demand to the range of 40 to 50Mt.