A flooded convenience store is seen in the aftermath of Typhoon Hagibis, which caused severe floods, near the Chikuma River in Nagano, on Aug 14. Photo: REUTERS file

Most firms affected by disasters want gov't to spend more on infrastructure

By Tetsushi Kajimoto

Three quarters of Japanese companies have been hurt by a string of natural disasters over the past two years, suffering damage to factories, office buildings, distribution networks and supply chains, a Reuters survey found.

Most of those companies suffered direct or indirect effects that lasted more than a week while the impact lasted more than a month for a third respondents. Most firms in the Reuters Corporate Survey said they want the government of Prime Minister Shinzo Abe to spend more on steps such as strengthening levees and repairing aged infrastructure.

Last month, Typhoon Hagibis caused 71 rivers to burst 140 levees over vast areas in eastern Japan, following massive floods and power outages from Typhoon Faxai in September. A year ago, Typhoon Jebi battered western Japan, killing at least 13 people and snarling operations at the area's biggest international airport. In July of last year, parts of western Japan were deluged with torrential rain, causing levees to break and landslides to destroy houses, killing over 200 people in Japan's deadliest weather disaster in 36 years.

The scars of the powerful storms, as well as occasional earthquakes, have brought home to corporate Japan the importance of infrastructure spending and diversifying logistics and supply chains.

A Panasonic Corp factory in northern Japan, inundated by Hagibis, will take about two months to repair, although it was too early to comment on the impact on the electronics giant's profits, Chief Financial Officer Hirokazu Umeda told a news conference last week.

East Japan Railway Co will have to scrap eight of its roughly 30 shinkansen bullet trains on its Hokuriku line that were flooded in a depot by Hagibis, at a cost of about 11 billion yen, a spokesman said. Nippon Steel Corp last week slashed its annual forecast for consolidated business profit by one-third to some $900 million, citing such factors as suspended operations due to Faxai.

Of the companies in the Reuters survey hit by natural disasters in the past two years, 62% said the impact had taken or would likely take more than a week to recover from while 32% said more than a month.

Some 57% of the companies find Abe's plan to spend $60 billion over three years on "national resilience" to be insufficient.

"The bulk of Japan's infrastructure was rapidly developed in the 1960s and '70s, so large-scale restoration is called for," a manager at an electric-machinery maker responded in the Reuters Corporate Survey.

A respondent at a chemicals company wrote, "Flood-prevention works will become increasingly important due to changes in global climate."

A combined 74% want the government to focus on reinforcing levees or refurbishing old bridges and other infrastructure.

Most of the firms do not have plans to guard against natural disasters, though one-third are considering diversifying supply chains, production and logistics bases.

"It boils down to enhanced risk management," wrote a manager at a rubber-products maker. "We'll look into resilience to natural disasters across Japan as establishing new production bases will be an option as we promote automation."

The survey, conducted from Oct 24 to Nov 1 for Reuters by Nikkei Research, canvassed 503 big and mid-size non-financial companies. Roughly half responded to the questions on disasters and infrastructure, on condition of anonymity.

© Thomson Reuters 2019.

©2019 GPlusMedia Inc.

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One would think this is the priority : get businesses back and running; pump the economy.


But wait ! The coffers are run dry: the string of lavish enthronement ceremonies and parties , . .

AND, wait, still !

the remainder has been promised to cover all the Olympics infrastructures.



8 ( +10 / -2 )

Part of Abenomics was spending money on infrastructure construction projects, in a hope that it would spur the overall economy.

Yet another broken arrow here!

I also really want to hear from the "rah rah rah" Japan Club fans here on what's so great about this now?

8 ( +9 / -1 )

If you look closely at the picture, you can just make out the tops of the heads of the teenagers squatting outside the front doors still using their ketais.

5 ( +6 / -1 )

Rivers break their banks at river junctions. These points need reinforcing works to make them stronger against collapse.

The ten Shinkansen trains will now be scrapped costing ¥15 billion. Better protection for costly assets when located next to a major river.

4 ( +4 / -0 )

Every nation will have to build of their infrastructure because of global warming including Japan.

Let us hope they do so before it gets worse.

1 ( +1 / -0 )

Before the cash gets to those needing it somehow gets into the pockets of those not needing. Am I alone seeing this?

1 ( +2 / -1 )

This is exactly what money should be spent on

0 ( +0 / -0 )

all of you who say abe sucks because of this ... Japan was hit by a hugh disaster every other country in the world would have suffered the same of even more :/

And of course it doesn't help but look at most other countries in the world, even here in Germany the infrastructure isn't half as good as in Japan !

That is crying on a super high level.

0 ( +1 / -1 )

And of course it doesn't help but look at most other countries in the world, even here in Germany the infrastructure isn't half as good as in Japan !

This would be just as bad elsewhere, but this happens every year in Japan. The government should be more prepared.

0 ( +0 / -0 )

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