Team members:
Muhd Azfar
Goh Peilin
Rachel Hoa
Ivan Ong
Li YanZhuo
Agenda
• Background
•Environmental impact
•Economic impact
1) Yen
2) Manufacturing
3) Agriculture
4) Tourism
•Counter measures
•Comments & Conclusion
Background
What Happen?
1/4
Environmental impact
Soil contamination:
• Leakage of cesium-137
• Affected estimate of 2000 locations
• Contaminated cow delivered and sold to consumer around Japan
2/4
Environmental impact
Water Pollution:
• Waste ( house, decompose bodies) washed to ocean making
their way to west coast of U.S
• Radioactive ( Iodine-131) leakage to ocean
• Authorities released 11500 Tones of
contaminated water
3/4
Environmental impact
Destruction of environment:
• 1,800 homes are reported to haven been destroyed in
Minamisoma, Fukushima prefecture
• Fire engulfed swatches of the coast in Miyagi prefecture
4/4
Environmental impact
Case study: Radiation from the Fukushima leak detected in at
least 15 U.S states
•Radiations detected in milk
•Considered safe and pose no threat
•Authorities fear food chain contamination
1/2
Economic Impact
Japan service consumptions and industry export contributing a large
percentage of GDP
Free fall of stock market.
• Benchmark Japanese stock Nikkei 225
shed an estimated 634points
Brought Japan to recession.
• GDP fell by 0.9%.
• Low purchasing confidence and power
• Export suffered due to break in supply chain.
2/2
Economic Impact – Yen (¥)
Pre-disaster
31 Jan 11: $1USD to ¥82.07.
• Export very competitive
• Attractive for tourist & domestic consumption.
• Local overseas investment
After-disaster
15 March 11: record high of $1USD to ¥76.25
• Exports less competitive
• Every ¥1 Appreciated , Toyota loses about ¥30 billion earnings per quarter.
Benefits of Strong Yen
• Domestic companies: Cheaper to engage in FDI
• Airline industry: cheaper to import fuel and
landing charges in foreign airport
1/2
Economic Impact
Impact on Manufacturing
• Closed down manufacturing plants
• Toyota & Honda halt 45% of its global productions.
• Shortfall of power supply, decrease 2.5% of manufacturing output.
Toyota’s Prius
• Made in Japan.
• Production might not return to pre-disaster until the end of 2011
Other Toyota models
• 15% of the parts were made in Japan.
• Automobile output dropped 60.1%, from 732,000 to 292,000 vehicles.
• Export dropped by 67.8%, from 392,000 to 126,000 units.
2/2
Economic Impact
Japan
• Production halt,
• Exporting could not be carried out
• Stagnated their economy.
US
• 35% of its import from Japan automobile.
• short of automobile supply.
• Freeze the supply chain, creating an impact greater than the Lehman Brother
incident or the 911 attacks.
Other countries
• Companies shift production line to other countries
• Nissan and Honda shift production line to Thailand, China or Mexico.
1/2
Economic Impact
Impact on Food
• Fruits, vegetables, dairy, animal and aquatic
were found to be contaminated by radiation.
• Around 40 international countries
and regions imposed import restriction
on food import from Japan.
• Exports from Japan plunge 16.6% to ¥30.6 billion
($382.5m) in may as compared to 2010.
• (In 2010, Japan was still gaining a small increase of 0.9%
from 2009 to $245m for vegetables, fruits, processed foods
and livestock)
2/2
Economic Impact
International business perspective:
• Les Amis halts Japanese food import for their restaurant Les Amis, a
French fine-dining restaurant, is now using Australian Wagyu beef
instead.
• Japanese products were also drop from their menus.
• The Sakae Sushi chain has substituted it with
imports from Taiwan and Canada
• Japan had to import many materials from overseas prior to the disaster.
• Vietnam export to the Japanese surged 20% .
• South Korea also benefited as food export to Japan jump 38%.
Economic Impact
• The cherry blossom season in Japan is around April
• Tourists from the world would fly in to witness the beautiful scenery annually.
• However prior to the disaster in March, this year Japan tourist amount falls
drastically
• In addition, the disaster also destroyed many tourism spots, making Japan less
attractive to tourists. E.g. Beach resort of Okumatsushima
Economic Impact
Impact on Tourism
• In January 2011, the amount of tourists visiting Japan declined to around 714,000
• The amount fall 2 fold down to 353,000 in March and subsequently 296,000 in April.
• Amount was a 50.4% and 62.5% drop compared to the same period in 2010
respectively.
Economic Impact
Impact on Tourism
• The Japanese have a strong culture sense of responsibility to their country
• Countries like Australia, whom in 2010 gain a 12% increase in Japanese tourist and
countries are expecting a significant drop of Japanese tourists.
• Local consumptions were also affected.
• It is due to the lack of tourists and local low purchasing confidence that bring sales
down 2.6% compared to last year in September.
Counter Measures
• Many actions had being taken by the Japan’s government; people, company and
even foreign countries
• WorldBank estimated damages to amount to USD$235billion while
reconstruction efforts can take up to 5 years.
• Company with production facilities began reconstruction efforts
• Price of traveling to Japan for holiday was cut as much as 50% to stimulate
demand
• Test had being conducted nearly daily to detect radiation contamination on food
• In an article, an Japanese lawmaker Yasuhiro Sonoda drunk a glass of water
taken from a radioactive puddle inside a reactor building.
Counter Measures
I intend to represent Japan to
joins talk towards a TransPacific Partnership (TPP)
trade agreement
The agreement will help
Japan leverage export level to
pre-disaster level
Prime Minister Yoshihiko
Comments & Conclusion
Summary of Impact:
Cut power supply
Manufacturing &
Tourism industry
affected
Tsunami
Destroy Buildings
Manufacturing &
Tourism industry
affected
Nuclear Crisis
Radiation
Contamination
Agriculture industry
affected
Earthquake
Comments & Conclusion
Comments & Conclusion
Comments & Conclusion
Comments & Conclusion
Unresolved Issue/ Problem predicted
1. Trade deficits
2. Incapability and time need to fully clean up nuclear
contamination
3. Cost and time needed to fully reconstruct
4. Predicted economic crisis 2010
Thank You