Tepco To Raise Generating Capacity 20% By April-End
TOKYO (Nikkei)--Tokyo Electric Power Co. (9501) said Saturday that it will bring onstream by the
end of April two fossil-fuel power plants halted by the March 11 earthquake, lifting its capacity 20%.
Tepco will resume operations at its Higashi Ogishima plant, powered by liquified natural gas, in
Kanagawa Prefecture by the end of March and at its oil-powered Kashima plant in Ibaraki Prefecture
next month.
Tepco operates this conventional power plant in Chiba.
By also boosting utilization rates at other fossil-fuel plants, the utility plans to increase its overall
output to 42 million kilowatts by the end of April. This amounts to about 70% of its pre-quake level.
Tepco has a number of fossil-fuel plants that went out of commission after the quake, including ones
in Fukushima and Ibaraki prefectures. If the two resume operations, the firm's total capacity will rise
some 6 million kilowatts.
The utility says it is not certain whether all plants will be up and running by the summer peak season.
Additionally, Tepco will raise utilization rates at currently operating plants by shortening inspection
periods. It is also acquiring gas turbine power generation systems to ease the electricity shortage.
The company generally needs to supply 50 million kilowatts of power to meet demand in winter and
55-60 million kilowatts this summer.
Projecting a protracted power shortage, Tepco says rolling blackouts will be inevitable in Tokyo's 20
wards, excluding central business and office districts, in summer.
(The Nikkei March 20 edition)
The need for a grand coalition became clear with the DPJ's loss in the upper house election last
summer, but Kan and the rest of the party leadership had shown little interest in bridging the Diet
divide.
(The Nikkei March 19 morning edition)
U.S. Forecasters Cut Japan GDP Outlook
NEW YORK (Nikkei)--American financial institutions and others have begun downgrading their 2011
growth forecasts for Japan by 0.2 to 0.5 percentage point, with some estimating that economic
losses from the earthquake and nuclear crisis will reach up to 17 trillion yen.
Wells Fargo & Co. has lowered its growth projection for price-adjusted gross domestic product from
1.2% to 0.9%. The economy of northeastern Japan, which bore the brunt of the March 11
earthquake and tsunami, is smaller than the area hit by the 1995 Great Hanshin Earthquake.
Offices in Tokyo's Marunouchi cut power usage to avoid a blackout.
But the psychological and economic blow from the nuclear crisis could be significant, says Scott
Anderson, senior economist at Wells Fargo.
On top of destruction to infrastructure and facilities, Japan faces a slowdown in consumer spending
and corporate activity that may bring economic losses to 15 trillion yen, compared with the 1995
quake's 10 trillion yen, Anderson says.
JPMorgan Chase & Co. has cut its growth forecast from 1.7% to 1.4%. The figure was revised down
sharply for the first half but bumped up to more than 3% for the second half on the expected boost
from rebuilding efforts.
U.S. research firm IHS Global Insight Inc. estimates damage to reach at least 200 billion dollars, or
roughly 16 trillion yen. It projects that growth will dip between 0.2 and 0.5 point compared with before
the disaster.
But should the nuclear crisis escalate, it may have an adverse impact on the growth rate, IHS Chief
Economist Nariman Behravesh warns.
U.K.-based Barclays Capital now believes that quake-related damage may reach up to 17 trillion yen
instead of the previously projected 15 trillion yen. It has downgraded Japan's growth forecast from a
pre-quake 2% to 1.7%.
Citigroup Inc. is sticking with its 1.7% growth projection. And JPMorgan and others have upgraded
their forecasts for 2012, citing the effects of fiscal spending, monetary easing and rebuilding.
(The Nikkei March 19 morning edition)
Parts Supply Woes In Japan Cascade Across Globe
TOKYO (Nikkei)--The disruption in supplies of electronic parts and materials caused by last week's
earthquake has started to affect overseas manufacturers.
Northeastern Japan, which was devastated by the temblor and resulting tsunami, is home to many
factories that make cutting-edge functional materials and components with high global market
shares.
The supply disruption is affecting overseas production.
U.S. auto giant General Motors Co. said Friday that it will temporarily shut an assembly plant in
Louisiana from Monday, citing a lack of parts shipped from Japan.
A vehicle is made up of 20,000 to 30,000 parts. Even assembly plants far from the disaster zone can
be brought to their knees by the lack of a single component.
A 2007 Niigata Prefecture tremor shut down Riken Corp.'s (6462) piston ring factory. With Riken
controlling 50% of the domestic market for the component, the closure led Toyota Motor Corp.
(7203) and 11 other firms to idle production for one week.
As of Friday, lithium ion battery maker Hitachi Vehicle Energy Ltd. was still inspecting equipment at
its quake-hit main plant in Ibaraki Prefecture, with no restart date in sight. The facility was churning
out about 100,000 units a month for a hybrid vehicle to be released by General Motors this year.
Alpine Electronics Inc. (6816), which supplies car navigation systems for Japanese and German
luxury vehicles, has made little headway in restoration efforts at its Iwaki, Fukushima Prefecture,
factory. With radiation leaking from the Fukushima Daiichi nuclear power plant, part of the city has
been designated a risk area, requiring residents to stay inside. Gasoline shortages and water supply
cuts are compounding the problem.
Renesas Electronics Corp. (6723) has six factories that have remained closed because of the quake
and subsequent rolling blackouts. The firm controls 30% of the global market for automotive
microcontrollers and 60% for system chips used in car navigation systems.
Parts shortages will likely affect global production of smartphones and tablet devices. The rolling
blackouts are making steady production difficult for Toshiba Mobile Display Co.'s plant in Fukaya,
Saitama Prefecture. The firm ranks fourth worldwide in small and midsize LCD panels with a market
share of 9.4%.
The tremor wreaked havoc on a Hitachi Displays Ltd. plant in Mobara, Chiba Prefecture. A portion of
the facility's ceiling fell, crippling production lines.
U.S. research firm IHS iSuppli warned in a report Thursday that a prolonged halt in the production of
Japanese-made components would cause supply shortages for Apple Inc.'s iPad 2.
It remains unclear when IHI Corp. (7013) will restart aircraft engine parts factories in Soma,
Fukushima Prefecture. Turbine blades made there are difficult to produce at other factories. IHI
manufactures a portion of the engines made by foreign firms, such as U.K. firm Rolls-Royce Plc and
U.S.-based General Electric Co.
(The Nikkei March 19 morning edition)
Supply concerns grow as Japan lacks parts,
power, people
Fri, Mar 18 2011
By Mariko Katsumura and Hyunjoo Jin
TOKYO/SEOUL (Reuters) - From Apple Inc's (AAPL.O: Quote, Profile, Research, Stock Buzz) new iPad to Chevrolet
pick-ups and many of the world's airplane kitchens, concern is spreading down the global manufacturing supply chain
about the impact from Japan's earthquake last week.
Plant shutdowns across Japan following the earthquake, tsunami and nuclear crisis threaten supplies of everything
from semiconductors to car parts to manufacturers across the globe.
Even where factories in Japan are operating, power outages, shortages of fuel and raw materials and ruptured
logistics mean products and parts face delays in getting to customers.
Honda Motor Co (7267.T: Quote, Profile, Research, Stock Buzz) said on Friday it extended a production halt in
Japan, where it makes more than a fifth of its cars, for a further 3 days until next Wednesday.
And, citing a memo distributed by the automaker, the Wall Street Journal reported Honda had warned U.S. dealers it
was not sure if it could resume full production at some of its Japanese plants before May.
Japan's grip on the global electronics supply chain is causing particular concern. The world's third-biggest economy
exported 7.2 trillion yen ($91.3 billion) worth of electronic parts last year, according to Mirae Asset Securities.
"Should the Japan crisis be prolonged, I expect a shortage of electronic parts in the second quarter," said James
Song, an analyst at Daewoo Securities, noting Japan provides 57 percent of the world's wafers, used to make the
chips that go into mobiles phones, cameras and other electronic devices.
Apple may face shortages of key parts for its newly-released iPad 2, according to a report from research firm IHS
iSuppli.
Several parts of the new version of the popular iPad tablet PC come from Japan, including the battery and the flash
memory used to store music and video on the device.
"Logistical disruptions may mean Apple could have difficulties obtaining this battery, and it may not be able to secure
supply from an external, non-Japanese source," iSuppli said.
Toshiba Corp (6502.T: Quote, Profile, Research, Stock Buzz), one of the companies that produces the NAND flash
memory used in the iPad 2, according to IHS iSuppli's research, had briefly shut a flash memory facility in Japan, and
warned it could face problems getting raw materials.
Apple launched the iPad 2 in the United States last week to strong demand, with many stores selling out and analysts
estimating sales of 1 million units during the debut weekend.
Several other iPad 2 parts are sourced from Japan, said the IHS iSuppli report, noting some of these, particularly the
chips, could be procured from alternative suppliers.
Goldman Sachs warned of potential bottlenecks in the supply of silicon wafers, conductive film used in LCD circuits
and resin used to connect chips to boards -- products made by Japanese companies such as Shin Etsu (4063.T:
Quote, Profile, Research, Stock Buzz) and divisions of Sony (6758.T: Quote, Profile, Research, Stock Buzz), Hitachi
(6501.T: Quote, Profile, Research, Stock Buzz) and Mitsubishi (7280.T: Quote, Profile, Research, Stock Buzz).
In Taipei, shares of electronics supply companies rebounded from recent falls, with Hon Hai Precision (2317.TW:
Quote, Profile, Research, Stock Buzz) and touch panel maker Wintek (2384.TW: Quote, Profile, Research, Stock
Buzz) both gaining more than 1 percent.
EVEN THE KITCHEN SINK
Japan's top car manufacturers including Toyota Motor Co (7203.T: Quote, Profile, Research, Stock Buzz) and Nissan
Motor Co (7201.T: Quote, Profile, Research, Stock Buzz) are struggling to restart production amid a shortage of
parts, labor and power following the 9.0 magnitude earthquake and tsunami.
The largest U.S. automaker, General Motors Co (GM.N: Quote, Profile, Research, Stock Buzz), said it would
temporarily idle a pick-up truck plant in Louisiana, where it builds the Chevrolet Colorado and GMC Canyon models,
due to a parts shortage stemming from the crisis in Japan.
"Like all global automakers, we will continue to follow the events in Japan closely to determine the business impact,"
GM said in a statement on Thursday.
North American output is likely to be affected unless Japanese suppliers revive their plants and send parts within 10
days, Wolfe Trahan & Co analyst Tim Denoyer said in a note.
Renault Samsung, the South Korean unit of French car maker Renault SA (RENA.PA: Quote, Profile, Research,
Stock Buzz), said it will cut back on weekend and overtime production because of a potential parts shortage, and
GM's South Korean unit said it was considering a similar move.
"We have an inventory until the end of March. But we expect the crisis to be prolonged until April before being
normalized in May," said a spokesperson for Renault Samsung, which makes one in every 10 Renault vehicles.
A Japanese company that makes galleys for the long-awaited Boeing (BA.N: Quote, Profile, Research, Stock Buzz)
787 Dreamliner, said it could face delivery delays due to scarce gasoline supplies.
Jamco (7408.T: Quote, Profile, Research, Stock Buzz), which ships the galleys from Yokohama port after making
them at a plant in Murakami, Nigata, in northwest Japan, said production was unaffected, but delivery could be
hampered by gasoline supplies and higher prices.
Shin-Etsu Chemical Co. (4063), the world's leading maker of silicon wafers, said it does not know
when its Shirakawa plant in Fukushima Prefecture will resume operations. The plant has been the
single largest producer of silicon wafers in the world, making the equivalent of 700,000 to 800,000
300mm wafers a month.
The Utsunomiya plant of the U.S. wafer maker MEMC Electronic Materials Inc. is also out of
operation. That plant was making 200,000 wafers a month.
Before the earthquake, the world was supplied with roughly 3.7 million wafers a month. As of now,
20-30% of that production is offline.
Spot prices for DRAM, NAND flash and other semiconductor memory devices have risen 5% in
recent days. DRAM makers are watching the situation and holding off on shipments, according to an
official at a leading South Korean producer. Meanwhile, speculative buying of memory devices has
picked up because of the decline in wafer production.
The catastrophe is also having an impact on the market for PC hard drives. The hard drive disks are
fabricated on aluminum platters, and the two main companies that split the global market both
suffered setbacks.
Operations remain suspended at the Moka plant of Kobe Steel Ltd. (5406) in Tochigi prefecture,
which is the company's main production base for the aluminum disks.
Also shut down is the Nikko plant of Furukawa Electric Co. (5801), where all of the company's
aluminum disks are made.
Meanwhile, the companies that process the aluminum disks to make the actual hard disks face
power outages, and may not be able to produce enough disks to meet market demand.
European, U.S. Firms Step Up Oil, LNG Supplies To Japan
NEW YORK (Nikkei)--European and U.S. energy firms are expanding their supply of crude oil and
liquefied natural gas to Japan to meet increased demand in the wake of last week's massive
earthquake.
U.S. oil company Chevron Corp. has arranged for a tanker to ship crude oil from Indonesia to Japan
for use in Tokyo Electric Power Co.'s (9501) power plants and is in negotiations to secure additional
vessels. According to a Chevron spokesman, the moves are in response to energy demand in
Japan, where fuel is in short supply following the earthquake and tsunami.
Anglo-Dutch firm Royal Dutch Shell Plc is making preparations to direct as many extra oil and LNG
tankers as possible to Japan. The company supplies the fuels to Japan under long-term contracts,
but is supplying extra beyond its normal quotas. The energy giant is in discussions with the
Japanese government and expects to have details ironed out within a few weeks.
According to the International Atomic Energy Agency, Japan will need an additional 200,000 barrels
of oil equivalent a day for plants to offset electricity generation lost from nuclear power plants
knocked offline by the natural disaster.
(The Nikkei March 19 morning edition)
******************
The escalating crisis at the crippled Fukushima Daiichi nuclear plant has made a mockery of Tokyo
Electric Power's claims - backed with expensive propaganda including museums aimed at children that it can safely operate reactors on these seismically active islands.
Last Friday's powerful earthquake and the huge tsunami it unleashed were undoubtedly a formidable
double-whammy. But even a magnitude 9 quake hardly lies beyond the boundary of the "Largest
Conceivable Earthquake" that Tepco claims its plants are designed to withstand.
And while it will take time to establish all the links that make up the chain of disaster engulfing the
Fukushima plant, it is hard not to think that Tepco's chronic problems with safety and disclosure
could be factors in the current crisis.
Keeping Tech In Japan, Mass-Producing Abroad Growing
Stale
TOKYO (Nikkei)--With the global corporate environment rapidly changing, the common practice
among Japanese firms to develop and manufacture high-value-added products at home and churn
out mass-market goods overseas is losing its effectiveness.
Fisa has launched a metal mold maintenance business in Thailand.
Now that international markets are becoming increasingly borderless, manufacturers are finding it
advantageous to focus on price and technology when choosing suppliers, rather than on business
ties or previous contracts.
When Nippon Steel Corp. (5401), Japan's top steelmaker, announced on Feb. 3 it would hold
merger talks with Sumitomo Metal Industries Ltd. (5405), Nippon Steel President Shoji Muneoka
said at a press conference that through the planned unification, "We will not only pursue economy of
scale but also aim to become the world's top steelmaker in terms of comprehensive power, including
technology and product quality."
The two companies look to expand their share in Asian emerging markets, where price battles are
intensifying. Plans include building a blast furnace in India and elsewhere. But armed with their
specialty of high-end steel products, they also have their sights on the world's largest steelmaker,
Arcelor Mittal, and other leading players.
Shuichi Nishimura of Nomura Securities Co. said of this dual approach: "Japan's material producers
need to generate profit from commodity-grade products in order to continue R&D activity on cuttingedge products. So they have to keep working in both high- and low-end areas."
Meanwhile, cross-border movements of technology are picking up pace.
Toray Industries Inc. (3402), a major synthetic fiber maker, began last spring mass-producing a new
type of polyester fiber at its plant in Mishima, Shizuoka Prefecture. The fiber was developed by
Toray's Chinese affiliate, Toray Fibers & Textiles Research Laboratories (China) Co., in Nantong.
"China's product-development capability is rapidly improving," a Toray official said.
In Fukushima Prefecture, major U.S. semiconductor company Texas Instruments Inc. has acquired a
chip-making plant of U.S. firm Spansion Inc.'s Japanese subsidiary, which went bust two years ago,
intending to start producing high-performance analog semiconductors there. Explaining the reason
for the step, an official of TI's Japanese unit said, "We highly value the plant's production setup,
which allows a stable supply of high-quality products."
Finding a balance
Moves by manufacturers to study whether production or R&D activity should be carried out at home
or abroad are not confined to globally active companies. Fisa Corp., a maker of special nozzles and
related products in Tokyo's Ota Ward, manufactures metal molds used in making home electric
appliances and cars at an affiliated plant in China and exports them to Thailand tariff-free. This is
how the firm entered the metal mold maintenance business in Thailand.
However, the company sticks to domestic production for valve gate pins, a key nozzle part,
developing pins tailored to the needs of each market, whether it be Japan, China or another country.
"Because we're a small company, we have to hone our technology while finding ways to take
advantage of the Asian economic bloc, excluding Japan, which is steadily being liberalized," said
Fisa President Susumu Saito.
Hollowing out?
Japan is said to be threatened by a hollowing out of the manufacturing sector. But South Korea,
which logged a record trade surplus in 2010, had its biggest-ever trade deficit with Japan last year,
at about 36 billion dollars. That is because South Korean manufacturers need to import materials
and parts from Japan to boost their exports of flat-panel TVs and semiconductor products.
An official at the Japan External Trade Organization said the inconsistency in South Korea's trade
performance can be partly attributed to the procurement behavior of Samsung Electronics Co. and
other manufacturers from that country, saying that in choosing suppliers, they focus on finding a
balance between quality and price, rather than on nationality.
(The Nikkei March 3 morning edition)
Hitachi, Toshiba Set To Bag Tepco's Huge Nuclear Plant
Order
TOKYO (Nikkei)--Hitachi Ltd. (6501) and Toshiba Corp. (6502) are expected to win a 200 billion yen
order to build key infrastructure for a Tokyo Electric Power Co. (9501) nuclear plant that is to be
Japan's largest.
Construction of the plant in Higashidori village, Aomori Prefecture, began Tuesday, with the
electricity utility, known as Tepco, aiming to bring it onstream in March 2017. Hitachi will be
responsible for the reactor, while Toshiba will handle the steam turbine and generator. The
advanced boiling-water reactor plant will generate 1.385 million kilowatts.
Hitachi's nuclear subsidiary, Hitachi-GE Nuclear Energy Ltd., and Toshiba have formed a consortium
and signed an engineering agreement with Tepco. Design work is already under way. Tepco is
expected to officially order the reactor, steam turbine and power generator as soon as the spring.
The duo aim to use the Higashidori No. 1 unit to win orders overseas for advanced boiling-water
reactor plants.
There are two types of light-water reactors: boiling-water reactors produced by Hitachi and Toshiba,
based on General Electric Co. technology; and pressurized-water reactors, made by Mitsubishi
Heavy Industries Ltd. (7011), based on Westinghouse Electric Co. technology. Boasting improved
power-generating efficiency, advanced boiling-water reactors are considered cutting-edge forms of
boiling-water reactors.
(The Nikkei Jan. 27 morning edition
Toshiba to develop reactor with China
Toshiba Corp. unit Westinghouse Electric Co. of the U.S. will work with China's State Nuclear Power
Technology Corp. (SNPTC) to develop a large nuclear reactor.
Westinghouse will join the SNPTC-led project to develop the CAP1400, a 1.4-million-kw-class pressurized
water reactor that will be powerful enough to meet the energy needs of about 500,000 typical Japanese
households.
Westinghouse has already provided SNPTC with technology for the AP1000, a 1-million-kw, midsize
PWR. With this new project, Toshiba aims to add large PWRs to its product lineup. It also hopes to
acquire expertise in the development of large, high-performance reactors while holding down
development costs, which have been estimated at a minimum of 50 billion yen.
SNPTC has already started designing the CAP1400 and plans to make the reactors operational by
around 2017. By joining hands with Westinghouse, the state-run nuclear power company will be able to
speed up development.
For its part, Westinghouse will consider selling the CAP1400 to other countries in a bid to catch up with
rivals Mitsubishi Heavy Industries Ltd. and France's Areva in the market for large PWRs.
Toshiba already has a track record in 1.4-million-kw-class, large boiling water reactors. But PWRs
account for 70% of the nuclear reactors operating around the world today, and 90% of new reactor orders
are said to be for PWRs.
Infrastructure Firms Hunt Abroad
TOKYO (Nikkei)--With the growth outlook for the domestic infrastructure market growing bleaker
amid the aging and shrinking of the population, Japanese players are looking overseas for new
opportunities.
Click to enlarge
These companies boast world-class technology and expertise in such areas as nuclear power
generation, railways and water processing, and are ready to flex their competitive muscles to score
contracts in emerging countries and other growing markets.
Nuclear hopes
Many analysts say the area to watch is nuclear power generation, which has been given high priority
in the government's drive to promote Japanese exports of infrastructure technology.
Three leading players in this sector are Toshiba Corp. (6502), Hitachi Ltd. (6501) and Mitsubishi
Heavy Industries Ltd. (7011). Toshiba, which acquired Westinghouse Electric Co. of the U.S., has
competitive technology for both pressurized water reactors and boiling water reactors.
Hitachi, which has integrated its nuclear power operations with those of General Electric Co., has
opened marketing offices in five cities around the world, including Vienna, to achieve its target of
winning contracts to build 38 or more new reactors by 2030.
Mitsubishi Heavy is working to build its overseas presence while considering investing in French
nuclear giant Areva SA.
(The Nikkei Veritas Nov. 28 edition)
Firms poised to profit from nuke revival
Carbon emission concerns trump dangers as nuclear power emerges from long dry spell
SOTARO SUZUKI
Staff writer
Nuclear power is back in vogue around the world,
cheered as a carbon-free energy source. With nuclear
plant construction expected to surge, Japanese industry
players are gearing up for action.
Japanese and French nuclear power plant builders are
in a particularly good position to take advantage of the
revival. This is partly because they stayed active during
the past nearly three decades of industry sluggishness,
even as many firms from other countries threw in the
towel.
The resurgence of interest in nuclear power is partly due Demand for nuclear power is expected to rise in Asian
countries. (Photo courtesy Westinghouse Electric Co.)
to concerns over global warming. Currently, thermal
power plants that burn fossil fuels account for 67% of the electricity produced worldwide. These facilities
emit massive amounts of carbon dioxide, a global warming-causing gas.
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As demand for nuke
power swells, companies
line up to reap bounty
Package approaches
bring bidding victories to
South Korea, Russia
Government support
prerequisite for winning
overseas contracts
In contrast, nuclear plants, which use heat generated by nuclear fission to
produce electricity, do not emit CO2. As countries look to tackle emissions,
nuclear power and renewables like solar and wind power are attracting
heavy attention.
U.S. President Barack Obama was originally cautious
about nuclear power. But in February, Obama
announced that the amount of federal loan guarantees
for nuclear plant construction would be sharply
increased. There are now nearly 30 new reactors on tap
in the U.S., more than any other country is planning.
Emerging nations are also keen to build nuclear plants. For instance,
Chinese nuclear power capacity will surge 21-fold from the current 9
gigawatts up to 189Gw in 2025, according to an estimate by the World Nuclear Association.
Indian capacity will likely expand 12-fold to 48Gw over the same period, while the Middle East and
Southeast Asia - two regions with no reactors at present - are pegged at 30Gw and 22Gw, respectively.
There are three Japanese majors that design and construct nuclear equipment and plants: Mitsubishi
Heavy Industries Ltd., Hitachi Ltd. and Toshiba Corp.
A host of other firms have supporting roles, such as supplying materials and components, doing
construction work and inspecting plants.
These major and supporting Japanese nuclear players boast top-notch technologies, as they continued to
develop their craft despite the industry's tough times over the past three decades or so.
Take, for instance, Kobe Steel Ltd., which offers a wide range of products and services for back-end
nuclear operations, notably waste management.
The steelmaker is one of the world's leading suppliers of casks, the containers used to transport and store
spent nuclear fuel. It has built up a solid reputation among its clients, mostly electric power utilities, for its
efficient integrated operations to supply quality casks. Its success is partly thanks to its prowess at
developing input materials.
As nuclear power grows in popularity, more spent fuel and other radioactive waste from power and
reprocessing plants will have to be dealt with, providing Kobe Steel expanded opportunities to sell its
casks.
The company places great strategic importance on its nuclear operations. In addition to casks, it has
experience building radioactive waste disposal facilities.
Cast and wrought
Among Japanese suppliers of materials for nuclear power equipment, Japan Steel Works Ltd. is by far
the most internationally competitive. The company controls 80% of the global market for big cast and
wrought products used to make pressure vessels and steam generators for reactors.
Cast and wrought pieces used in nuclear equipment must be as large as possible, so as to limit welded
areas. The more welding, the greater the risk of radiation leakage.
Japan Steel Works' dominance lies in its proprietary technology to ensure uniform quality throughout the
bodies of massive cast and wrought pieces.
The company supplies not only Japan's three nuclear majors, but also foreign players, including Areva of
France.
Japan Steel Works is so dominant in its field that the number of reactors built around the world is largely
determined by the firm's production capacity, according to one senior industry executive. The firm
currently has an order backlog of 85 billion yen ($904 million).
Ebara Corp. is a major supplier of reactor feed pumps and circulating water pumps. This fiscal year, the
firm will start making feed pumps in China through its subsidiary in Shandong Province. Ebara has
already won orders to supply two nuclear plants in that country; it hopes this work will lead to more supply
deals, as well as to maintenance contracts.
Teikoku Electric Mfg. Co. controls 40% of the global market for canned motor pumps, devices that
function without leaking.
In 2003, the company acquired the canned motor pump business of Crane Co. of the U.S., a firm that had
supplied such products to nuclear plants in that country. The acquisition has put Teikoku Electric in prime
position to cash in on the construction of new plants in the U.S.
At Okano Valve Mfg. Co., more than 60% of overall sales are related to nuclear power. The company is
the first Japanese valve maker approved by China's National Nuclear Safety Administration to make and
supply valves for nuclear plants in that country. To ensure quality, the firm plans to export from Japan to
China.
Mitsubishi Heavy Industries Ltd. will soon begin testing the world's first solar thermal system that
produces electricity without using water.
The project, a joint effort between Mitsubishi Heavy and an Australian government research institute, will
spend about 3 billion yen ($35.29 million) to build a commercial solar thermal power plant that can
generate up to 10 megawatt-hours of electricity using compressed hot air instead of steam to drive a
turbine. It could be completed by 2015.
The technology's main advantage is that it can be used in arid places, which are some of the sunniest
spots on the planet. The technology uses 800 C (1,472 F) air instead of vapor to drive a turbine that
generates electricity. Mitsubishi Heavy also expects power generation costs for the waterless solar
thermal plant to be about 30% less than conventional solar thermal plants, which require pumps and
piping for the water.
Researchers' Expectations Run High For Green Energy Tech
TOKYO (Nikkei)--Japan's corporate researchers believe the prospects are brightest for companies
whose strengths lie in alternative energy and green technologies, according to a Nikkei Veritas
survey.
The poll asked researchers to name technologies they see as promising in the coming few years
and then select companies associated with such capabilities. Technology related to "next-generation
energy" ranked No. 1, followed by "environment preservation" and "eco-cars."
Among next-generation energy businesses, expectations for solar power generation were
particularly high, and many chose Sharp Corp. (6753) as the leading maker in this area. A
researcher in his 50s explained his reason for selecting the company, citing an expected "expansion
in global demand for its solar panels."
Sharp is building what will be Japan's largest solar cell plant in Sakai, Osaka Prefecture, with an
annual output capacity of 480,000kw, aiming to bring it onstream in spring 2010. And this month, the
company is rolling out a solar power generation system that can produce electricity efficiently even if
it is installed on steep roofs. It also unveiled a plan for comprehensive operations in the U.S.,
ranging from production of raw materials to that of power generation systems.
These solar power generation facilities supplied electricity for last year's G-8 summit meetings at Toyako, Hokkaido.
Kyocera Corp. (6971) and Panasonic Corp. (6752) were also selected for their solar technologies. In
a bid to boost sales in the U.S., Kyocera this month plans to raise its annual production capacity at a
factory in Mexico by a factor of seven to 240,000kw. Meanwhile, one respondent in his 30s who
named Panasonic said, "Thanks to the acquisition of Sanyo Electric Co. (6764), the group will be
able to speed up the development of next-generation energy and catch up with European rivals by
tapping its solar power generation technology."
Daido Steel Co. (5471), known as an automotive parts supplier, was cited for its solar power-related
capability as well. The firm handles a concentrating solar power system that tracks the movement of
the sun and shifts its panels accordingly. As such, "the model has much higher energy conversion
efficiency than other systems," a respondent pointed out.
Rising stars
Torishima Pump Mfg. Co. (6363), which commands the world's top market share in seawater
desalination, was named for its environment conservation technology. And Oncotherapy Science
Inc. (4564) was selected in the bio and medical field for developing a peptide vaccine for cancer
treatment using a protein specific to cancer cells. The bioventure listed on the Tokyo Stock
Exchange's Mothers market has recently begun clinical trials for a pancreatic cancer vaccine in
Europe.
Takara Bio Inc. (4974) and Kyowa Hakko Kirin Co. (4151) were seen by many researchers for
technologies related to genetic therapy and immunotherapy, respectively.
Expectations for Shionogi & Co. (4507) are also mounting. A clinical study for S-222611, an inhibitor
of protein in cancer cells, is now under way in Europe. The drugmaker is also accelerating the
development of new treatments for lung and breast cancers, and it was evaluated highly for
bolstering R&D for the treatment of obesity as well.
Hosokawa Micron Corp. (6277) is drawing considerable attention too, as the company "has the
technology to enable fine grinding of raw materials used in medicines," one respondent noted.
Meanwhile, Toyota Motor Corp. (7203) and Honda Motor Co. (7267) continue to remain popular
among corporate researchers for anticipated price reductions on hybrids and marked improvements
in their performances in the future.
The online survey was conducted March 10-12 by The Nikkei in cooperation with NTT Resonant
Inc.-operated portal site "goo," targeting 1,000 corporate researchers aged 20-69 nationwide.
Participants consisted of 865 men and 135 women.
(The Nikkei Veritas April 12 edition)
A number of analysts sought to draw lessons from the 1995 earthquake that
devastated the city of Kobe. That quake killed some 6,000 people and caused some
10 trillion yen, or $120 billion in today's exchange rates, in damage. That was
equal to 2.5% of Japan's GDP, but it devastated a major port and a larger chunk of
Japan's output than Friday's disaster.
The two regions hardest hit in the Kobe quake accounted for 12.4% of GDP,
according to data from Bank of America Merrill Lynch, while the five prefectures
hardest hit Friday account for a combined 7.8% of Japan's GDP.
If Friday's quake and tsunami have a similar impact on the affected areas, analysts
from the bank wrote in a report, it would shave 0.2-0.3 percentage point off Japan's
growth, "although the actual impact could be larger depending upon the damage in
other areas, the extent of the infrastructure destruction and the additional damage
of tsunami."
But, as with the Kobe quake, "there remains a relatively large spare capacity to
offset the production loss in Japan now," the analysts said. "In addition, the cost
[demand] for the rebuilding of ruined capital could be 1.0% of GDP or larger,
although it is very difficult to estimate its size at this point."
http://www.marketwatch.com/story/earthquake-to-hit-gdp-in-short-term-2011-03-13
OECD 15 March
The 11 March 2011 Tohoku Pacific earthquake was the strongest ever
recorded in Japan and triggered the country’s worst disaster of the post-war
era. We express our deep regret at the loss of life and offer our condolences
to those affected by this tragedy.
The four prefectures most affected by the earthquake (Iwate, Miyagi,
Fukushima and Ibaraki) account for 6 to 7% of Japan’s population and
economic output. The destruction caused by the earthquake and the
subsequent tsunami is so large that it is not possible at this point to
estimate its economic impact. Such disasters reduce potential growth
through damage to tangible fixed assets and injury and loss of life. The 1995
Kobe earthquake, for example, resulted in damage estimated at around 2%
of GDP. The area hit by the Kobe earthquake, as a share of GDP, was
roughly comparable to the area devastated by the Tohoku Pacific
earthquake. Nevertheless, the impact of the 11 March disaster may be much
worse, given the greater severity of the earthquake and the subsequent
tsunami. Moreover, a series of aftershocks continues to shake Japan.
In particular, the earthquake and tsunami seriously damaged nuclear power
plants in the Tohoku region, which depends heavily on such plants for
electricity. Measures to contain overheating at some reactors may render
them unusable. An estimated one-fifth of Japan’s domestic nuclear capacity
has been closed at least temporarily since the earthquake, resulting in
electricity shortages. The authorities plan rolling blackouts in the eastern
half of Honshu for at least several weeks beginning 14 March.
Power shortages and the need to repair the damage caused by the
earthquake and tsunami has forced many factories to suspend production,
including in the car and electric equipment sectors. The adverse effects in
areas hit by the disaster may spread to other areas of the country and
overseas due to shortages of parts. Consequently, industrial production in
March is likely to fall, followed by further weakness in April.
The Tohoku Pacific earthquake occurred as the Japanese economy appeared
to be emerging from a lull in the latter part of 2010. While disasters reduce
economic activity in the short run, subsequent reconstruction efforts tend to
boost output growth. The government has started discussions on
reconstruction measures. At present, fiscal resources appear limited to the
remaining 0.2 trillion yen (0.04% of GDP) reserve fund in the FY 2010
budget and the 1.1 trillion yen (0.2%) reserve in the FY 2011 budget.
However, supplementary budgets to finance reconstruction efforts will
expand available fiscal resources. In the wake of the Kobe earthquake, for
example, the central government spent about 5 trillion yen (1.0% of 1995
GDP).
At its 14 March meeting, the Bank of Japan’s Monetary Policy Board decided
to double the size of the asset purchase programme, originally introduced in
October 2010, from 5 trillion yen to 10 trillion yen (2% of GDP), while
providing ample liquidity. The central bank is also monitoring the impact of
the earthquake on financial markets and financial institutions. Equity prices
have fallen sharply since 11 March, with the benchmark Nikkei average
down by 16%. Sales by foreigners may have helped reverse initial upward
pressure on the yen, perhaps reflecting the repatriation of overseas assets
by Japanese insurers.
The OECD will be working closely with the Japanese authorities in the
coming months and is ready to assist them in any way we can at this
difficult time, including by helping them assess the impact of the tragedy on
the economy and determine the necessary policy responses.
Last Update: Paris, 15 March 2011
As it stands, we in the U.S. produces some 20% of our power from nuclear
sources. Worldwide, nuclear power accounts for about 14% of total energy, and 31
countries operate nuclear power plants. The biggest nuclear consumer is France,
which uses nuclear energy as its primary power source, the only nation in the
world to do so. It derives more than 75% of its electricity from nuclear energy.
The next five biggest users of nuclear power are Slovakia, at 53.5%; Belgium, at
51.7%; Ukraine, at 48.6%; Armenia, at 45%; and Hungary, at 43%. In all, 20
countries obtain more than 20% of their electricity from nuclear power plants.
One factor in the nuclear power percentage decrease since 2007 has been the prolonged shutdown of
large reactors at the Kashiwazaki-Kariwa Nuclear Power Plant in Japan following the Niigata-Chuetsu-Oki
earthquake.
ANALYSIS: Rebuilding Energy Policy After Fukushima
TOKYO (Nikkei)--Nuclear power plant construction and expansions will inevitably falter following the
events at the Fukushima Daiichi complex. But this country depends on nuclear power for about onefourth of its electricity, and a stable energy supply is essential for recovering from the disaster and
rebuilding Japanese industry.
Japan needs to examine the Fukushima experience and put it to work to ensure the safety of
existing nuclear plants while finding a way to bring more certainty to the energy supply.
A desperate effort is still under way at Fukushima Daiichi to forestall the nightmare scenario of a
large-scale release of radioactive material, and the situation remains touch and go.
The plant will require decontamination and at least several years to restart operations. We must
assume that some of the reactors, probably Nos. 1, 2 and 3, are destined for the scrapheap.
The loss of this plant, which accounts for about 7% of Tokyo Electric Power Co.'s (9501) generating
capacity, creates a hole that, unless filled quickly, will make chronic the strain in Tepco's energy
supply and pose a major obstacle to the industrial activity that is key to recovery.
Since before the earthquake, Japan has been working to do more with solar, wind and other
renewable energy sources in the long term. But this alone will hardly get the job done in time. In the
meantime, there is high hope for fossil-fuel power plants, which can be built large and relatively fast.
At the same time, the country needs to make sure the nuclear power plants in operation now stay
that way, and do so safely. The government is likely to raise safety standards for existing plants. The
industry has taken steps to protect reactors against seismic waves, but there was clearly a blind spot
in its precautions against tsunamis.
Chubu Electric Power Co. (9502), whose Hamaoka nuclear power plant in Shizuoka Prefecture lies
in the predicted range of the next Tokai earthquake, has put forward a plan to build a more than 12
meter seawall at the facility and shield pumps and other vital equipment from water damage. The
industry needs to move quickly on tsunami defenses like these, as well as on other precautions,
notably multilayered safeguards to keep reactors cool in emergencies.
There is already talk in favor of reconsidering nuclear power plants on the drawing board in Fukui
and Yamaguchi prefectures. Nationally, government plans call for building nine reactors by
2020 and another five by 2030. But officials are already leaning toward the opinion that new
construction will have to be put on hold in light of public sentiment. Moving ahead with
nuclear projects will require safety regulations that can pass muster with ordinary Japanese.
Back in 2007, Tepco's Kashiwazaki-Kariwa nuclear power plant in Niigata Prefecture was brought to
a standstill by an earthquake, but the shutdown happened safely and the plant eventually restarted.
Had Fukushima Daiichi pulled off the same performance, it would have no doubt spawned another
myth about the sturdiness of Japanese nuclear power plants. The reality is exactly the opposite.
As a land of earthquakes, Japan should consider itself fortunate to have somehow avoided a major
nuclear accident until Fukushima and draw on this experience to take sound precautions.
---Translated from an article by senior Nikkei staff writer Kazuki Yoshikawa
(The Nikkei March 19 morning edition)
The government plans to expand such purchases of surplus power around fiscal 2012 to include
electricity from large-scale solar power plants, wind farms, geothermal facilities, small hydropower
stations and biomass power generation sites.
The Ministry of Economy, Trade and Industry reckons that this expansion will more than triple the
aggregate output capacity of renewable-energy power generation systems from 2009 levels to 47-50
million kilowatts within a decade. Dus nu 15 miljoen Kw
Development is putting on hold a plan to build a 42,000kw plant in Yokohama-machi, Aomori
Prefecture, that was originally slated to start operating in March 2013.
As for its plan to build two wind power plants in Hokkaido that use a hybrid system combining a
sodium-sulfur (NaS) battery with wind power generation, the company failed to obtain a subsidy for
the NaS battery portion. Japan Wind Development had been hoping to bring the plants online in four
years, but because the contents of the new government program affect the necessity of NaS battery,
the company "cannot move forward with construction," an official said.
Awkward transition
Renewable Energy Technology Co., which owns three wind power plants jointly with other firms, will
push back the start of construction in Fukaura-machi, Aomori, of a 20,000kw plant to this autumn
from the initially planned April. The firm had trouble raising funds due to the plant's uncertain profit
outlook.
Effectively raising GDP on an average of 2.1% annually from 2003 to 2007. Subsequently, the
global financial crisis and a collapse in domestic demand saw the economy shrink 1.2% in 2008
and 5.0% in 2009.
GDP $5391 billion (2010 est
Government debt 196.4% of GDP (2010
The Postal Savings deposits, which have until now been used to fund public works projects, many of
which have had questionable economic value, stands in excess of $1.9 trillion, and could be a major
force in energizing the private sector
government deficit 2 percent
R&D 3.4 percent GDP
fertility rate 1.3
Almost a quarter > 65 year old, population
A trillion dollars is a big number, so people are likely to think the government should put that money to better use,'' said
Masamichi Adachi, an economist at JPMorgan Securities Japan Co. in Tokyo. ``Unlike in China, the Middle East or Singapore,
Japan's foreign reserves are backed by debt, so the risks involved in a sovereign wealth fund would be much greater.'' reserves
komen van verkopen government bonds (schuld) en aankopen US treasury bonds?
"Japanese Economic News" 29, citing the Bank of Japan statistics released this month, said the
end of September this year, Japanese government bonds held by foreign investors is about 57.5
trillion yen, an increase of 6.2 %, which is the first time since September 2008 an increase
occurred. data show that, as of the end of September, Japan's national debt amounted to 880
trillion yen, of which Japan's banks, insurance companies and pension funds accounted for
66.2% held by the central government and public financial institutions to hold 11.8% 8.9% Bank
of Japan held by Japanese households and non-financial corporate enterprises, collectively hold
6.6% and 6.5% held by foreign investors.
Debt 880 trillion is 10000 billion USD.
International Investment Position of JapanEnd of 2009
(¥ billion)
Assets
1. Direct Investment
2. Portfolio Investment
Assets Total
Liabilities
68,210 1. Direct Investment
18,425
261,989 2. Portfolio Investment
141,896
554,826
288,603
Liabilities Total
Payouts Seen Reaching Y1tln On Earthquake Policies
TOKYO (Nikkei)--The insurance industry expects payouts for earthquake coverage taken out by
individuals to total a record 1 trillion yen, eclipsing the 80 billion yen from the 1995 temblor that
devastated the Kobe area.
The three major casualty insurance groups, including Tokio Marine Holdings Inc. (8766), will make
payments on an estimated several hundred thousand policies stemming from the March 11
earthquake and tsunami. With the coverage limit on such policies raised fourfold in 1996, per-policy
payouts are likely to more than double from the 100 million yen-plus for the Great Hanshin
Earthquake.
U.S. catastrophe risk-modeling consultant Eqecat Inc. estimates total payouts at 640 billion yen to
1.2 trillion yen, while Goldman Sachs Japan Co. projects payments topping out at 861 billion yen.
These figures are roughly in line with the industry forecasts.
The insurers are responsible for the first 115 billion yen in payouts, with the government shouldering
half of any additional amount. So if combined payments come to 1 trillion yen, the insurance industry
will be on the hook for 500-600 billion yen.
In addition to the government's roughly 1.3 trillion yen in a special account for earthquake
reinsurance, the insurers have built up reserves of roughly 1 trillion yen through the Japan
Earthquake Reinsurance Co. No additional funding will be necessary as long as total payments do
not exceed these balances.
Speculation that the insurers would sell foreign assets to secure yen for payouts sparked a sharp
appreciation of the Japanese currency. But Hisahito Suzuki, chairman of the General Insurance
Association of Japan, says there is no need to do so, pointing out that insurers "hold plenty of liquid
assets."
In the longer run, however, the enormous payouts will pressure insurers' earnings as they rebuild
their reserves for earthquake coverage.
(The Nikkei March 21 edition)
UK JOURNALIST SYMPOSIUM
Japan's renewable energy drive runs out of steam
By TAKASHI KITAZUME
Staff writer
Japan could be left behind in renewable energy innovation unless it creates a large domestic market in this field, Ashley Seager,
economics correspondent for The Guardian newspaper, warned in the May
23 symposium.
While nuclear power has been touted here as a clean source of energy in
terms of carbon dioxide emissions and subsidized for many years, Japan
"does not seem to want to give any boost — at least in the short term — to
renewable energy," he said.
A decade ago, Seager said, many people expected Japan to dominate every
aspect of renewable energy technologies such as solar panels and windpower generation.
Today, Japan's use of renewable energy remains extremely low,
accounting for a mere 1.3 percent of its total energy production, he
said. Tokyo plans to increase that ratio to 1.6 percent by 2014 — a goal
surprisingly unambitious for a country so heavily dependent on oil
imports and so technologically advanced, he added.
Britain is also lagging behind other European countries, he noted. It
produces only 2 percent of its energy from renewable sources, and a plan
being debated to increase the figure to 5 percent by 2020 pales in
comparison with the situation in countries such as Germany, which
generates 8.5 percent of its energy from renewables and aims to boost
that figure to more than 20 percent by 2020, he said.
Ashley Seager
Japan, home to the 1997 Kyoto Protocol against global warming, is
struggling to meet the treaty obligation to cut its greenhouse gas emissions 6 percent from the 1990 level during the 2008-2012
period.
The United States, the world's largest emitter, has pulled out of the Kyoto Protocol. But even the U.S. caught up with Japan in the
use of solar photovoltaics (PVs) last year and is set to surpass Japan this year, Seager pointed out.
And as for wind-power generation, the U.S. last year fitted wind turbines with a total capacity of 5.2 gigawatts — 38 times as
much as Japan did, he said.
What does the situation mean for Japanese makers of solar panels and wind turbines? "Ten years ago, Sharp was easily the
world's biggest maker of PVs and Mitsubishi Heavy Industries was the world's biggest wind turbine maker," he said.
Today, the world leader in solar-cell production is Germany's Q-Cells, which was established as recently as 1999, and
Sharp was been pushed to second place, Seager noted. Japan has slipped to 14th place in the world ranking on wind-
power installations, and Japanese firms like Mitsubishi Heavy still make wind turbines but 80 percent of their production
is made outside of Japan, he added.
Innovation in renewable energies is not just about technology or products but also about policies to promote their use, he said.
Countries where the use of renewable energy has increased have adopted a mechanism called feed-in tariff, which guarantees an
above-market price for a certain period of time and gives businesses the certainty to plan for a certain volume of production,
Seager said.
Japan has adopted a system much like that of Britain called renewable portfolio standard (RPS), obliging power
companies to buy a certain amount of renewable energy. The system "has not worked in Britain and is not working
here," he said.
"Today, there are feed-in tariffs across most of Europe, and that's where the action is . . . Spending on research and development
on renewables has surged in countries that have feed-in tariff, with costs falling as a result," he said.
"Does it matter for Japanese firms? As long as you're making the goods and selling them (overseas), then perhaps it
doesn't," Seager said. "(But) innovation must definitely be suffering from the lack of a big domestic market. Without a
big domestic market, the future Google of renewable energy is unlikely to come from Japan."
The Japan Times: Thursday, June 5, 2008
With 53 active nuclear power generating reactor units in 2009, Japan ranked third in the world in that respect, after the United
States (104 reactors) and France (59).[4] Almost one quarter (24.93%) of its electricity production was from nuclear plants,
compared to 76.18% for France and 19.66% for the United States.[5]