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Japan Nuclear Evacuation May Force Hitachi, Boehringer to Abandon Plants

14 April 2011 03:24 (UTC +04:00)

Baku â€“ APA. Hitachi Chemical Co. and Boehringer Ingelheim GmbH may abandon factories largely unscathed by last monthâ€™s Japan earthquake and tsunami as engineers struggle to contain radiation spewing from a crippled nuclear plant, APA reports quoting â€œBloombergâ€.
Boehringer, the worldâ€™s largest family-owned drugmaker, halted production at a factory that makes energy drinks in Namie, about 10 kilometers (6.2 miles) from the leaking power station following the March 11 temblor and tsunami. Hitachi Chemical shuttered a plant making carbon brushes for train motors in the same town, causing a parts shortage that disrupted rail services.
â€œWe have no idea when we will be able to go back,â€ said Masayuki Hasegawa, a spokesman for the Tokyo-based Hitachi Ltd. (6501) unit. The company hasnâ€™t yet decided on the long-term future for the plant, which employed 200 people and had annual sales of about 5 billion yen ($60 million), he said.
Workers and homeowners are unable to go within 20 kilometers of the tsunami-hit Fukushima Dai-Ichi plant, as the government has imposed an exclusion zone following the worldâ€™s most serious nuclear accident since the 1986 Chernobyl disaster. It may be years before radiation levels are low enough for people to return to some areas, said Hideyuki Ban, secretary general of the Citizensâ€™ Nuclear Information Center, a Tokyo- based anti-nuclear group.
â€œManufacturers are going to have to start production at other places,â€ said Mitsushige Akino, who oversees about $600 million in assets in Tokyo at Ichiyoshi Investment Management Co. â€œCompanies will have some stock on hand but suppliers are going to start losing business if they donâ€™t restart production.â€
Auto-Parts Makers
Tomiyama Pure Chemical Industries Ltd. and Japan Brake Industrial Co. have both shuttered plants in the evacuation zone supplying automakers including Honda Motor Co. and Mazda Motor Corp. The closures have contributed to carmakers being forced to curtail production, according to Citigroup Inc. analysts Noriyuki Matsushima and Manabu Hagiwara.
The shutdowns â€œare having a major impact on auto-part production,â€ the analysts wrote in an April 8 report, as they downgraded to â€œsellâ€ Toyota Motor Corp., Nissan Motor Co., and Honda. â€œEmployees cannot access the plants and there are absolutely no prospects in sight for recovery.â€
The crippled nuclear reactors may eventually leak more radiation than was released at Chernobyl, Tokyo Electric Power Co., the plantâ€™s operator, said on April 12. The amount released so far is about 10 percent of the levels for the 1986 incident, Japanâ€™s nuclear safety agency said the same day. The severity rating for the Fukushima nuclear crisis has been raised to seven, the highest level and the same as for Chernobyl.
The magnitude-9 quake and tsunami left more than 28,000 people dead or missing across the Tohoku region, northeast of Tokyo, according to the National Police Agency of Japan. More than 200,000 buildings were damaged, swept away or destroyed.
Golf-Club Shafts
Fujikura Rubber Ltd. (5121) has offset the shutdown of a plant making golf-club shafts in Odaka by increasing output at a factory in Vietnam, said Hiroshi Miyata, an acting general manager. The Japan plant cost about 600 million yen to build and employs about 160 people, he said.
â€œWe donâ€™t know when weâ€™ll be able to use the factory again,â€ he said. â€œIt was largely undamaged by the earthquake and tsunami.â€
Hitachi Chemical has asked other companies to make the carbon brushes it produced at its Namie plant and is dispatching workers to help them, Hasegawa said. The factory, which opened in 1966, had a Japan market share of about 50 percent, he said.
JR West Services
A lack of carbon brushes, which transfer electricity in train motors, caused West Japan Railway Co. (9021) to cut services following the quake. It resumed a full timetable last week after being assured by Hitachi Chemical and other carbon-product makers that alternative supplies would be available, Takayuki Sasaki, president of the Osaka-based company, said last week.
Boehringer has moved production from its factory in Namie to other parts of Japan and it will also relocate the 40 employees who worked there, said Erika Nakajima, a spokeswoman for its SSP Co. unit.
â€œMany people have mixed feelings,â€ she said. â€œThey are attached to the area, so they wish to go back one day.â€
The company, based in Ingelheim, Germany, hasnâ€™t decided yet whether to permanently shut the factory, she said.
Japan Brake abandoned efforts to repair its plant in Namie last month following the evacuation alert, it said on its website. The company, which supplies brake-disc pads to Honda, Mazda and brake-makers, may turn to rivals to help offset the shutdown, said Yoshihisa Igawa, a spokesman. The plant employed 345 people.
Battery Fluids
Tomiyama, which made electrolytic fluids for lithium-ion batteries at a factory in Okuma, may also ask other companies for help, said Kazuhiro Endo, a spokesman. It hasnâ€™t started considering the long-term future for the plant, he said.
Once the Fukushima nuclear plant has been successfully stabilized and there are no more leaks, authorities will likely begin to narrow down the exclusion zone to particular hot spots, said Ban at CNIC. Still, itâ€™s too early to say where those points will be and even in other parts of the zone it may be years before itâ€™s safe, he said.
â€œRadiation levels in the evacuation zone could remain high for five to 10 years,â€ he said. â€œPeople and companies will have no choice but to move to other areas.â€