Power Cutbacks Fuel Heatstroke & Economic Foes

Faced with power cutbacks and worried that
the shortages could get worse, many Japanese companies that are big consumers
of energy are moving their operations overseas. The March 11 earthquake and
tsunami, which devastated large parts of north-eastern Japan and severely
disrupted the industrial supply chain, have taught companies that it is unwise
to focus all their output in one area. Heatstroke cases in Japan have shot up in the
early summer as many air-conditioners have been switched off amid an energy
saving campaign following the Fukushima nuclear disaster.

Kwan Weng Kin in The Straits Times (15 July
20110:

Energy cutbacks following nuke crisis add to
woes like strong yen, high taxes

Faced with power cutbacks and worried that
the shortages could get worse, many Japanese companies that are big consumers
of energy are moving their operations overseas.

This latest push factor comes on top of
existing deterrents to domestic production such as the strong yen, high
corporate taxes and slow trade liberalisation.

The March 11 earthquake and tsunami, which
devastated large parts of north-eastern Japan and severely disrupted the
industrial supply chain, have taught companies that it is unwise to focus all
their output in one area.

At the urging of customers to spread its
bets, Renesas Electronics, a leading maker of microcomputers used in cars,
plans to outsource up to 25 per cent of its production to companies in Taiwan
and Singapore.

Electronic firms, which depend on a large and
stable supply of electricity, are especially concerned about the shortage of
power resulting from damage to nuclear reactors. Nuclear energy made up 30 per
cent of Japan’s electricity needs before March 11.

Mitsui Mining and Smelting, which has a 90
per cent share of the global market for ultrathin copper coil used in
smartphone circuits, is opening a factory next year in Malaysia to supplement its
only plant north of Tokyo.

Nidec, the world’s leading maker of miniature
motors for hard disk drives, is planning to move a key motor-testing facility
overseas.

Referring to the prospect of moving abroad,
Nidec president Shigenobu Nagamori told a press conference last month: ‘I can
see it coming.’

Utility companies say they have enough
capacity from thermal plants to meet peak demand this summer, provided users
shave about 15 per cent off last year’s peak usage levels.

But there is no telling when the power shortage
will end.

The government’s latest insistence on using
‘stress tests’ to assess the safety of all nuclear reactors only clouds the
picture further, raising concerns that no reactor may be allowed to be restarted
unless it passes the tests.

Japanese business leaders have vowed to
remain in Japan to rebuild their country.

Toyota Motors president Akio Toyoda said his
company “is committed to manufacturing in Japan”.

But with his company reeling from the impact
of the strong yen, which rose as high as 78 yen to the US dollar this week, and
now faced with the additional problem of power shortages, Mr Toyoda’s commitment
appears to be wavering.

Hinting that the company might be forced to
move some production overseas, he told reporters recently: “We want a
stable supply of electricity. I feel manufacturing in Japan may have already
exceeded the limit.”

The government is aware that the hollowing
out of Japanese industry will slow economic growth, including the
reconstruction of the country’s quake-ravaged north-east.

The ministry of economy, trade and industry
is putting together measures to persuade Japanese companies to remain at home.
These include subsidies to companies that build backup plants in Japan, and
cheaper power rates.

Nearly 70 per cent of companies surveyed by
the ministry said they plan to accelerate the movement of their supply chain
overseas.

In a White Paper released last week, the
ministry stressed the need for Japan to boost its competitiveness.

It said the country must seek to forge more
trade liberalisation deals, including joining the Trans-Pacific Partnership
multilateral free trade agreement (FTA), so as to increase the attractiveness
of manufacturing in Japan.

Many Japanese companies are prompted to
locate production plants abroad to get around import tariffs. Such tariffs
would be removed in countries that establish FTAs with Japan.

Many foreign countries see the latest crisis
in Japan as an opportunity to welcome Japanese investments.

Earlier this month, a delegation from China’s
Hebei province conducted investment seminars here for Japanese firms interested
in moving to the mainland.

Seoul is reportedly also keen to see Japanese
companies relocate to South Korea.

In Viet Nam, some industrial parks have
decided to waive rentals for Japanese companies affected by the March 11
disaster. Thirteen Japanese business missions visited one industrial park
outside Ho Chi Minh City last month, three times the usual number.

Source: www.asianewsnet.net

By AFP Staff Writers Tokyo (14 July 2011):

Heatstroke cases in Japan have shot up in the
early summer as many air-conditioners have been switched off amid an energy
saving campaign following the Fukushima nuclear disaster.

More than 13,000 people were rushed to
hospital by ambulance in June and the beginning of July, data from the Fire and
Disaster Management Agency showed. Twenty-six of them died.

The rise for June alone was three-fold from
last year. Of all the heatstroke cases, more than half were over 65 years old.

The sharp rise came amid a sweltering
heatwave, when the average temperatures in late June in eastern and western
Japan hit their highest levels since such data were first kept in 1961, the
agency said.

The mercury in late June topped 35 degrees
Celsius (95 Fahrenheit) in hundreds of spots across Japan, and the average
temperature was about 3.5 degrees Celsius higher than usual, the country’s
meteorological agency said.

The Fire and Disaster Management Agency is
urging people to keep room temperatures no higher than 28 degrees Celsius and
drink plenty of water. It warned that elderly people need to be cautious even
when they stay indoors.

Only 19 of Japan’s 54 nuclear reactors are
operational four months after the March 11 quake and tsunami disaster sparked
the world’s worst nuclear accident since Chernobyl 25 years ago at the
Fukushima Daiichi plant.

The government has asked the nation to save
power, and homes and companies in the northeast are being asked to cut back
usage by 15 percent in the summer, leading many to cut down on power-guzzling
air-conditioners.

Source: www.energy-daily.com