KOMATSU RECOVERY AFTER TSUNAMI
Japan's devastating earthquake and tsunami on March 11 this year was an event which had tragic consequences for the Japanese people, with over 15,000 killed and over 125,000 buildings destroyed or damaged, writes Komatsu Managing Director Sean Taylor.
Also severely affected were six of Komatsu's manufacturing and supply operations on Japan's east coast, with production stopping or being severely constrained in the days and weeks following the earthquake.Immediately following the earthquake, Komatsu Group formed an emergency task force headed by Kunio Noji, the company President and CEO.This task force placed its top priority on individual human lives and safety, leading group-wide efforts to confirm the safety of employees and their families in Komatsu Group, including distributors, and suppliers, as well as providing assistance to affected people.
Despite the massive damage caused by the earthquake and tsunami, by the end of March, all our production facilities were back in operation, thanks to unprecedented efforts by Komatsu Group staff throughout Japan.
In addition to the disruptions to our own facilities, port and transport infrastructure was severely damaged, which impacted on our ability to ship products from Japan.
Deliveries of some products to customers in Australia and New Zealand were affected by these events, including some items of large mining equipment but now, six months after the earthquake, our production and distribution chain is completely back to normal.
In addition, Komatsu as a whole is continuing to increase profits, despite the disruption from the earthquake.
In late July, Komatsu Ltd reported an 82% gain in first-quarter profit, aided by rising demand in North America and Southeast Asia.
Net income climbed to 55.7 billion yen ($715 million) in the three months ended March 31, from 30.7 billion yen a year earlier. Full year profit will rise 33% to 200 billion yen in the year ending March 31, 2011.
In Japan, Komatsu Group has been a significant contributor to relief and recovery efforts, with donations of cash, housing and shelter, equipment and scholarships totalling one billion Japanese yen ($A11.843 million).
This included scholarships to students of national technical colleges located in the devastated areas of Tohoku and northern Kanto regions, designed to support those students who are expected to work for Japan's manufacturing industries in the future.
Separately, Komatsu Ltd and Rio Tinto have agreed to fund a 10-year 400 million yen scholarship for undergraduate and graduate students enrolled in Tohoku University, which was severely affected by the disaster.
As the recovery and rebuilding efforts have continued, there has been a significant increase in demand for construction equipment with orders for Japanese construction equipment up 30% for the second quarter of 2011 compared with the same period a year earlier.
This is particularly spurring demand for excavators and wheel loaders.
The earthquake/tsunami is reckoned to be the most expensive natural disaster on record. While early figures estimated insured losses from the earthquake alone at $14 billion to $35 billion, the final overall cost could exceed $300 billion a truly staggering amount.