Catastrophe in Japan means construction boom

By Masumi Suga, Naoko Fujimura

Japanese contractors have rushed workers, generators and equipment to areas devastated by the March 11 earthquake and tsunami which damaged or destroyed more than 110,000 buildings and may have killed 20,000 people.

A spokesman for Osaka-based Nishio Rent All Co, Takashi Yamada, said the company had had many, many requests for floodlights, power equipment and construction gear.

"We're just sorry we don't have enough stock for everyone."

The Government has asked companies such as Daiwa House Industry Co to supply more than 30,000 temporary houses within two months to help shelter the 350,000 people in evacuation centres. Prime Minister Naoto Kan has also pledged to rebuild from scratch.

The magnitude-9 quake and tsunami damaged about 1500 roads, 48 bridges and 15 railways, according to the National Police Agency.

"The scale of the rebuilding will be huge," said Kazuo Susa of Fukuda Corp (1899), a general contractor in Niigata prefecture, northwest Japan.

Fukuda started inspecting buildings the day after the quake and it began repairs to facilities including shopping centres the following day to help customers resume operations, Susa said.

The company is now reinstalling fallen ceilings and working on other repairs in buildings that avoided the worst of the damage as it awaits the start of full-fledged reconstruction.

Speculation that Fukuda will win rebuilding contracts has caused it to jump 92 per cent on the Tokyo stock exchange since March 10, the last day of trading before the quake. That is the third-best performance among the 1666 companies on the index, which has dropped 8.1 per cent.

Nissei Build Kogyo Co, a maker of prefabricated houses, leads gains, having more than tripled since March 10. Osaka-based builder Fudo Tetra Corp has more than doubled.

Construction-related companies account for 39 of the 40 best-performing Topix stocks in the period.

Reconstruction and relief efforts in the disaster area have been hampered by snow, damaged roads and fuel shortages. The devastation also covered a greater area than the 1995 Kobe quake and included many smaller towns with few transport links.

"The damaged area is very wide, and it will be an all-out battle," said Nobuyuki Ogawa, a spokesman for Tokyo-based Toa Corp, which specialises in building harbour facilities. "The coastline is all destroyed."

Toa has set up a taskforce to work on temporary repairs so ports can handle relief shipments, and it is also sending in supplies of food and blankets for employees and others.

The Government said last week that 11 harbours were damaged in the tsunami, all of which were expected to be at least partially open for emergency supplies by tomorrow.

Companies such as Toa and Toyo Construction Co. are repairing broken quay walls and removing debris clogging waterways.

It took a year to rebuild major infrastructure after the Kobe quake and the bulk of the repairs after this disaster might take as long, said David Edgington, an associate professor at the University of British Columbia.

- BLOOMBERG

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