Japanese cement producers Taiheiyo Cement Corp and Sumitomo Osaka Cement Co are both on track to beat their consolidated operating profit projections for the year ending March 31, buttressed by better-than-expected demand in the domestic market.
Taiheiyo Cement’s operating profit is likely to triple on the year to around JPY11bn, which would surpass a JPY10.5bn forecast. Sumitomo Osaka’s is expected to jump 90% on the year to nearly JPY6bn, besting its JPY5.5bn prediction.
Sales at Taiheiyo Cement are expected to dip 4% to around JPY700bn, while Sumitomo Osaka’s will likely rise 2% to around JPY200bn. Cement sales for public works projects in regional areas have been relatively strong, and recovering housing starts have been a boon.
The cement companies’ restructuring efforts have also paid off. Taiheiyo Cement halted operations at three domestic plants, offering early retirement to more than 420 employees. Sumitomo Osaka, meanwhile, scaled back its production facilities.
Taiheiyo Cement’s net profit is seen reaching JPY4bn, improving from a JPY37bn net loss in fiscal 2009. Sumitomo Osaka is projected to earn a JPY300m net profit, compared with the previous year’s JPY849m red ink.