Japan producers to reduce domestic output 20-30%

Japan producers to reduce domestic output 20-30%
Published: 19 February 2010

Japanese producers are moving to reduce excess production capacity in Japan, with industry leader Taiheiyo Cement Corp and No. 4 firm Ube Industries Ltd planning cuts of 30% and 20%, respectively, The Nikkei reported on Thursday.

The Taiheiyo Cement group currently has the capability to produce 25Mta of cement at home. By March 2011 it plans to have slashed that figure by 7Mt, closing or suspending operations at some factories.

If it does shut down facilities, it would be the first time since 2004, when it dissolved a subsidiary in Fukuoka Prefecture.

A facility in Oita Prefecture is believed to be under consideration for shuttering. Specifics, including personnel cuts, could come by the end of next month.

Ube Industries currently has annual production capacity of 7.5Mt. It intends to lower this by 1.5Mt by suspending operations at its Yamaguchi Prefecture plant in April.

Fifth-ranked cement manufacturer Tokuyama Corp is considering shutting down one of the three lines at its Yamaguchi Prefecture factory.

Given that Taiheiyo Cement, Ube Industries and Tokuyama combined control about half of the domestic market in sales, their moves are expected to help relieve overcapacity.

While manufacturers of cement and other materials are downsizing domestic facilities, they are aggressively investing in emerging markets, including other Asian nations. Taiheiyo Cement plans to double its production capacity in Vietnam in April.