Taiheiyo Cement Corp., Japan’s biggest producer, said profit at the U.S. unit may fall as much as 20 percent this year "in a worst-case scenario".
Operating profit at the US unit, which accounts for a third of the Tokyo-based company’s earnings, may decline from last year’s $180m, said President Keiji Tokuue, adding that the unit can at best match 2007’s result. Taiheiyo is scheduled to report fiscal annual earnings on May 13.
"`We’re caught in the turbulence of the U.S. market,’’ said Tokuue, 60. "The decline in volume sales of cement is unlikely to be offset’’ by contributions from three US ready-mix concrete makers acquired this year.
Tokuue predicts a recovery in the US cement market in late 2009, and the company may wait until its business revives before investing in a fourth factory there.
"It’s going to be a tough year,’’ said Katsuhiko Ishibashi, an analyst at Deutsche Securities Inc. in Tokyo. Because the company derives much of its profit from the U.S., the slump in the U.S. market would be a big impact.’’