Japanese producers see strong first quarter

Two of Japan’s leading cement producers are expected to post higher first-quarter profit supported by cement demand for earthquake rebuilding efforts.

The country’s largest cement producer, Taiheiyo Cement, is seen posting roughly JPY5bn (US$50.8m) in pretax profit for the April-June quarter, compared with a year-earlier loss of JPY4.2bn, marking the company’s first pretax rise in six years. The Nikkei reports that sales likely increased by 10 per cent YoY to about JPY190bn as shipments to Tohuku increased as the region rebuilds from the March 2011 earthquake.

Taiheiyo Cement, which has a cement capacity of 14.4Mt from six plants, benefitted from keeping transportation costs down and prices of coal also dropped Taiheiyo’s US cement business also saw shipments and prices rise.

Meanwhile, Sumitomo Osaka’s pretax profit is expected to be around JPY3bn. Sales rose by two per cent to JPY54bn. The company, which is the third biggest producer in Japan with a 8.10Mt capacity, sold more cement for apartment construction mainly in the greater Tokyo area, as well as for reconstruction. It also took more in fees from collecting coal ash.

The long-standing downward trend in Japanese cement consumption finally started to se a turnaround in 2011 and saw its first rise in six years to 42.10Mt. Last year demand rose by a further 2.1 per cent to 43Mt. Earthquake reconstruction demand in disaster-hit areas is expected to continue for several years, with increases of 3.5 and 3.4 per cent in 2013 and 2014, respectively.