• Factories at a standstill as heavy rain and flood affect central and southern Japan

    09 July 2018

    At least 100 people have died and 50 others are reportedly missing, as torrential rainfall continues to affect central and southern parts of Japan since July 7. Emergency rescue efforts are ongoing, particularly in Hiroshima prefecture which was hit the hardest from related flooding and subsequent landslides. According to media sources, evacuation orders are in place for parts of Chubu, Chugoku, Kansai, Shikoku, and Kyushu regions.

    The adverse weather conditions and associated factors such as road blockages, power outages and water supply shortages have affected factories located in the aforementioned regions. According to reports, electronics manufacturer Panasonic ceased productions of its video cameras at the Okayama plant over the weekend of July 7-8. It remains unclear when productions are likely to resume. Amazon also reportedly halted operations at its distribution center in Okayama on July 7 but resumed work on the next day as the roads were cleared. Kubota Corp., an agricultural equipment manufacturer, also halted productions at its plant in Hyogo prefecture as the factory was partially flooded. Sources indicate that it resumed operations on July 9.

    IHI Corp., a heavy machinery manufacturer, halted productions at its No. 2 Kure factory in Hiroshima due to shortage of water supply and the difficulties which employees face in commuting to work through flooded roads. Mazda Motor Corp. also halted productions at its factories in Hiroshima and Yamaguchi prefectures due to hazardous condition of travelling to work. Reports suggest that Mazda Motor will continue to halt operations until July 10. Other automotive plants such as those for Mitsubishi Motor Corp. stopped operations at three of its plants due to water shortages and Daihatsu Motor Corp., a subsidiary to Toyota, suspended productions at four of its plants in Osaka and Kyoto due to the delay in acquiring parts on time. Both plants are expected to resume work on July 10.

    Disruptions to road, air and rail services were also reported due to the torrential rain. The Tokai-Hokuriku, Higeshi-Kyushu and Kochi highways have been closed since the evening of July 7. Latest reports on July 9 indicate that sections of the Sanyo (Kobe-Okayama-Hiroshima), Chugoku, Nagasaki, Oita and Kyushu (Kitakyushu-Fukuoka-Kumamoto) motorways remain closed. Road freight movement, including pickup and delivery services, is likely to be impacted in the coming days with residual delays to be expected until flood water recedes. At least 70 flights were cancelled at Hiroshima International Airport and Kagoshima International Airport on July 7-8, though flights to and from the airports in Kyushu and Chugoku have resumed. Bullet train services such as the San-yo Shinkansen line between Osaka and Fukuoka cities reportedly resumed on July 9. However, delays and cancellations continue to be reported on the Tokaido Shinkansen line (between Tokyo and Shin Osaka cities) and Kyushu Shinkansen line (between Fukuoka and Kagoshima cities). Intermittent delays have also been reported for sections of Japan Railway (JR) Central, JR West and JR Kyushu.

    Weather in most of the affected regions is expected to improve in the coming days; Japan Meteorological Agency (JMA) has lifted heavy rain and flood warnings which were in place since July 5. However, severe rain warnings remain in effect for Ehime prefecture and flood warning for Okayama prefecture.

    Precedents indicate that factories in Japan normally cease operations during and in the aftermath of a natural disaster in order to assess the damages, carry out safety checks, and ensure employee safety. The recent earthquake in Osaka on June 18 had triggered the same firms to cease operations for 24 to 48-hours across Osaka and Kyoto regions, though there were no major disruptions to businesses. However, as Japan is prone to natural disasters, frequent or intermittent supply chain disruptions can be expected. Customers with tier 1 and tier 2 suppliers in the country are advised to initiate business agility and disaster contingency plans for recovery purposes.

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