Major businesses prep for Tokyo megaquake

Major businesses prep for Tokyo megaquake

TOKYO - Based on lessons learned from the Great East Japan Earthquake in March 2011, major businesses in the Tokyo metropolitan area are implementing measures to minimize potential damage from a megaquake expected to strike directly beneath the capital, while small and midsize companies lag in their own antidisaster plans.

Measures taken by some major businesses include transferring their headquarters to buildings with greater quake resistance and compiling business continuity plans, or BCPs, on the assumption that such a disaster would significantly affect their operations.

Nippon Paper Industries Co. transferred its headquarters in March from Chiyoda Ward, Tokyo, to another building with a quake-absorbing structure in the Ochanomizu area in the same ward. Also, housing material company Nichias Corp. streamlined offices in Tokyo in July and moved to a building with state-of-the-art disaster-effect reduction facilities in Chuo Ward. Fuji Heavy Industries, meanwhile, sold its headquarters in front of JR Shinjuku Station and plans to move to a new building in Shibuya Ward in August.

The Central Disaster Management Council, which projected damage from a megaquake in Tokyo and surrounding areas, has urged businesses to compile a BCP in advance to allow themselves to continue operations smoothly in the event of a major disaster.

Kao Corp. made a plan to move part of the functions of its headquarters in Chuo Ward, Tokyo, to a factory in Wakayama in preparation for a major quake damaging the Tokyo headquarters. It also plans to send relief supplies from its Wakayama factory to a factory in Kawasaki in case the Kawasaki facility, which produces products for the Tokyo metropolitan area, is damaged.

Toyota Motor Corp., which suffered a break in its supply chain of car parts after the 2011 earthquake, has compiled a group BCP in cooperation with its small and midsize subcontractors to enhance the supply chain's resilience.

There are about 1,100 factories of car parts manufacturers that Toyota deals with directly nationwide, plus further chains of smaller subcontractors. Going as deep as the 10th layer of the subcontractor chain, Toyota has compiled a database of direct and indirect subcontractors to prevent its supply chain from being cut even if the factories are damaged in a disaster.

While major companies ratchet up their efforts to deal with a possible megaquake, small and midsize businesses are lagging in compiling BCPs. The metropolitan government started in fiscal 2010 a program to support small and midsize firms to compile the plans for free, and about 250 companies have done so thus far.

However, according to a 2012 survey by the Small and Medium Enterprise Agency, only about 10 percent of small and midsize companies have compiled BCPs. "It's hard to tell whether each company is capable of compiling a BCP," Akio Mimura, chairman of the Japan Chamber of Commerce and Industry, said at a press conference Thursday.

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