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Natural disasters

Japanese manufacturers threatened by flood-prone industrial parks

27% of facilities at risk of being submerged by as much as 5 meters of water

The city of Nagano suffered major flooding when Typhoon Hagibis swept through Japan last month. (Photo by Akira Kodaka)

TOKYO -- The Japanese manufacturing sector risks being crippled by the torrential rains and flooding that accompany the increasingly strong typhoons that hit to country each year.

580 of 2,181 industrial parks are in high-risk flood zones, according to a Nikkei investigation conducted after Typhoon Hagibis. That means nearly 27% of these areas -- key to Japan's manufacturing output and global supply chains -- could be underwater in the event of torrential rains similar to those that hit the country in October.

Natural disasters in Japan have disrupted international manufacturers before. The March 2011 earthquake and tsunami seriously damaged Renesas Electronics' manufacturing facilities, which produce semiconductor devices. That caused lengthy disruptions to global supply chains. Even damage to a small parts supplier could impact certain niche global markets.

The flooding in Keno Tobu Industrial Park in Tochigi Prefecture, less than 100 km north of Tokyo, underscores the risks. One of the companies there, machine parts manufacturer Horie Parts Kogyo, was hit hard when Hagibis stormed through the region. Presses and finished parts were left submerged in knee-deep water, and the production line was down until Oct. 17, when it partially came back online.

"We've never experienced flooding like that before," said one employee. "All we did [to prepare] was seal up the plant's windows to keep rain and wind from blowing in."

The increasing frequency of natural disasters hitting Japan means both governments and businesses need to assess the risks that floods pose to key manufacturing facilities.

Using a geographic database and flood-risk maps provided by the land ministry, Nikkei examined the flooding risk for 2,181 industrial parks that are 100,000 sq. meters or larger. Of the 580 that are in high-risk areas, 220 could be submerged by waters 2 to 5 meters deep, while 35 could be under at least 5 meters of water.

Floodwaters of 2 meters or more submerges the first floor of a detached house. If water reaches 5 meters, the second flood is also under water. Keno Tobu Industrial Park is in a 2- to 5-meter flood zone.

Local governments and land developers went on a building spree when Japan's manufacturing sector was booming from the 1960's through 1980s. But they paid scant heed to disaster risks, and often located industrial parks on large flat plots of land along rivers that were easy to develop. It was not until 2001 that the government started designating flood-prone areas.

Hokubu industrial park in the city of Nagano north of Tokyo also flooded after the Chikuma River overflowed during Hagibis. The park lies in an area subject to floods of 2 meters or higher. It was developed in 1990 and contains a flood-control pond that is designed to prevent flooding, but only from internal causes, such as drains and sewer pipes. The October flood quickly overwhelmed the pond.

Some companies have been more proactive in dealing with the threat of high waters. During the October storm, a large number of companies in Koriyama Central Industrial Park in Fukushima Prefecture were submerged during the typhoon. But Anritsu, a manufacturer of measuring equipment, had the foresight from past floods to move equipment to its second floor and suffered little damage.

"It's important for companies to review their business continuity plans" so they will have procedures in place to prepare for and recover from damage, said Junjiro Shintaku, a professor at the University of Tokyo who specializes in industrial park management.

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