The Great Tohoku Earthquake: Part 2 – the Housing Situation

Posted by Jim Ivanoff
March 17th, 2011

The numbers: 500,000 homeless, 76,000 buildings damaged representing approximately $125 billion, and most tragically over 10,000 presumed dead. The current situation is a catastrophe in every sense of word. Now Japan has the tremendous challenge of rebuilding. The question is how.

For the past few days I have been flooded with inquiries for plywood and OSB. Japanese producers had become very competitive in panel products and as a result builders are dependent on domestic producers. Unfortunately the great earthquake and tsunami have wiped out a major plywood producing region which accounts for 35-40% of the nations supply. In cubic meters that is equivalent to 75,000-80,000 m3 per month. The optimists say it will take companies 2 months to get back into production. Others say it may take up to two years. Adding to the production issue, companies were holding very low inventories as March is their fiscal year-end.

In the meantime, there is a lot of anxiety all over Japan about where they will be able to find supply to make up for this shortfall (there also seems to be an immediate shortage of insulation). It seems that many companies are looking to Canadian suppliers to help out. In the past, 4×8 sizes were a barrier against acceptance of Canadian plywood, but everyone I have spoken with in the past two days have said they would gladly take 4×8.

Due to the extensive damage in the Tohoku region, there is an urgent need for emergency shelters. It has been reported that the Japanese government is asking industry associations to come up with a supply of 30,000 units of temporary housing (units that are designed to be lived in for up to ten years). Typically such housing comes from the prefab construction industry in the form of metal structures. However, such units were heavily criticized after the Kobe earthquake as they were cold in winter and like ovens in the summer. Therefore, the Japanese government is also looking for wood solutions this time.

It would be in bad taste to talk about business opportunities resulting from this catastrophe, but without a doubt Japan needs countries like Canada to step up with stable supplies of the materials it desperately needs to rebuild. Current supply limitations in B.C. might mean it will be difficult to do so, but I hope Canadian companies will do what they have to in order to offer assistance. Japan has been our largest offshore market for a long time and it is now our turn to step up to the plate to help out our friends.

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