Sony restarts last of quake-hit plants

Sony has restarted production at the last of 10 factories in Japan that were damaged by the March 11 earthquake and tsunami, although it still expects months more disruptions to its supply chain.

The technology group said it had resumed output of Blu-ray video disks on Monday at a factory in Tagajo that was badly damaged by waves unleashed by the magnitude-9 offshore quake.

The factory also makes magnetic tapes for use in professional audio and video recording, but tape production would not resume until late July, Sony said.

The partial restoration was in line with a schedule it published in late April, in which the company said it hoped to resume some production at Tagajo by the end of May.

At first the outlook for the factory had been gloomier, with some observers saying immediately after the disaster that clean-up and repairs could take a year.

Masaru Kato, chief financial officer, told the Financial Times: “On March 11 or 12 we had no idea how fast we could recover, how much damage there was to the supply chain.”

Other Japanese groups have also been restoring operations more quickly than expected. Toyota, which shut all its Japanese factories for several weeks after the quake, is widely expected to beat by several months its official target of restoring global production to normal levels by the end of the year.

In April, Panasonic warned that revenues lost because of damaged factories could run to several hundred billion yen but earlier in May it said the impact would probably be just 33-50 per cent of that figure.

Nevertheless, the damage has been sizeable: a survey by Japan’s Nikkei newspaper this month put direct disaster-related costs for listed Japanese companies at Y2,000bn ($25bn).

Sony, as it reported a surprise Y260bn full-year net loss, said last week the cost of lost production and sales was likely to cut Y150bn from its operating profit this financial year. That forecast was not affected by the restart at Tagajo, which had already been factored into the calculation, the company said.

On Monday, Mr Kato said the net impact of the disaster on Sony’s profits would be smaller than the Y150bn figure because the company had saved costs in certain areas such as advertising. The savings were factored into Sony’s forecast of Y200bn in operating profits for the current fiscal year, he added.