CSR

CSR Report

Fujikura Group CSR Report 2012

Feature Article

Damage Caused by Flooding in Thailand: Struggles in the Recovery of the Electronics Business

The flood that hit Thailand in October 2011 caused tremendous damage in the country, both on a humanitarian and physical level, including to the Fujikura Group's nine important manufacturing bases for the electronics business.

The great 2011 Thailand flood

The huge flood that hit the Fujikura Group's nine manufacturing bases was caused by a series of monsoons, which brought about heavy rains and increased annual rainfall by more than 50% compared to the average. Moreover, because the country has flat plains that extend over large areas, serious damage arose from the widespread flooding. The amount of floodwater was said to have exceeded the total output of the Chao Phraya River, which flows through the mountainous area in the northern part of Thailand. The peak water quantity of the river is said to be equivalent to two-thirds the volume of Lake Biwa-ko.

Flooding period	:	Two months from October 4 to December 8
Flooding area	:	About 6 million hectares (58 provinces in Thailand, including Chiang Mai located in the north and Bangkok located in the Chao Phraya basin)
Impact to companies	:	Flooding occurred to more than 700 companies in seven industrial parks, including 460 Japan-based companies.
Victims	:	446 were killed and 2.3 million people suffered damage as of November 5, 2011.
Monetary damage	:	865 billion yen in Thailand (as of November 17)

All nine electronic component manufacturing bases of the Fujikura Group suspended operations due to the flooding

Due to the once-every-50-years flood that hit Thailand in October 2011, all nine bases for the electronics business suspended operations. The facilities were flooded for two months, with floodwaters reaching as high as three meters from ground level. The Group established a committee within Japan to deal with the serious risks associated with the flooding and also established a local emergency headquarters to implement recovery measures based on the Group's recovery policies. Local employees made strenuous efforts to protect many products from the flooding and also salvaged a range of molds and equipment from the muddy floodwaters. However, even after floodwater was cleared from the facilities, more difficulties were faced. The facilities were badly damaged and foul-smelling. Nonetheless, the employees displayed strong commitment day after day in their struggle for recovery, receiving full support from the entire Group. The result was that in April, only four months after the flooding, all damaged bases finally resumed operations.

Even now, employees are continuing their efforts toward full recovery.

Measures implemented toward the recovery of the electronics business

Based on the policies set for the recovery of the electronics business that was badly affected by the flooding in Thailand, we are implementing measures to ensure recovery from the damage and to avoid suffering from similar damage in the future. Specifically, where possible, we installed flood prevention walls at the manufacturing bases that had suffered damage from the flooding and have made it a rule to conduct our manufacturing activities on the second floor or higher at bases where the installation of the walls could not be performed. Moreover, we established a new factory in the Kabinburi Industrial Zone, which is located on high ground. We are also expanding the capacity of our new factory in Vietnam and shifting part of the manufacturing activities conducted in Thailand to our facilities in China. Moreover, we are reviewing the details of our electronics business to strengthen its structure and are fostering the "Focus & Deep" strategy along with other measures. At the same time, we are making all-out efforts to achieve full recovery of the flexible printed circuit (FPC) business, which is the core of our electronics business, by the end of fiscal 2012.

[Manager in charge of the local business]
Takashi Nishida, President of FETL

The tragic flood that hit Thailand last October remains ingrained deep in our collective memory. On that day, watching the flood advance on our facilities, I shouted, "Evacuate at once!" and employees began to evacuate. Among the Fujikura Group's bases, the YDT factory was the first to be flooded on October 4 and subsequently, other Group factories were also flooded over a period of about two weeks. A total of nine bases, which our forerunners had long been building up since 1984, were severely damaged. During the two-month flooding period, employees struggled to salvage as much of the equipment and molds as they could, but after the floodwater was cleared, we stood paralyzed at the extent of the damage; an errant machine had breached one of the walls, many devices became red with rust, a tank had been turned upside down, many documents and products had been scattered about, and the smell was very stale. At that time, we believed that it would be difficult to recover from the damage, but eventually, all the damaged facilities resumed operations. I would like to express my heartfelt gratitude to the local employees in Thailand who made strenuous efforts toward the recovery and also to all those who kindly supported the recovery, including Fujikura Group members. We will make even further efforts to achieve full recovery and further growth, for which I would like to ask for your continued kind support and advice.

[Manager in charge of the Electronics business]
Masato Koike
Senior Vice President and Member of the Board, Fujikura Ltd.

It has already been about 10 months since the electronic component manufacturing facilities were severely damaged by the flooding. At present, all the damaged facilities are in operation as a result of strenuous recovery efforts made by our employees and thanks to strong support from all those concerned.
I would like to say thank you to all those who supported the recovery in the face of seemingly insurmountable difficulties.
I would like to ask for your kind continued assistance as we move forward in conducting our business activities while being committed to achieving full recovery of our electronics business, which is one of the mainstays of the Fujikura Group.