Mar 29, 2017

Toshiba: Japan's nuclear challenge

On Wednesday, Toshiba, one of Japanese largest companies, announced that it was placing Westinghouse — its US based nuclear power subsidiary — into Chapter 11 bankruptcy.

It had already said that it would withdraw from the nuclear construction business and that Westinghouse, presumably with all its existing liabilities stripped out, was up for sale. All these moves follow the discovery of large-scale liabilities within Westinghouse's operations in the US which have forced Toshiba as the parent company to take a write-down of at least ‎¥700bn (some $6.3bn) and to postpone the publication of its annual results.
The question is what happens next, and the key player in answering that is the Japanese government which must now decide whether it wants the country to remain a significant player in the business of civil nuclear power. Within Japan over recent years the focus of the nuclear sector has been on the restoration of confidence necessary to reopen the internal nuclear plants which were closed after the Fukushima disaster in 2011.
Progress has been slower than expected — just two stations have restarted and another 24 are seeking regulatory approvals to come back on-stream. Given the need to rebuild public confidence the process cannot be rushed and in many parts of Japan there is serious local opposition.
The underlying strategy of the country's once all powerful nuclear establishment has been to develop an export business based on the country's undoubted skills in the nuclear industry and the reach of its major companies such as Mitsubishi Heavy Industries, Toshiba and Hitachi.

Financial Times
by: Nick Butler