Power crunch puts Japan Inc to the test

At first glance, business at Miwa Amauchi's precision metal-parts factory near Tokyo appears normal.

A laser beam carves through metal sheets while nearby a worker, cigarette hanging from his lips, makes small adjustments to a machine press bending delicate steel components.

Upstairs in her sparse office, however, Amauchi frets about the firm's future after an earthquake and tsunami on March 11 knocked out a big portion of the electricity supply to the Tokyo area, leaving millions to cope with rolling power blackouts.

"Compared to the suffering that people in disaster-hit areas are going through, what we have to bear is tiny so I don't want to complain," Amauchi, who manages sales, said. "But if this drags on for a year the company could be in trouble."

Indeed, analysts suggest power blackouts will ultimately cause the biggest economic damage to Japan, a vital player in the global manufacturing supply chain.

The Tokyo area and regions further north make up half of the economic activity for the world's third-biggest economy, Nomura Holdings estimates.

With Japan heading towards summer, when power demand tends to peak as air conditioners are used to combat rising temperatures, the power crunch could get worse.

That threatens to idle expensive machinery at the Amauchi family firm, founded 53 years ago, and leave its 26 workers with nothing to do.

The quake and tsunami left 28,000 people dead or missing. Direct damage from the twin calamity alone could be as high as $300 billion, making it the world's costliest natural disaster.

The quake and tsunami also crippled the Fukushima nuclear power plant, 240 km (150 miles) north of Tokyo, triggering radiation leaks that officials say could take months to stop.

Image: People walk at an area destroyed by the March 11 earthquake and tsunami in Ishinomaki, northern Japan on April 4, 2011.

Text: Kazunori Takada, Reuters

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