Japan's Nikken sees 'long road ahead' for reconstruction

Japanese rental company Nikken said that around 13% of its fleet - 330000 items of equipment - is currently working on the clean-up following the March earthquake and tsunami.

Nikken's president and chief executive officer, Mr Masaki Kurita, told International Rental News (IRN) that while progress is being made in removing debris and in building temporary houses, reconstruction efforts have yet to really start.

"We see a long road ahead in reconstruction...The Administration has estimated a total budget at 19 trillion Yen (€171 billion) which covers the coming 5 years", said Mr Kurita.

Nikken - one of the ‘big four' Japanese rental companies alongside Nishio, Aktio and Kanamoto - said it was increasing its capital expenditure budget this year by 17 billion Yen (€36 million) to help meet the increased demand.

The extra demand has led to significant price rises in the affected areas, said Mr Kurita, as well as 8% increases in utilisation rates in the clean-up zone.

"Rental rates, which had been depressed at unsustainable levels, have improved to list price level - depending on the products - compared to a same period year ago. Generators, excavators and vehicles are in short supply", he told IRN.

In addition to the increased investment the company will open seven new depots in the disaster struck areas in the next year.

The full version of this interview will be published in the September-October issue of IRN as part of our annual World Rental Report.