Wednesday, March 30, 2011

Potential nuclear fallout in the laser market

I’m getting more concerned about the nuclear accident situation in Japan than I was when I wrote last week’s blog. At that point I could envision a sooner rather than later return to normalcy at Fukushima, but now, as this is written, it’s beginning to look more like Chernobyl.

Setting aside the human misery connected to this event is difficult; here in my home state we are already measuring increased, but said to be safe, radiation levels in our drinking water, and the neighboring state of Vermont reports measureable radiation level increases in the snowpack on the mountains.

I’m far from being knowledgeable about nuclear power plant meltdowns, but many years ago, a good friend, Professor Vladimir Kovalenko of Kiev Polytechnical University, shared his observations on the Chernobyl solution with me. He had asked my assistance in soliciting funding from the U.S. Department of Energy to work on a solution to dismantling the Chernobyl reactor. It turns out we couldn’t get anyone interested in his approach, but in the doing I learned a little about sealing off reactors. Thus, I have a hard time seeing Fukushima’s three reactors being sealed as successfully as Chernobyl. I certainly hope they will.

Thursday at midnight is the end of Japan’s fiscal year. In the past, this was “hell week” as companies worked 24 hours a day to ship every billable order in their plants to insure a healthy end of year revenue report. It’s too late for many of the companies this year as it will be nearly impossible to get enough product shipped to influence the numbers.

I don’t have the facts, just reports here in the U.S. media about no shipments of parts, for example in the automotive industry, from Japan. At the very least, this lack of billable shipments has to hurt the last quarter and year end numbers. I estimate that Japan accounted for more than a $1 billon of industrial lasers and systems last year, and at 15% of world share any change in sales will be noted in the total global number for 2011.

I am currently working on a Mid-Year Report on the Industrial Laser Market that will be presented as a Webcast on June 30. I am going to delay making my final PowerPoint slides as long as possible so that I can get the Japan numbers right. The total impact of the Fukushima accident won’t likely be known until the end of the first half year here in the U.S. when public companies report their 6 month revenues.

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