Thai Farmers Bank Pcl created a 10-member overnight desk. TDK Corp, Japan's biggest maker of magnetic parts for hard-disk drives, may avoid shipping disk drive components through the Suez Canal. Japan's Denso Corp, the world's fourth largest auto-parts maker, is stockpiling air-conditioner components in Saudi Arabia.
Asian companies are bracing for war in Iraq that they say will disrupt trade, drive up manufacturing costs and curb demand for everything from cars to computer chips. Extended conflict may also stoke rising oil prices in a region where Japan and South Korea import almost all their oil, India buys 70 percent and China imports a third.
"The longer the war stretches, the more difficult it will get for Asia, which over time has become more dependent on imported oil than other parts of the world," Prasenjit Basu, an economist at Credit Suisse First Boston in Singapore, said before the attack began.
Japan, struggling to emerge from a third recession in a decade, is particularly at risk from a long war. Exports, which accounted for half Japan's 0.5 percent growth last quarter, fell in December and January and the Nikkei 225 Stock average is hovering at a 20-year low.
The Japanese economy will shrink 0.5 percent this year if war lasts between six and 12 weeks, the Daiwa Institute of Research estimates. That compares with 0.5 percent growth if there were no war and growth of 0.2 percent if war lasted from four to six weeks.
Companies in Japan are doing what they can to prepare for the disruption of war, even though it will add to costs. For Nippon Yusen KK, Japan's biggest shipping line, sending goods around the Cape of Good Hope would add ?4 billion (US$34 million) a month to its costs, said company spokesman Ken Ogasawara.
Elsewhere in Asia, some banks say they will trim their lending to exporters. Exports account for about two-fifths of South Korea's economy. In Singapore, exports of semiconductors, chemicals and other goods exceed the size of the economy by more than half, while they equal the size of Malaysia's economy.
"We will tailor our strategy to meet the effects of the war," said Rozali Mohamed Ali, executive director at Commerce Asset-Holding Bhd, Malaysia's second-biggest lender. "No doubt it will impact our economy and our business."
Even so, companies have had plenty of time to plan for war.
Japanese automakers Honda Motor Co, Toyota Motor Corp and Nissan Motor Co have all been raising production at factories abroad and stockpiling parts to keep them running in case shipments are disrupted. TDK, which depends on exports for 70 percent of sales, expects to ship European exports around Africa should the Suez Canal be shut, said spokesman Kazutoshi Kogure.
In India, Asia's third-largest consumer of oil, the government has told refiners to boost their liquefied petroleum gas storage capacity to 30 days from nine. Indian Oil Corp, the nation's biggest state-run refiner, last month bought 52,000 tons of cooking gas from Saudi Aramco.
Companies such as Richmond Ltd, New Zealand's biggest beef exporter, are basing their plans on the 1991 Persian Gulf war.
Graeme Milne, chief executive at the company, said he'll use ports in the Red Sea if the Gulf is cut off.
RSS