Belfor Japan carving out a niche in Asia disaster-recovery services

by Kazuaki Nagata

Any smooth-running business can be devastated by fire, typhoon or earthquake, especially in Japan.

Faced with soot-covered or drenched electronic equipment in their factories, company managers probably think they have no choice but to shell out for replacements.

But in many cases it’s both quicker and cheaper to fix the machinery, according to Belfor Japan Co., which provides disaster restoration services specializing in repairing buildings, electronic equipment, documents and semiconductors.

“I feel our business has started to be seen as one option of disaster restoration in Japan,” said Koji Toritani, who heads the Belfor Japan branch established in 2004. The company’s sales have grown an average of 20 percent every year and reached ¥260 million in 2009.

While Belfor, whose headquarters are in Germany, has been around for a few decades in Europe, its business here is still new, and the Tokyo-based unit has faced some challenges getting recognized by domestic firms.

Toritani said that because there have been no other companies in Japan providing this kind of service, it never occurred to anyone here that equipment damaged in a disaster can be restored.

Although Japan has a “mottainai” (don’t be wasteful) spirit, Toritani said companies here tend to replace damaged equipment under the theory that the new gear will be better.

But going the repair route is beneficial for a number of reasons, the 51-year-old Nagasaki Prefecture native stressed.

Cases vary, but by repairing some industrial machines, companies can save about 70 to 80 percent of the replacement cost, according to Belfor. It could also take a half year or even a year to replace industrial machines, while Belfor’s work can be done in a week to a couple of months.

“Rather than renewing, I would like managers to first consider whether it can be restored,” said Toritani, whose company was mentioned in the 2004 white paper on disaster prevention published by the Cabinet Office as the only company in Japan providing disaster restoration services.

While Toritani said Belfor’s business is starting to be recognized, the company struggled for its first three years.

He can remember occasions where Belfor went to disaster sites to assess the situation and “people would look at us like ‘What are you doing here?’ “

Many Japanese companies also strongly rely on machine makers that send engineers who inspect damaged equipment and give advice.

The best way to convince people, Toritani said, is to demonstrate what Belfor can do and its restoration knowhow, including the use of latex film that removes soot, about 50 kinds of cleaning chemicals and a vacuum drying machine.

He cited an occasion where the company had to clean a ship’s engine room that was covered with soot from a heavy oil fire.

Such soot is hard to remove and requires a cleaning solution with strong alkali content, but the restoration team was able to bring in special cleaning chemicals made by Belfor in Germany.

Also, electronic machines damaged by fire often contain ions that facilitate corrosion, and Belfor can clean them with chemical solutions it has developed.

Toritani said a part of Belfor’s service overlaps with one provided by cleaning service companies like Duskin Co., but Belfor’s core services such as restoring electronic machines can’t be done by other firms.

He added that fires can cause so much damage it’s difficult to identify the cause and thereby prevent the same thing from happening again. But because Belfor has 30 years of disaster restoration knowhow and has handled more than 75,000 cases worldwide, the company is likely to find a solution drawing on a similar case in the past, he said.

“We are confident of our skills and believe that only we can provide this service,” said Toritani.

The company has confidentiality obligations, so it can’t disclose details of its customers, but it has provided services to places like Internet server rooms in government offices, it said.

Belfor’s charges vary greatly from case to case. One time it received ¥60 million to restore a factory that recycles plastic and turns it into energy. Another time it got ¥200,000 to prevent rust from spreading after a flood.

The Japan branch has nine employees and sometimes gets help from other branches in Asia, and vice versa. Belfor posted about ¥120 billion in sales worldwide in 2009.