Construction Business Practice Suffers Japan Electric Wire Makers

Japanese electric wire makers take more trading risk compared with makers in Europe and USA, according to report for business practice of construction electric wire by Japanese Electric Wire & Cable Makers’ Association. Japanese makers take risk for raw materials cost volatility and design and volume change during construction while general contractors and specialty constructors take the risk instead of electric wire makers in Europe and USA. Japanese electric wire industry tries to improve the practice. The association researched the practice in Japan, USA, United Kingdom, France and Germany from July 2007 to March 2008 through third party think tank. European and US construction industry have same distribution chain for construction electric wire as Japan, according to the report. However, Japanese general contractors commit fixed construction cost with the building owners and higher copper price could be absorbed in distribution chain from makers to general contractors. US general contractors usually have contract with the building owners under which the owners should pay more when the materials price would increase from the level as of design. French transaction is to decide the electric wire price based on copper price at 2 month before the delivery. Japanese electric wire buyers tend to change the purchase volume and delivery timing when they, usually general contractors, which have both design and construction units, revise the specification and volume after construction start. European and US industry tend to keep the volume when the constructors can estimate the requirement based on design by individual designers.