The accelerating Japanese defence spending is likely to boost Kawasaki Heavy Industries' sales in the upcoming years above their projections, said its CEO on Wednesday, as contractors profit from an unprecedented military buildup.

Sanae Takaichi, Japan's prime minister, plans to increase defence spending from about 1% of GDP in March 2023 to 2% by the end of March 2026, two years sooner than originally planned. This is to "deter China" from pursuing territorial ambitions throughout East Asia.

Next year, her government will begin to develop a new "defence" plan.

Yasuhiko Hashimo, Kawasaki's president, said at a recent press conference that since?Takaichi assumed office in October "plans are clearer, more concrete and predictability is higher."

The 'company, which manufactures submarines, missiles engines, military transport aircraft, and helicopters has 'predicted an increase in annual sales of defence units to?500-700 billion ($3.2 billion-$4.5billion) by March 2031, from?about 24 billion yen a year ago.

Hashimoto stated that "based on current conditions we believe 700 billion yen is largely achievable and there's also a chance of upside beyond this." $1 = 154.9000 Japanese yen (Reporting and editing by Sumana Niandy; Nobuhiro Kubi)

(source: Reuters)