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Related topics: Caterpillar, General Electric, Deere, ETF, Michael Brush

Four weeks after the Tohoku earthquake and tsunami, it's still difficult to view the terrible images coming out of Japan and imagine a return to any kind of normalcy there.

But some are already thinking of the massive rebuilding ahead, and we're getting a picture of how much it's going to cost -- an estimated $309 billion, according to the Japanese government.

Of course, at this time of tragedy, our thoughts go out first to those who perished and those still fighting to survive. In truth, given the ongoing crisis at the Fukushima nuclear power plant, the disaster may not even be over -- so the focus now is rightly on charitable giving and humanitarian relief.

But eventually, the companies applying their skills and providing much-needed equipment to rebuild Japan will make money. And investors in the companies that profit from all that work will be rewarded; that's how the system works.

That $309 billion price tag on the recovery effort is a big number, particularly in a still-slow economy. "If it trickles down, as we all know it is going to have to, I think this is going to be a major opportunity for a lot of our industrial companies here in the U.S.," says Jeff Duncan, the CEO of Duncan Financial Management in St. Louis.

Image: Michael Brush

Michael Brush

So how do you invest in Project Japan?

On the front lines

Duncan and the other professional money managers I put that question to want you to know they're thinking first about the human tragedy. But helping Japan rebuild is a positive thing, so hold the nasty emails.

Here are the companies they expect to be involved:

  • Construction-equipment providers like Caterpillar (CAT, news), Deere (DE, news), and CNH (CNH, news) may be sending a lot of earth-moving and other gear to Japan.
  • Energy infrastructure companies like General Electric (GE, news), Siemens (SI, news) and Chicago Bridge & Iron (CBI, news) may be providing a significant amount of equipment and knowhow to rebuild power transmission systems and retool Japan's energy supplies.
  • Basic building block materials like aluminum, copper and steel will see a boost. This should support prices for exchange traded funds in this space, but also a company like Rio Tinto (RIO, news), which mines for bauxite, copper, silver and other metals that may get a demand boost because of reconstruction efforts.

Let's take a closer look at these three areas.

Construction equipment

After the devastation in Japan following its worst tragedy since World War II, there's obviously going to be a lot of need for heavy-construction and earth-moving equipment. As the largest heavy-equipment manufacturer in the world, Caterpillar seems like a natural to sell much of the gear for the job -- but how much is hard to say. Its chief rival in heavy equipment, Komatsu (KMTUY, news), is based in Japan. And so is another major player in the space, Hitachi (HIT, news). There's likely going to be a natural bias in Japan toward buying from domestic suppliers like these.

Still, "we think Caterpillar could see some opportunity at the expense of its Japanese peers," says Morningstar analyst Adam Fleck. There are three reasons for optimism about Caterpillar's opportunities.

First, the company provides top-rate service and support, which is key to construction job-site managers. They don't like any downtime, because even small delays can sideline a cascade of workers. Caterpillar's reputation here has helped it carve out $1.2 billion in annual revenue in Japan. It's there in a big way, which means it can get more business.

Second, Caterpillar competitor Komatsu has a plant near the site of the damaged Fukushima nuclear power plants. Shutdowns there and elsewhere in the country could limit the ability of Komatsu -- and Hitachi -- to meet potential demand. Caterpillar says its plants in Japan have not been damaged, and it's a natural to pick up any slack. And if Komatsu and Hitachi divert construction equipment sales from elsewhere in the world, Caterpillar can make up the difference in those locations, too.

Third, Caterpillar is a major supplier of power generators. "Given the fact that they have had such a disruption in the power grid, large back-up power generation is going to be required," says Eric Marshall, a director of research for Hodges Capital Management. "Capacity is already running tight due to demand from emerging markets and mining, and oil and gas sectors," he says. Goldman Sachs analyst Jerry Revich agrees that Caterpillar could see "meaningful demand" for power generators in Japan. Emerson Electric (EMR, news) could see a knock-on effect here, in that it is a major supplier of alternators used by Caterpillar to build generators.