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No. 364, January 2000

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American Companies in Japan


Just a year after launching production of chemical mechanical planarization slurries in Geino, Mie prefecture, the Microelectronics Materials Division of CABOT CORP. announced a major expansion of the facility. It will boost capacity 150 percent and increase the production work force by 200 percent. The extra capacity will go onstream early in 2000. The plant serves semiconductor producers not only in Japan but elsewhere in the Asian Pacific. Cabot MMD, which is based in Aurora, Illinois, is the leading global supplier of CMP slurries for polishing oxide, tungsten, copper and aluminum used in various semiconductor manufacturing processes.

PROCTER & GAMBLE CO.'s subsidiary and WACOAL CORP., Japan's top lingerie manufacturer, have tied up on sanitary napkins — a market where the duo thinks that an innovative product can steal share from other competitors. Their candidate is the Whisper W System, which combines P&G's thin but absorbent Whisper Fresh Slim sanitary napkins with underpants made on an OEM basis by Wacoal. That product has a unique construction that keeps the napkin close to the body, thereby helping to prevent leaks without using a waterproof material. P&G will begin marketing the Whisper W System in March 2000 through its existing Whisper sales channels. Wacoal will provide marketing support. The partners are aiming for sales of 1 million Whisper W Systems in the first year.

For the first time, an ultrasonic toothbrush is available in Japan. The $175 Ultima is manufactured by SONEX INTERNATIONAL CORP. of Brewster, New York. TORAY IREEVE CORP. is distributing the product under an agreement with ASAHI IRIKA CO., LTD., which obtained marketing rights to the ultrasonic toothbrush in 1998. Toray Ireeve is projecting Ultima sales at 30,000 units the first year and 100,000 annually after three years.

DIGITAL DOMAIN, INC., an award-winning digital visual effects studio, has teamed up with RISE ENTERTAINMENT INC. of Kyoto to win projects from Japan's amusement industry. The Venice, California com-pany's agent is pitching its ride attractions to theme parks and the like, hoping to gain contracts from three such facilities a year. Before the tie-up with Rise Entertainment, Digital Domain had completed one project in Japan and received a contract for another.

Tokyo's DIGITAL AMUSE INC. has found a potential new use for computer graphics: digitizing the images of models, real and imaginary, for promoting products over the Internet, for instance. To move into this business, which it hopes to get off the ground in the spring of 2000, digital amuse tied up with ELITE MODELS INC., one of Manhattan's premier modeling agencies. The Japanese company initially will digitize the images of 30 Elite models. If the idea pans out, the digital amuse venture will save advertisers the often stiff cost of hiring real models.

The largest operator of golf facilities in the world is seeking acquisition opportunities in Japan, where property prices have fallen to more reasonable levels because of the economy's decade-long problems. AMERICAN GOLF CORP. runs more than 320 private, resort and public golf courses and practice centers in the United States and the United Kingdom. In Japan, the Santa Monica, California company reportedly hopes to take over anywhere from 30 to 50 golf courses within five to 10 years. The first of what could be three initial acquisitions is expected to be finalized by March 2000, which is the projected timing for AGC to open a subsidiary.

For nearly the last three years, organizations in Fukuoka have studied the feasibility of building a waste-to-energy facility using ENERGYANSWERS CORP.'s Processed Refuse Fuel technology. In the meantime, the municipal waste problem in Fukuoka and elsewhere in Japan has only worsened. Now, the Albany, New York firm, which bills itself as the resource recovery company, has licensed its PRF technology to NISHINIPPON ENVIRONMENT ENERGY CO., INC. Although all the details have not been worked out, within two to three years, the Fukuoka business could be operating a facility capable of combusting 400 tons of municipal solid waste a day in an environmentally benign way while, at the same time, recovering recyclable materials and generating energy.

The realignment of the international advertising industry is having effects in Japan. For instance, following the combination of BOZELL WORLDWIDE with New York City neighbor FCB WORLDWIDE, common parent TRUE NORTH COMMUNICATIONS, INC. of Chicago is integrating the subsidiaries of the two agencies. FCB Worldwide, which now ranks as the number-five global agency brand as well as the largest agency in the United States, is the surviving name. The combined company has a staff of about 50 and projected 1999 billings of $58.3 million. Its first order of business is to pump up sagging revenues. The operation will continue previous local affiliations — that of FCB Worldwide with TOKYU AGENCY CO., LTD. and Bozell Worldwide with DENTSU INC.

Ad agency SEARCH & SEARCH BATES YOMI-URI has been dissolved. It was formed in January 1997 by New York City's CORDIANT COMMUNICATIONS GROUP (31 percent), which included the Bates agency name, SEARCH & SEARCH (31 percent), then also part of Cordiant Communications, and YOMIKO ADVERTISING, INC. (38 percent). Search & Search no longer is under Cordiant Communications' umbrella, making continuation of the joint venture increasingly difficult. It will form a new relationship with Yomiko Advertising, while Cordiant Communications will restructure its dealings with the Tokyo ad agency.

New York City's TAYLOR RAFFERTY, a specialist in crossborder investor relations, plans to move into the Japanese market in the spring of 2000. Through a partnership with an unnamed domestic company, it will help Japanese corporate clients develop strong investment messages and assist them in identifying the most effective ways to deliver this information to market professionals.

Beginning in March 2000, the subsidiaries of NET-RATINGS, INC. and A.C. NIELSEN CO. will start compiling information on the Internet surfing habits of some 3,000 individuals. Internet media tracker and market researcher NetRatings originally had planned to launch this service on its own (see Japan-U.S. Business Report No. 361, October 1999, p. 36), but for reasons not disclosed, it decided to tie up with A.C. Nielsen, the world's largest market research firm. The new partners expect to expand their sample base to 10,000 on-line users at the end of 2000.

With merit-based salary calculations starting to take the place of the seniority-based payment system characteristic of big Japanese corporations, ARTHUR ANDERSEN LLP and CASIO COMPUTER CO., LTD. see a demand emerging for compensation-related consulting and software. Their pairing is a natural since Casio ranks first in the Japanese market for personnel administration software and Arthur Andersen is one of the world's top business consulting operations. The two firms hope to advise 10 companies in their first year of cooperation and to post revenues of $970,900 from this work.

An exchange rate of ¥103=$1.00 was used in this report. aaaaa

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