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No. 365, February 2000

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American Companies in Japan


FOOD AND AGRICULTURAL PRODUCTS

Ready-to-use packaged fresh vegetables are catching on in Japan just as they have in the United States. DOLE FOOD CO. introduced this convenience in 1998 when it opened a processing plant in Takasaki, Gunma prefecture. The company now has built a second plant at a cost of $38.1 million in Kawasaki, Kanagawa prefecture. It has the capacity to turn out between 120,000 and 150,000 packages of cut vegetables a day versus the initial Dole factory's output of 50,000 to 60,000 bags daily. With the second plant and the product's growing popularity, Dole's subsidiary is projecting sales of ready-to-use vegetables at $24.8 million in 2000, about two-and-a-half times higher than last year.

Rising food safety concerns in Japan are creating new opportunities for GENETIC ID INC., which has made a name for itself by testing crops and processed foods for genetically modified organisms. One that the Fairfield, Iowa firm will exploit in the near term through its affiliate is to certify that produce is chemical-free. To do that, Genetic ID will sample crops before harvesting and test them afterward for various agricultural chemicals. The service will cost about $2,400 for 12 acres or so of farmland. The company expects to win contracts from roughly 50 groups of farmers a year for this service. .....In the meantime, through a tie-up with GENETIC ID INC., Kyoto's FALCO BIOSYSTEMS LTD. is moving into the emerging field of testing and certifying whether soybeans, corn and other bulk crops have been bioengineered as well as whether food products contain GMOs. Initially, Falco Biosystems will subcontract the work to the American company. After about a year, however, it plans to start testing on its own, although the certification process is likely to be handled by a joint venture between the two firms.

For its part, FARM VERIFIED ORGANIC, INC., one of the world's leading organic certification organizations, expects a strong increase in its local business once the Ministry of Agriculture, Forestry and Fisheries implements in April new requirements for foods that are labeled organic. The Medina, North Dakota company, which operates in Japan and elsewhere overseas as INTERNATIONAL CERTIFICATION SERVICES, INC., has had a Yokohama subsidiary since 1996. Interestingly, Farm Verified Organic's standards for organic foods are stiffer than the forthcoming Japan Agricultural Standards' rules. ICS's inspections cover both farms and processing facilities.

An exchange rate of ¥105=$1.00 was used in this report.aaaaaa

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