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No. 366, March 2000

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Japanese Companies in the US


Although assembly operations began less than a year ago, YUSHIN AMERICA, INC. believes that strong U.S. demand for its parts-unloading robots for plastic injection-molding machines will enable it to boost production to 100-plus units this year from 70 in 1999. The Cranston, Rhode Island company, in which YUSHIN PRECISION EQUIPMENT CO., LTD. has a 60 percent stake, also will add a series of three- or four-axis, all-servo-drive robots for injection molders with clamping forces from 500 tons to 3,000 tons. The robots assembled to date have been designed to work with smaller injection molders. Yushin America generated sales of $26.6 million in the year through March 1999 from the wide range of automation equipment it supplies for the plastics industry. In FY 2004, it hopes to double this figure.

The decision by BELOIT CORP., a big manufacturer of paper-making equipment, to go out of business is creating both problems and opportunities for MITSUBISHI HEAVY INDUSTRIES, LTD. On the negative side, MHI is likely to take a loss on the 20 percent share of the Beloit, Wisconsin-headquartered company that it has owned since 1986. On the plus side, after paying Beloit $22 million for certain paper-making machinery patents and intellectual property rights, the Japanese manufacturer is free to expand its own business. In particular, MHI will be able to sell equipment in regions outside Asia and Oceania, something that it could not do under its contract with Beloit. By combining its own expertise with its former partner's technology and trying to win over Beloit's customer base, MHI believes that it can lift sales of paper-making machinery to $458.7 million in FY 2000 — more than triple the projected total for FY 1999.

Fifteen years after BARUDAN CO., LTD., a manufacturer of embroidery and monogram machines, acquired a U.S. production base now located in Solon, Ohio, the company has gone to direct sales in North America. BARUDAN AMERICA, INC. bought the Greensboro, North Carolina-based sales and technical support divisions of its U.S. distributor, MACPHERSON MEISTERGRAM, INC., from WILLCOX AND GIBBS CO. Earlier, it had purchased its Canadian distributor from the same Carteret, New Jersey company. Barudan America makes single-head to 20-head Barudan embroidery machines and produces monogram machines under the Meistergram brand at its factory outside Cleveland.

Like other Japanese makers of construction equipment, YANMAR DIESEL ENGINE CO., LTD. hopes to make up for lagging sales at home by doing more business in the United States. It has formed a direct sales unit at YANMAR DIESEL AMERICA CORP. in Buffalo Grove, Illinois, where its U.S. diesel engine and tractor parts marketing operations are located. The main product is the ViO-70 compact hydraulic excavator. The 7-ton version of the ViO line with its distinctive rounded body, the machine is designed for confined urban work settings since the cabin, bonnet and boom bracket all stay within the track width when swiveling. The bucket capacity of the ViO-70 is 0.37 cubic yards; it can dig to depths of almost 14 feet. The marketing staff is directing most of its ViO-70 efforts to construction equipment rental companies.

ELLIOTT CO., one of the world's largest makers of steam turbines and compressors for the petrochemical, oil-refining, oil and gas, and power-generation industries, soon will be a wholly owned EBARA CORP. subsidiary. The manufacturer of pumps and air blowers will buy out equal partner MAN AG for an undisclosed price. Since June 1998, Ebara and the German company have shared ownership of Elliott, which had sales of roughly $400 million in the year through May 1999 and employs some 2,000 people worldwide. Both previously were minority investors and licensees of the Jeannette, Pennsylvania firm's turbomachinery technology. Elliott readily admits that its 32-year relationship with Ebara has helped to strongly position the company's products in Asia. Part of the Japanese manufacturer's near-term business plan is to accelerate its commercialization of cogeneration systems using Elliott's microgas-turbine technology.

Big plant engineering contractor JGC CORP. is working with GENERAL ELECTRIC CO. on a combined- cycle (gas and steam turbine) power plant that runs off a new fuel source. The Japanese company has devised a system that uses the product from further refinement of the heavy oil residues left after the distillation of gasoline and other petrochemical products. It calculates that the proposed combined-cycle power plant will have a 50 percent fuel efficiency. While that is below the 58 percent rating of today's most efficient equipment and the 60 percent operating efficiency of GE's just-unveiled next-generation H System gas turbine, JGC says that there is a trade-off in terms of lower initial investment costs. If their collaboration succeeds, JGC and GE will market the resulting combined-cycle system to the new breed of independent power producers as well as to traditional electric utilities in Japan and elsewhere.

An exchange rate of ¥109=$1.00 was used in this report.aaaaaa

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