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No. 366, March 2000

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American Companies in Japan


NONELECTRIC MACHINERY

In a deal that remedies a major international weakness of its THERMO KING CORP. subsidiary, INGERSOLL-RAND CO. acquired a 70 percent interest in ZEXEL COLD SYSTEMS K.K. from a restructuring ZEXEL CORP. Terms of the deal were not disclosed. Minneapolis-based Thermo King is the world leader in refrigeration units for trucks and trailers. It also makes these units for rail cars and ocean- going containers and makes air-conditioning units for buses, trains and urban mass transit. This description applies almost exactly to Zexel Cold Systems' business, although its strength in refrigeration units for trucks and trailers is in lower GVW vehicles while Thermo King's is in larger vehicles. The American company will use the Tokyo joint venture's distribution channels to expand its market reach in Japan, where the demand for climate-controlled vehicles is rising because of the growth in shipments of perishable foods. Zexel Cold Systems also should give Thermo King better access to other Asian markets.

FLOW INTERNATIONAL CORP. has added to its primary business of manufacturing ultrahigh-pressure water-jet cutting and cleaning systems what it calls fresher-under-pressure equipment for food treatment. This system employs ultrahigh or hydrostatic pressure to address food-safety concerns involving products with an extended shelf life. It is suitable for both liquid and solid prepackaged foods (batch-mode processing) and integrated treatment and packaging of pumpable products (in-line processing). The subsidiary of Kent, Washington-based Flow International has priced the fresher-under-pressure system at $1.3 million. It hopes to sell two or three units a year to Japanese food processors.

SHIN CATERPILLAR MITSUBISHI LTD. is targeting first-year sales of 150 units for its redesigned WS510 small wheel loader. Equipped with a 1.18-cubic-yard bucket, the new model has a hydraulic transmission to improve operability and the largest engine in its class. The WS510 lists for $77,100, including an air- conditioned cab. .....Hoping to turn overseas sales of used construction equipment into more of a money- maker, SHIN CATERPILLAR MITSUBISHI LTD. contracted with CATERPILLAR REDISTRIBUTION SERVICES INC. to handle all of its exports. The Nashville, Tennessee unit of CATERPILLAR INC. could take as many as 200 hydraulic excavators and other pieces of equipment in FY 2000, primarily for resale through Caterpillar's distributors elsewhere in Asia. If this goal is hit, the Japanese joint venture's used equipment sales should total about $22.9 million, a gain of 50 percent or so from the estimated figure for FY 1999.

A ready market exists in Japan for clean, reliable and efficient on-site power sources. That at least is one reading of the ability of CAPSTONE TURBINE CORP. to quickly sign up distributors for its 30-kilowatt Capstone MicroTurbine. In the latest deal (see Japan-U.S. Business Report No. 363, December 1999, p. 24), MEIDENSHA CORP. and SUMITOMO CORP. have teamed up to market the Woodland Hills, California manufacturer's microturbine products and to package them into combined heat and power systems. The trader will import the Capstone MicroTurbine and build a nationwide maintenance network.

Meidensha, a maker of heavy electrical equipment, will develop stationary applications for the microturbine and provide systems integration and after-sale service for its customers, which include some of Japan's biggest electric utilities. So sold are Sumitomo and Meidensha on Capstone Turbine's technology that they made a joint equity investment in the privately owned company.

NORTHWEST POWER SYSTEMS is exploring the residential market in Japan for fuel-cell systems in cooperation with trader TOKYO BOEKI LTD. and CORONA CORP., a major maker of home heating and cooling units. Two NPS prototype residential fuel-cell systems will be field-tested until the end of 2000 in a fully functional, 1,500-square-foot house built by Niigata prefecture-based Corona. The trial will determine what changes need to be made to the system to make it locally marketable. The NPS test units will generate approximately 2.5 kw of electricity. Through their heat exchangers, each system will produce another 2.5 kw that can be used for water and space heating. Bend, Oregon-based NPS, a subsidiary of IDACORP INC., says that its fuel-cell systems are powerful enough to meet the base load requirements of the typical Japanese home if batteries are used to cover peak load periods. For Tokyo Boeki, its work with NPS complements its role as the sole distributor of HONEYWELL INTERNATIONAL INC.'s microturbine power generators.

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

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