Japan-US Business Report LogoJapan-U.S. Business Report

No. 327, December 1996

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Japanese Companies in the US

American Companies in Japan


Japanese Companies in the United States


CHEMICALS

Hoping to capitalize on the expansion in automotive parts production by Japanese-affiliated plants in this country, NIPPON ZEON CO., LTD. has mapped out plans to boost by half over the next two years or so its U.S. capacity to make nitrile-butadiene rubber. As a first step, the synthetic rubber maker is in the process of raising NBR capacity at its main Louisville, Kentucky facility to about 27,500 tons a year, a 19 percent increase. The company also plans an initial rise of a third to roughly 11,000 tons in the annual output of its Hattiesburg, Mississippi factory. Production of nitrile rubber hydride at that plant will be increased as well.

By yearend HITACHI CHEMICAL CO., LTD. expects to complete the purchase of MAST IMMUNOSYSTEMS INC., a manufacturer of agents for diagnosing allergies and related equipment. The Japanese firm has owned 28 percent of the Mountain View, California-based supplier since 1989 and already sells at home Mast Immunosystems products for detecting allergic reactions to pollen, mites and other irritants. It expects to pay about $26.8 million for the remaining 72 percent of Mast Immunosystems, which employs 175 people and had 1995 sales of roughly $22.3 million.

Like a number of other top-tier Japanese pharmaceutical houses, SHIONOGI & CO., LTD. is building a new drug discovery center in the United States. The suburban Boston, Massachusetts-based facility, the company's first offshore research operation, will open early next year. Its initial staff of 30 researchers will work in areas outside of antibiotics, the mainstay of Shionogi's current sales, trying to find, for example, drugs to treat immune-system problems and various types of cancers.

EISAI CO., LTD. has won Food and Drug Administration approval for a medicine that improves the cognitive ability and the functioning of people with Alzheimer's disease. Aricept is only the second such product to receive the go-ahead for U.S. marketing. Neither it nor WARNER-LAMBERT CO.'s Cognex slows Alzheimer's deadly progression. Instead, by inhibiting the breakdown of the neurotransmitter acetylcholine, both provide mild to moderate relief of the disease's symptoms. The rate of improvement is equivalent for the two drugs. In clinical trials, however, Aricept caused fewer or less serious side effects than Cognex. Eisai's U.S. subsidiary and PFIZER INC. will comarket the drug, which should be available by yearend.

The FDA has approved for marketing a topical antifungal developed by KAKEN PHARMACEUTICAL CO., LTD. The product, a 1 percent butenafine hydrochloride cream, will be sold as Mentax by PENEDERM INC. of Foster City, California, which has exclusive Western Hemisphere rights to the active compound in the cream for the treatment of skin and nail fungus. SCHERING-PLOUGH CORP. will copromote Mentax in the United States.

KIRIN BREWERY CO., LTD. and CALGENE, INC. have cross-licensed selected genes for commercial uses. Kirin made its carotenoid biosynthesis genes available to the Davis, California-based biotechnology company, which expects to use the genes to develop for the North American market fresh produce and rapeseed varieties with improved nutritional properties. In turn, Calgene granted to Kirin rights to commercialize tomato varieties in Japan, South Korea and Taiwan using the FLAVR SAVR gene. Each will pay the other royalties on sales of products developed with the licensed technology.

ISOTEC, INC. of Miamisburg, Ohio, a NIPPON SANSO CORP. subsidiary that is the world's leading commercial producer of stable isotopes, has been cleared by the FDA to make an isotopically labeled compound used in a breath test to detect the H. pylori bacteria recently linked to peptic ulcers. The test is said to be the first noninvasive tool for diagnosing this bacterial infection in the stomach. Isotec's product is urea labeled with highly enriched carbon-13. People infected with the H. pylori bacteria have elevated carbon-13 levels.

An exchange rate of ¥112=$1.00 was used in this report.

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COMPUTERS AND PERIPHERALS

NEC CORP. and CASIO COMPUTER CO., LTD. are shipping to computer stores and other retail outlets handheld personal computers running MICROSOFT CORP.'s new Windows CE operating system, which provides automatic synchronization of data to a Windows 95 desktop or laptop computer (see Japan-U.S. Business Report No. 325, October 1996, p. 3). Like a HI-TACHI, LTD. device set to debut in the U.S. market early next year, NEC's MobilePro and Casio's Cassiopeia come bundled with scaled-down versions of Microsoft's Excel, Word and personal information manager software. Each can store 2 megabytes of data and is priced around $500. Casio is supplying its HPC to COMPAQ COMPUTER CORP. for sale as the Compaq PC Companion. HEWLETT-PACKARD CO. is among the other companies with Windows CE products.

SEIKO EPSON CORP. has earmarked about $13.4 million to increase capacity at its Hillsboro, Oregon printer plant. The facility, in operation since 1986, now can turn out 150,000 ink-jet printers a month. After the expansion is completed it will have a monthly capacity of 250,000 machines.

In late 1997 PIONEER ELECTRONIC CORP. will begin to manufacture recordable compact discs at its factory in Carson, California, which now makes laser video disks. The company expects to spend $8.9 million to launch CD-R production at a rate of 400,000 to 800,000 units a month. Like RICOH CO., LTD., MITSUI TOATSU CHEMICALS, INC. and TDK CORP., which already are making CD-Rs here or plan to do so, Pioneer hopes to capitalize on strong demand for high-capacity storage media. At some unspecified time it also will add digital video disks to the Carson plant's product line, joining such rivals as VICTOR CO. OF JAPAN, LTD., MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. and NIPPON COLUMBIA CO., LTD. (see Japan-U.S. Business Report No. 325, October 1996, p. 4).

FUJITSU, LTD. will move into the international systems maintenance market next year, providing service in the United States mainly through affiliate AMDAHL CORP., a Sunnyvale, California-based manufacturer of IBM-compatible mainframes, and STREAM INTERNATIONAL INC., a software retailer headquartered in New York City. The companies will work on hardware and software products not only from Fujitsu but also from other suppliers, including INTERNATIONAL BUSINESS MACHINES CORP.

An exchange rate of ¥112=$1.00 was used in this report.

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CONSTRUCTION AND REAL ESTATE

HITACHI, LTD. has an informal alliance with engineering giant BECHTEL GROUP INC. on the design and the construction of power plants. The two companies believe that the arrangement will position them better to win contracts for nuclear generating plants in the People's Republic of China and elsewhere in Asia because it enables them to share design data and source materials jointly. Hitachi faces a dearth of business at home since no power plants, nuclear or thermal, are scheduled to be built until after the year 2000 at the earliest.

An exchange rate of ¥112=$1.00 was used in this report.

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ELECTRIC MACHINERY

Electrical connector maker JAE OREGON INC., a subsidiary of JAPAN AVIATION ELECTRONICS INDUSTRY, LTD., has added 60 percent more space at its Tualatin, Oregon factory. The expansion was triggered by rising demand for connectors in the automotive electronics and the multimedia markets.

Starting early next year, TAKITA RESEARCH & DEVELOPMENT CO., LTD. will market ceramic inverters through an equally owned company it formed this past fall with FUTURE SOLUTIONS INC. of Irvine, California. The partners expect to sell between $3.6 million and $4.5 million worth of inverters a month. The ceramic product is said to be more reliable and safer than its coil counterpart.

UNITED SOLAR SYSTEMS CORP. of Troy, Michigan, in which CANON INC. and ENERGY CONVERSION DEVICES, INC. are equal 49.95 percent owners, is manufacturing a solar-powered battery for pumping underground water. The Japanese firm developed the energy-efficient amorphous silicon battery that is the core of the product. It will be marketed to solar power generating firms here and in Europe.

An exchange rate of ¥112=$1.00 was used in this report.

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ENERGY RESOURCES

Trader NICHIMEN CORP. is moving into the southern California electricity generation market. It is retrofitting 85 wind-powered systems in Palm Springs purchased from SEAWEST POWER SYSTEMS INC. They will have a combined generating capacity of 4,200 kilowatts. Recently formed subsidiary NICHIMEN AMERICA WIND POWER INC. in Los Angeles will sell the electricity to SOUTHERN CALIFORNIA EDISON CO. Nichimen expects to spend $7 million on the project before full operations begin next April.

An exchange rate of ¥112=$1.00 was used in this report.

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FOOD AND AGRICULTURAL PRODUCTS

The top Japanese producer of natural seasonings, ARIAKE JAPAN CO., LTD., will invest $5 million in its Harrisonburg, Virginia manufacturing subsidiary to expand capacity for both liquid and powdered seasonings. Part of the extra output will be shipped to Japan. The U.S. affiliate projects profits of $300,000 in the current calendar year on estimated sales of $7.5 million. In 1997 it expects revenues to hit $10 million because of the additional capacity.

GEKKEIKAN SAKE CO., LTD. will boost capacity 50 percent at its Folsom, California brewery in preparation for the start of sake exports to Japan. Once the expansion is completed next year the plant will be able to make almost 571,000 gallons of sake annually. The California-brewed product, which already has been test-marketed in DAIEI, INC. stores, will be priced close to domestically made sake, even though the import costs far less to produce. Gekkeikan's move is expected to prompt its larger rivals to market some of their American-brewed sake in Japan.

An exchange rate of ¥112=$1.00 was used in this report.

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METALS AND FABRICATED PRODUCTS

OREGON METAL SLITTERS INC., a Portland, Oregon steel service center owned by OKURA & CO., LTD., is buying rail-served property in the city's port on which it will build a larger plant. The facility will cut flat-rolled steel for distribution to precision fabricators and other manufacturers in the Pacific Northwest. The project is budgeted at $7 million or so.

An exchange rate of ¥112=$1.00 was used in this report.

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NONELECTRIC MACHINERY

CNC (computer numerically controlled) lathe and machining center manufacturer MAZAK CORP. has opened a national technology center adjacent to its manufacturing facility in Florence, Kentucky. The YAMAZAKI MAZAK CORP. subsidiary will use the facility to develop manufacturing solutions for its customers, such as ways to shorten lead times, reduce work in progress and increase machine utilization. The company also added production equipment at its factory so that it now can produce between 160 and 200 CNC lathes and MCs a month. The combined cost of the two projects was about $17.9 million.

WORLD ETCHING CO., LTD. of Ichinomiya, Aichi prefecture has extended its technical expertise on chemical engraving to MELCO ENGRAVING, INC. In this process a pattern or a "texture," such as a leather effect, is transferred via acid into steel molds used in plastic injection molding. The texture then can be duplicated in plastic products. The Rochester Hills, Michigan company, which says the process yields products that look and feel like leather, has exclusive rights to the technology in North and South America as well as in Europe. It plans to target sales to U.S. suppliers of automotive interior plastic parts.

An exchange rate of ¥112=$1.00 was used in this report.

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PRECISION AND MEDICAL EQUIPMENT

Under an original equipment manufacturer arrangement TECHNO MORIOKA CO., LTD. of Nagai, Yamagata prefecture will supply TOC (total organic carbon) monitors for ultrapure water systems to THORNTON ASSOCIATES, INC. The Waltham, Massachusetts company will pair the monitors with its water quality measurement equipment for sale to pharmaceutical manufacturers. Techno Morioka expects to ship 1,000 TOC monitors in the first year of the contract. In Japan the monitors cost $18,300 each.

An exchange rate of ¥112=$1.00 was used in this report.

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SEMICONDUCTORS

NEC CORP. and TEXAS INSTRUMENTS INC. will work together to develop a single-chip multifunctional microprocessor. NEC will contribute technology underlying its V series of microprocessors to the project, which is expected to last two or three years. TI brings to the collaboration its expertise in digital signal processors. The resulting product, to be made by both manufacturers, will be supplied to MATSUSHITA-KO-TOBUKI ELECTRONICS INDUSTRIES, LTD., a supplier of high-end hard disk drives to QUANTUM CORP. (see Japan-U.S. Business Report No. 326, November 1996, p. 11).

Under a pending tie-up NEC CORP. and VADEM INC. will design chips to support OEMs developing products that run MICROSOFT CORP.'s recently introduced Windows CE operating system. The prospective partners will develop a processor based on the core of the Vr4100 line of RISC (reduced instruction-set computing) microprocessors that NEC created for the Windows CE platform (see Japan-U.S. Business Report No. 325, October 1996, p. 3). The 100-megahertz part, expected to be ready for shipment at the end of 1997, will be produced by NEC using a 0.25-micron process. San Jose, California-based Vadem will be in charge of companion chips, including software drivers, and reference designs.

Silicon wafer manufacturer MITSUBISHI SILICON AMERICA CORP. (formerly Siltec Corp.) has ordered a $4.5 million automated materials handling system for its Salem, Oregon factory from PRI AUTOMATION, INC. The system -- which includes wafers stockers, an overhead monorail, machine loading robot vehicles and loading robots -- is scheduled for installation in early 1997. It will be able to load, transport and store 6-inch wafers as well as 8-inch wafers. The order is the second one that Billerica, Massachusetts-based PRI has received from the MITSUBISHI MATERIALS CORP. subsidiary in the last 18 months.

SHIBAURA ENGINEERING WORKS CO., LTD. and MITSUI & CO., LTD. have set up a company in Santa Clara, California to market Shibaura's etching equipment and provide after-sales service. Their facility contains a clean room for demonstrations and to customize the semiconductor production equipment to chip manufacturers' requirements. The joint venture, in which the trading company has a 30 percent stake, projects first-year sales of $4.5 million.

KOKUSAI ELECTRIC CO., LTD. has opened a service center in Portland, Oregon to support U.S. sales of its diffusion furnaces and other semiconductor production equipment. Another maintenance facility is to be established in Austin, Texas during the first half of 1997.

An exchange rate of ¥112=$1.00 was used in this report.

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SOFTWARE AND INFORMATION SERVICES

MITSUBISHI CORP. has invested an undisclosed amount in INTERTRUST TECHNOLOGIES CORP., which developed the general-purpose InterTrust Commerce Architecture for secure electronic commerce and digital rights management. In exchange for the capital the trader gained Japan marketing rights to the firm's programmable middleware and tools. Included is the soon-to-be-released InterTrust System Developer's Kit 1.0, the first of a series of developer's kits based on the InterTrust Commerce Architecture.

To speed the adoption of the MPEG (motion picture expert group) digital video compression and decompression standard HITACHI, LTD. has teamed up with FUTURETEL INC. and launched a MPEG site on the World Wide Web and a content server. Housed in the server is a library of video properties
stored as MPEG clips; they are available on a royalty-free basis. The partners, which first tied up last summer when Hi-tachi enlisted the Sunnyvale, California company to develop editing applications for a new integrated circuit (see Japan-U.S. Business Report No. 322, July 1996, p. 5), also are marketing new digital video editing tools. The MPEG Edit Engine ensures MPEG-1 video editing without any loss of synchronization between the sound and the visual material.

The U.S. subsidiary of DAIFUKU CO., LTD. tentatively has agreed to buy AUTO SIMULATIONS INC., a Bountiful, Utah developer of materials handling simulation and scheduling software, for about $16.1 million. ASI, which employs approximately 60 people, had revenues in the year through October 1996 of $73.2 million. Just two months earlier Daifuku's American operation bought AUTO-SOFT CORP., another Bountiful company that produces software for physical distribution systems (see Japan-U.S. Business Report No. 325, October 1996, p. 6). Daifuku makes materials handling equipment, in-factory conveyor systems and automated rack-type warehouses.

DATT JAPAN INC. has tied up with DIGITAL ARTS & SCIENCE CORP. to market its educational and entertainment CD-ROMs in the United States. The Sapporo-headquartered company plans to follow up its first release, the educational Silk Road, with a gambling game. Its Alameda, California- based partner provides data bases of images on CD-ROMs.

An exchange rate of ¥112=$1.00 was used in this report.

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TELECOMMUNICATIONS EQUIPMENT

TOSHIBA CORP. is working with CISCO SYSTEMS, INC. to define open, international standards for next-generation multilayer Internet and intranet switching. The drive for compatibility starts with the Japanese company's cell switch router technology and industry leader Cisco's tag switching protocol. The two firms plan to present their proposed specifications to the Internet Engineering Task Force sometime next year. The first products incorporating Cisco's tag switching technology already have been released (see Japan-U.S. Business Report No. 326, November 1996, p. 15). Toshiba's initial implementation of its CSR technology will appear on the market next spring.

KYUSHU MATSUSHITA ELECTRIC CO., LTD. and Menlo Park, California-based DIBA, INC., the developer of an information appliance software platform, have released a prototype of a telephone that allows users to tap into the Internet as well as send and receive electronic mail. The device, which doubles as a conventional phone, has a 3-inch x 2-inch liquid crystal display screen and built-in Internet access software. By plugging a standard computer keyboard into the back of the telephone, people without access to a PC still can browse the text portion of the Web and do e-mail. The codevelopers have not yet set an introduction date for the product, which is expected to be priced closer to a high-end telephone than to a PC.

A terminal for Internet access is on the market from JAPAN COMPUTER CORP. Through its California subsidiary the firm is trying to line up sales channels for the iBOX. It is looking particularly at ORACLE CORP. and other companies that are moving into the network computer market. Since releasing the iBOX last February, Japan Computer has sold approximately 15,000 units.

NETWORK VALUE COMPONENTS LTD., a Yokohama-headquartered importer of networking equipment, has invested about $100,000 in WIDEBAND CORP. The Independence, Missouri company recently put on the market the WideBand Gigabit LAN System, a cost-effective local area network system that is said to offer virtually unlimited bandwidth to networked PCs and data transmission speeds up to 10 times faster than Fast Ethernet. In exchange for its investment NVC gained Japanese distribution rights to WideBand system components, including PC boards and hubs.

Very high-speed digital subscriber line technology is the focus of a broad tie-up between NEC CORP. and the technology's developer, AMATI COMMUNICATIONS CORP. of San Jose, California. The two companies plan to develop VDSL components as well as VDSL interface products. Both will have the right to manufacture the resulting products, which are targeted at advanced fiber-optic systems.

Through a technology tie-up with a Lancaster, Pennsylvania company that is strong in digital signal processors OMRON CORP. plans to move into the market for modems. It and CARDINAL TECHNOLOGIES INC. will develop a modem with a data transmission speed of 33.6 kilobits per second that also can be used as an adapter for ISDN (integrated services digital network) connections. Omron expects to start marketing the new product next spring in Japan.

CASIO COMPUTER CO., LTD. is working with SKYTEL CORP. to adapt the Washington, D.C.-headquartered company's SkyTel 2-Way wireless messaging applications to its portable information devices, including the new Cassiopeia Windows CE handheld computer. As its name indicates, the SkyTel 2-Way service allows users not only to send brief text messages from their pagers to Internet e-mail addresses and other SkyTel pagers but also to respond to messages directly from their 2-Way pagers.

OKI ELECTRIC INDUSTRY CO., LTD. has made its Suwanee, Georgia cellular mobile communications equipment manufacturing operation a wholly owned unit. What now is OKI TELECOM INC. previously was part of Oki's broad-based U.S. subsidiary. OTI is Oki's lone mobile phone production company. It makes analog as well as digital cellular phones.

SHAKLEE CORP., a direct marketer of nutritional drinks, personal care products and household cleaning products that is owned by YAMANOUCHI PHARMACEUTICAL CO., LTD., will try to recruit new customers for AT&T CORP.'s long-distance service. Shaklee distributors will receive a commission for every new AT&T customer they sign up.

An exchange rate of ¥112=$1.00 was used in this report.

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TRANSPORTATION EQUIPMENT

FUJI HEAVY INDUSTRIES, LTD. is in charge of developing, testing and manufacturing the wings for a new business jet that RAYTHEON AIRCRAFT CO. has designed. The eight-passenger Hawker Horizon, a derivative of the Hawker 1000, will be powered by twin turbofan engines. It will have a range of about 3,900 miles and a maximum cruising speed of just over 600 miles. FHI expects to spend $17.9 million on the development phase. While the firm has built wings for military aircraft, the Wichita, Kansas-based Raytheon project will be its first foray into wings for commercial aircraft.

YAMAHA MOTOR CO., LTD. will add all-terrain vehicles to the product lineup of its Newnan, Georgia subsidiary, which now turns out golf carts and personal water craft. The first model to be built will be a four-wheel ATV with a 250-cubic-centimeter engine. Yamaha, which will continue to make ATVs for the North American market in Japan, expects to produce 17,000 ATVs at its Georgia plant in 1998.

Automotive interior and exterior plastic parts manufacturer IKUYO CO., LTD. is in the process of building a plant outside Knoxville, Tennessee in Blount County to supply both Japanese-affiliated vehicle makers in the United States and the U.S. Big Three. The injection molding facility is scheduled to start up in May 1997 with a staff of about 20 employees. Marketing will be handled by a recently opened subsidiary in Southfield, Michigan. It projects sales of $5.5 million in 1998 and double that figure the following year.

TRIM MASTERS INC. has announced plans for a plant in Lawrenceville, Illinois to make seats for the T100 full-size pickup truck that TOYOTA MOTOR CORP. will build in nearby Princeton, Indiana starting in the fall of 1998 (see Japan-U.S. Business Report No. 316, January 1996, pp. 4-5). Trim Masters' fifth U.S. plant also will make door panels and plastic moldings for the T100. The facility will have a payroll of about 100 people. Trim Masters is owned by ARACO CORP. (45 percent), TOYOTA TSUSHO CORP. (5 percent) and JOHNSON CONTROLS, INC. (50 percent).

AKEBONO BRAKE INDUSTRY CO., LTD. has earmarked $133.9 million for its U.S. operations over the four years beginning in 1997. About $22.3 million will be invested in a research and development center now under construction in Farmington Hills, Michigan (see Japan-U.S. Business Report No. 320, May 1996, p. 7) to expand product development and testing activities, particularly for Big Three vehicle makers. Another $66.1 million is designated for capacity expansion at AMAK BRAKE L.L.C., a Glasgow, Kentucky producer of brake pads that is partly owned by ITOCHU CORP. (see Japan-U.S. Business Report No. 321, June 1996, p. 6). Employment there is forecast to reach some 350 people from approximately 120 now. Most of the rest of the money apparently will go into Elizabethtown, Kentucky-based AMBRAKE CORP., a company equally owned by GENERAL MOTORS CORP. that turns out disc and drum brake components. Akebono Brake Industry projects its FY 1996 sales in the United States at $232.1 million. By the year 2000 it estimates that the total will be $357.1 million and that a profit will replace FY 1996's anticipated loss of $27.7 million.

A $1.1 million expansion is underway at ALPHA CORP.'s door handle and cylinder lock factory in Howell, Michigan. The investment is designed both to double cylinder lock capacity to 80,000 units a month and to boost the domestic content of the plant's output to 90 percent by performing more machining in-house. Alpha's dominant customer is NISSAN MOTOR CO., LTD.'s Smyrna, Tennessee complex, but the firm is trying to increase business with the Big Three, which now account for less than 10 percent of sales. By the year 2000 Alpha expects to spend another $5 million on production equipment.

Starting in the 1998 model year, NGK SPARK PLUG CO., LTD. will supply spark plugs for selected GENERAL MOTORS CORP. cars. Yearly volume is likely to run between 400,000 and 500,000 units. NGK's American-made spark plugs now go to Japanese transplants and into the replacement parts market, where they have a 10 percent share. The firm also expects to win a 1999-model-year contract from GM for oxygen sensors, which it makes in Irvine, California and at a West Virginia plant.

TOYOTA MOTOR CORP. will build a $15 million production testing center adjacent to its new North American manufacturing headquarters in Erlanger, Kentucky (see Japan-U.S. Business Report No. 318, March 1996, p. 7). The quality assurance laboratory will test original equipment parts from the company's growing ranks of U.S. suppliers -- work that now is done largely in Japan. Construction will start in the spring. .....TOYOTA MOTOR CORP. also expects to break ground next spring for a major expansion to its Ann Arbor, Michigan technical center. Nearly 300 people already are employed there. When the project is completed in the spring of 1998 the technical center will be able to house another 300 or so employees.

An exchange rate of ¥112=$1.00 was used in this report.

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MISCELLANEOUS

In a big expansion of its American-based professional hair-care products business SHISEIDO CO., LTD. will buy certain assets of HELENE CURTIS INC.'s salon division. Covered by the estimated purchase price of $89.3 million are sales rights, patents and inventories. Excluded from the deal are manufacturing facilities and the Helene Curtis trademark. Shiseido's Darien, Connecticut-based ZOTOS INTERNATIONAL, INC. subsidiary, a maker of permanent wave kits and other professional hair-care products, will be in charge of making and marketing the acquired line of shampoos, conditioners and other salon products. These products generated sales of about $65 million in the year through February 1996.

Pearl supplier TASAKI SHINJU CO., LTD. has a pending deal to acquire jewelry wholesaler B. D'ELIA AND SON INC. for about $4.5 million. The New York City company supplies pearls and costume jewelry to jewelry retail chains across the United States. Tasaki has been D'Elia's main supplier of pearl products for about 40 years. By taking over the wholesaler the Japanese company hopes to expand sales of its own products. With the new ownership, D'Elia's annual turnover is projected to hit $8.9 million.

Golf ball production capacity is in the process of being expanded 10 percent at BRIDGESTONE SPORTS (U.S.A.), INC. in Covington, Georgia. Through this move plus the addition of a new line of balls the wholly owned BRIDGESTONE CORP. subsidiary hopes to lift its share of the American golf ball market to between 7 and 8 percent in the near term from the current 5 percent or so. The extra capacity is expected to come on-line in the spring.

The main U.S. subsidiary of KINTETSU WORLD EXPRESS, INC. has purchased for $335,000 NATURAL FLEXIPAK SERVICES, INC., a Houston, Texas-based company that specializes in packaging nonhazardous bulk liquid products for long-haul transport. Natural Flexipak offers shippers of fruit juices, wines, edible oils, pharmaceuticals and similar bulk liquid products an alternative to road tankers and tank containers by using products called Flexitanks -- collapsible thermoplastic tanks that fit inside 20-foot-long over-the-road and ocean containers. Kintetsu plans to extend this transport technology to Asian markets. Japan is excluded because it restricts shipments in plastic bulk containers.

An exchange rate of ¥112=$1.00 was used in this report.

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American Companies in Japan


CHEMICALS

An equally held firm formed by Houston, Texas-based MERICHEM CO. and SUMITOMO CHEMICAL CO., LTD. will make mixtures of meta-cresol and para-cresol for exclusive sale to the two owners. SUMITOMO-MERICHEM CO., LTD. has consigned production to its Japanese parent's Oita prefecture plant, which has the capacity to make about 2,400 tons of cresol compounds a year. By raising the operations level at the underutilized facility the arrangement will enable Sumitomo Chemical to lower production costs. The tie-up also benefits Merichem by giving it an Asian source of supply for the plastic resin intermediates, which will include derivatives of meta-cresol and para-cresol.

This coming April NATIONAL STARCH & CHEMICAL CORP. will merge its two former local joint ventures into a new, wholly owned subsidiary. KANEBO NSC CO., LTD., which paired the Bridgewater, New Jersey- headquartered firm with KANEBO, LTD. until it was dissolved last March, manufactures adhesives, specialty resins and construction materials at an Osaka factory. Its 1996 sales are estimated at $178.6 million. The other company, located in Tokyo and previously owned with NEW OJI PAPER CO., LTD., imports and sells NSC products, including starch for industrial and food uses. It is expected to post 1996 revenues of $34.8 million. In the year 2000 sales of the merged operations are projected at $285.7 million.

PFIZER INC. has reorganized its human and veterinary drug supply system in Japan. Products that cost more to make locally than elsewhere have been replaced by imports from other Pfizer manufacturing units. That includes MiniPress, a treatment for cardiovascular problems that now is being sourced from the company's Australian subsidiary, and Filaribits, a heart worm preventative for dogs that is being brought in from China. Shifts like these have freed Pfizer to make its Aichi prefecture manufacturing operation the world source for Doramectin, a treatment for parasites that attack large animals, and Semduramicin (sold as Aviax), a remedy for the fungus disease in poultry known as coccidiosis. Pfizer, which recently spent $31.3 million to expand local production, has earmarked $84.8 million for future manufacturing-related investments in Japan.

WARNER-LAMBERT CO. has granted YAMAN-OUCHI PHARMACEUTICAL CO., LTD. sole rights to make and market in Japan a treatment for elevated cholesterol levels. Warner-Lambert's subsidiary and the big Japanese drug company are overseeing clinical testing of Atorvastistin, which currently is in Phase 2 trials in Japan. Assuming marketing approval is granted, Yamanouchi will import bulk ingredients for the cholesterol-reduction product from Warner-Lambert.

Under a revised agreement with San Mateo, California-based SCICLONE PHARMACEUTICALS INC. the local unit of SCHERING-PLOUGH CORP. has exclusive Japanese development rights to Zadaxin thymosin alpha 1, an immunomodulator being investigated as a treatment for hepatitis B. Schering-Plough's subsidiary also will explore the combination of its own Intron with Zadaxin to treat hepatitis C. The two companies plan to begin local clinical testing of Zadaxin for both indications during the first half of 1997.

Through its subsidiary BAXTER INTERNATIONAL INC. will launch during 1997 clinical trials of artificial red blood cells. The product, to be imported from the United States and Belgium, has several advantages over its natural counterpart. It is suitable for transfusions irrespective of patients' blood types. The synthesized product also cannot pass on the AIDS and the hepatitis viruses. Moreover, it can be stored for up to 10 months with no loss of oxygen-carrying capability versus just three weeks for a red blood cell concentrate.

An exchange rate of ¥112=$1.00 was used in this report.

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COMPUTERS AND PERIPHERALS

Through its subsidiary SUN MICROSYSTEMS INC. has added an entry-level model to the family of workstations built around its 64-bit UltraSparc-1 processor (see Japan-U.S. Business Report No. 324, September 1996, p. 8) that offers users supercomputer performance for just $16,500. The Ultra 1 Model 140 has a 143-megahertz UltraSparc processor, 32 megabytes of internal memory, a 1.05-gigabyte hard drive, a 17-inch display and TurboGX graphics.

HEWLETT-PACKARD JAPAN LTD. has introduced its parent's first Unix- based Internet and intranet servers. The five-model HP Domain Enterprise Server family has integrated with it HP Domain Business Suite software for a turnkey solution to Internet and intranet computing. System, network and applications management is built on HP OpenView. Included in the package is NETSCAPE COMMUNICATIONS CORP.'s Suite- Spot publishing and groupware intranet software and HP OpenMail for enterprise-class e-mail and messaging. HP Japan expects to sell 1,200 HP Domain Enterprise Servers a year. Companies that already have HP Enterprise Servers, which are part of the HP 9000 Series, can purchase the HP Domain Business Suite for $5,700.

The WorldMark 4300 symmetric multiprocessing system, the latest model in NCR CORP.'s WorldMark line of Windows NT-based enterprise servers, is available at prices from $27,100. The system now on the market can support up to four 166-megahertz or 200-megahertz Pentium Pro processors; later versions will be able to scale as many as eight Pentium Pros. The WorldMark 4300 is the first implementation of NCR's OctaSCALE architecture, which permits expansion from four to eight Pentium Pro chips simply by adding another circuit board to the same cabinet. NCR's unit is marketing the WorldMark 4300 as a midrange departmental server suitable for high-availability transactions processing, e-mail, Internet access and data mart applications. It projects sales of 500 units in the first year.

INTERGRAPH CORP.'s Tokyo subsidiary has added two models to the pair of already introduced products in the TDZ Series, a Windows NT-based line of three-dimensional graphics workstations powered by one or more 200- megahertz Pentium Pro processors (see Japan-U.S. Business Report No. 324, September 1996, p. 7). The entry-level model now is the $7,200 TDZ-200. New to the midrange is the TDZ-410. The Huntsville, Alabama company hopes to sell 10,000 machines in the TDZ Series over the course of a year. About half of those sales are expected to be generated by CSK CORP., one of Japan's biggest information services companies, under a recently signed systems integration and maintenance contract.

Joining the competition in the emerging Japanese market for Windows NT- based servers is TANDEM COMPUTERS INC., which was scheduled to debut its first entry in December. The company's main selling point is its ServerNet technology. Described as the first fully functional system area network or SAN, this technology delivers the reliability features and the scalability architecture found in Tandem's high-end products to businesses building low-cost but powerful computing systems from clustered standard components. The Cupertino, California-based firm already has provided its ServerNet technology to TOSHIBA CORP.

DATA GENERAL CORP. also is moving into the market for hardware running the Windows NT Server operating system. Its solution for achieving high availability is the AViiON line of enterprise servers, which incorporate several features that are said to reduce the likelihood of server failure and to minimize the time required for repairs if a problem does develop.

COMPAQ COMPUTER CORP. has bolstered its line of high-end ProLiant PC servers. The new ProLiant 2500 models, priced from $7,900 to $10,300, are equipped with a pair of 200-megahertz Pentium Pro processors. They offer remote diagnostics and an easy expansion path. The company also has capped off the ProLiant 5000 family with a system that features four 200-megahertz Pentium Pros and a 512-kilobyte secondary cache memory. It lists for $31,300.

Next April UNISYS CORP.'s subsidiary plans to introduce a low-cost PC- based system targeted at Japan's huge government-managed pension fund business. The smallest configuration of the NenkinWave 21 will lease for $893 a month. That price covers hardware, software (including the company's PSOC middleware for facilitating adaption to system changes) and support services. Unisys expects to lease 250 NenkinWave 21s in the three years following the system's introduction.

Separately, UNISYS CORP. has added to its AQUANTA line of desktop PCs 24 models for business use. The AQUANTA DX series ranges in price from $2,400 to $4,200. The new machines are powered by either a 120-, a 133-, a 166- or a 200-megahertz Pentium chip. The multimedia-capable systems come standard with a 650-megabyte hard drive and two serial ports. Unisys forecasts sales of 90,000 units for its entire AQUANTA series.

A new design for IBM JAPAN LTD.'s Aptiva multimedia PCs has been introduced with the debut of the three models making up the Aptiva S series. The B60 and the B65 have a 166-megahertz Pentium processor and a 15-inch display or a 17-inch display, respectively. The B75, powered by a 200-megahertz Pentium, has a 17-inch screen. All three feature a speaker and a microphone built into a new media console. They come standard with a 33.6-kilobit-per-second modem, Internet telephone software (a first in Japan) and Super Office 96 with Personal Notes from LOTUS DEVELOPMENT CORP. The mail-order price of the B60 is $3,400, while the B75 through the same channel costs $4,000.

With the release of the Aptiva H series, IBM JAPAN LTD. has brought to the market for the first time voice-recognition software that requires no special hardware. Using IBM VoiceType Dictation 3.0 for Windows 95, the machines recognize operational commands given in Japanese; the English- language version of this program is not yet in circulation. The Aptiva H machines cost between $3,200 and $4,100. IBM Japan plans to sell the voice-recognition software separately.

APPLE COMPUTER INC.'s subsidiary put on the market in early December four new servers targeted at the intranet market that run the 7.5.3 version of Kanji Talk 7.5, the latest release of the Macintosh operating system. The high-end model, the Workgroup Server 8550/200, is based on a 200-megahertz PowerPC 604e processor; it has intranet construction software preinstalled. The pricing of the servers is open but is expected to range from $1,800 up to $5,400. .....The local operation of APPLE COMPUTER INC. also has announced its server expansion path. The next generation of products will be based on the common hardware reference platform developed by Apple, INTERNATIONAL BUSINESS MACHINES CORP. and MOTOROLA INC. and will run both Windows NT and the Macintosh operating systems; these models should be introduced in the spring. The following generation of hardware, scheduled for release in the second half of 1997, will run AIX, the IBM version of Unix, as well as Windows NT and Macintosh.

Meanwhile, spokespeople for APPLE COMPUTER INC. have disclosed that the company is working with INTERNATIONAL BUSINESS MACHINES CORP. to develop for the Japanese market a portable computer that is smaller and lighter than the standard notebook system. The product should be in stores
early in 1997. If the system succeeds in Japan, Apple likely will introduce it in other markets.

The Tokyo subsidiary of EMC CORP. has put on the market the Symmetrix Network File Storage system. SNFS is a dedicated, network-attached storage system designed to eliminate the performance bottlenecks that occur with high demand on common file servers. It is based on the Hopkinton, Massachusetts-based firm's Symmetrix Integrated Cached Disk Array storage system. This technology provides a file server that not only is scalable (72 gigabytes to 1.2 terabytes in a single cabinet) but also is highly available and easily managed. The smallest SNFS configuration starts from $167,100 without the disk part. The accompanying software costs anywhere from $40,200 to double that amount.

Through its recently formed subsidiary in Tokyo MICRONET TECHNOLOGY, INC. has introduced the platform-independent DataDock 7000, a high-end RAID (redundant arrays of independent disks) storage system that transfers large data or graphics files between workstations at rates of up to 40 megabytes per second. The DataDock 7000 uses swappable modules so that users can configure the system in a variety of ways. The Irvine, California company claims that its system, which has several data-loss prevention features, is the only RAID device with three redundant power supplies and fans. MicroNet distributors and systems integrators will target sales to digital imaging and digital video editing businesses as well as to corporate networks. First-year sales are estimated at $8.9 million.

QUANTUM CORP.'s subsidiary has signed three more distributors to promote sales of the Milpitas, California parent's hard disk drives to individual users and corporate customers. Until now Quantum's products have been sold mainly on an OEM basis to PC manufacturers. The new marketing partners -- the local affiliate of Fremont, California-based SYNNEX INFORMATION TECHNOLOGY INC. as well as NISSHO ELECTRONICS CORP. and TOMEN ELECTRONICS CORP. -- will try to develop sales in specific markets, such as the medical field. With this expanded effort, Quantum hopes to raise sales by 20 percent in the current fiscal year versus a 10 percent or so gain in FY 1995.

Sunnyvale, California-headquartered JTS CORP. has moved into the Japanese hard disk drive market by tapping SYNNEX INFORMATION TECHNOLOGY INC.'s subsidiary to distribute its 3-inch drives to PC manufacturers. Three capacities are available: 1 gigabyte (the N1080- 2AR), 1.4 gigabytes (the N1440-3AR) and 1.6 gigabytes (the N1620-3AR).

IBM JAPAN LTD. is sampling three 2.5-inch hard disk drives suitable for notebook PCs and such mobile computing devices as portable information terminals. These products have capacities of 1.6 gigabytes, 2.1 gigabytes and 3 gigabytes. The firm also is shipping samples of a like number of 3.5- inch hard disk drives. These span a pair of 4.3-gigabyte products, including one for servers and workstations and the other for desktop PCs, plus a 6.4-gigabyte model for desktop PCs. OEM sample prices for the six drives, all of which use a magnetic resonance head, run from $536 to $893.

Meanwhile, IBM JAPAN LTD. is selling the 5573-02 impact printer. The $11,900 product can print on ev-ery size of paper from computer forms to labels as well as on envelopes. It also prints bar codes. The system's speed is 10 percent faster than its predecessor's.

Next summer CYCOLOR INC. plans to put on the market through PLAZA CREATE CO., LTD. a color printer for PCs that uses in place of toner a light-emitting diode that produces colors on specially coated paper with a resolution of 2,000 dots per square inch. The recently unveiled system will be priced between $179 and $223 -- about half of what conventional color printers cost.

New from HEWLETT-PACKARD JAPAN LTD. is the HP DesignJet 750C Plus full-color ink-jet plotter. Available for A-1 size paper at a price of $7,100 as well as for A-O paper, the new products are said to be the first in the industry to provide a resolution of 600 dots per square inch. At the same time HP Japan introduced the HP DesignJet 700 monochrome-color ink-jet plotter, which is 30 percent faster than its predecessor. The A-1 version costs $5,300. The company expects to sell annually a total of 20,000 units of the new models, all of which can be used with pigment inks.

The Tokyo subsidiary of POLAROID CORP. has released the high-end POLASCAN 35 Ultra scanner. The product can digitize both color and black- and-white negatives for inputting into a PC. The input speed is about 60 seconds per image. A resolution of 2,700 dots per square inch is possible. Polaroid expects to sell 2,000 POLASCAN 35 Ultras a year at a price of slightly less than $2,000 each. With the introduction of this product, the company cut the price of the existing POLASCAN 35 by 15.8 percent to just over $1,400.

ACCELGRAPHICS, INC. of El Toro, California has contracted with MEMOREX TELEX JAPAN LTD. to market its AccelPRO three-dimensional graphics accelerator boards. The TX1500, which has 12 megabytes of memory, lists for under $2,700. The 16-megabyte TX2500 costs about $3,300. The AccelPRO products give Windows NT-based PCs workstation-level scalable image processing capabilities. AccelGraphics forecasts sales of $4.5 million in the initial year of marketing.

An exchange rate of ¥112=$1.00 was used in this report.

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CONSTRUCTION AND REAL ESTATE

LINDAL CEDAR HOMES, INC. has tied up with one of its dealers, home builder BAU IWATE CO., LTD. of Kitagami, Iwate prefecture, to market in five northern prefectures the design for a four-unit, two-story, wood- frame apartment building. The Japanese company, which has its own American construction crew, already has put up models in Kitagami. All of the materials for the jointly designed apartment building are shipped as a package by Seattle, Washington-based Lindal. Including transport time, the building takes only three to four months to erect, considerably less than if traditional Japanese construction methods were used. That cost savings is a major selling point, as is the building's energy efficiency and durability.

Florida-based TREADWAY INDUSTRIES INC., which builds facilities at amusement parks, has a 30 percent stake in a Kochi prefecture- headquartered company formed to design and build theme park attractions. Its partner is PDC CORP., a designer of retail interiors that is affiliated with supermarket chain operator MYCAL CORP. The new company sees an expanding market in Japan and elsewhere in Asia for its type of work, such as the Universal Studios Japan theme park that MCA INC. plans to build in Osaka (see Japan-U.S. Business Report No. 318, March 1996, p. 10). With a staff of 30, TREADWAY INDUSTRIES JAPAN CO., LTD. projects first-year revenues of about $8.9 million.

An exchange rate of ¥112=$1.00 was used in this report.

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ELECTRIC MACHINERY

GS-EE CO., LTD. -- owned by EXIDE ELECTRONICS GROUP, INC., the world's largest dedicated supplier of uninterruptible power systems, and JAPAN STORAGE BATTERY CO., LTD. -- is marketing its Raleigh, North Carolina- based parent's OneUPS Plus. The $295 system is designed to protect PCs, workstations and point-of-sale equipment from potentially damaging electrical distortion caused by lightning or irregularities in commercially available power. Power management software, designed to work with most operating systems, provides control of the OneUPS Plus in both networked and stand-alone environments.

An exchange rate of ¥112=$1.00 was used in this report.

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FOOD AND AGRICULTURAL PRODUCTS

COCA-COLA CO., which announced plans earlier this year to have 1 million vending machines in operation across Japan by the end of 1998 (see Japan- U.S. Business Report No. 324, September 1996, p. 10), has bought for an undisclosed amount the unprofitable vending machine division of a food service subsidiary of KANEBO, LTD. The purchase will add some 26,000 units to Coca-Cola's network of 850,000 machines. About 250 employees will go to work for the giant soft drink company or one of its 17 Japanese bottlers.

Meanwhile, COCA-COLA CO.'s local unit has opened a coffee shop in Tokyo that features the firm's Georgia brand of coffee. The two-story Georgia Cafe offers seating for 45 customers on the second floor in addition to standing tables on the serving floor. Coca-Cola sees the cafe as part business, part market research.

The first of what could be 20 directly owned or franchised Dole Fruit Cafes is open for lunch and dinner in the Shibuya area of Tokyo. The restaurant, run by DOLE FOOD CO.'s subsidiary, specializes in tropical fruit-accented dishes, including pizza with mango and papaya-chicken curry. The company expects its foray into the dining business to produce revenues of $892,900 in the first year. More of the modestly priced restaurants are planned for opening starting next summer.

TGI Friday's soon could be among the American restaurant chains operating in Japan. FRIDAY'S HOSPITALITY WORLDWIDE INC. hopes to select a franchiser by next March and to have the first Friday's open sometime in 1998. Like the U.S. original, the restaurants will have both a dining area and a bar and will provide a varied, modestly priced menu. In time Dallas, Texas-based Friday's expects to have 50 Japanese locations.

An exchange rate of ¥112=$1.00 was used in this report.

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MERCHANDISING

THE HOME PLACE INC. of Coldwater, Ohio, which runs 50 home furnishings stores in the United States, has tied up with appliance and consumer electronics retailer WAKO ELECTRIC CO., LTD. to bring the Home Style store concept to Japan. The Osaka company already has opened the first Home Style in-store shop at its Kashihara, Nara prefecture location. The shop stocks about 5,000 items for the kitchen and elsewhere in the home. The merchandise is imported and costs 20 to 30 percent less than comparable locally made products. Wako Electric, which plans to have another three or four Home Style shops open in its stores by next March and more in subsequent months, sees the expanded product line as a way to bring more customers into its outlets. It expects the diversification to generate revenues of $89.3 million in 1997.

APPLEWOODS INC., a maker and marketer of toiletries, soaps, lotions and aromatherapy products for men and women, plans to open retail outlets in Japan in conjunction with one of its largest distributors there, NIHON GRANDE CHAMPAGNE CO., LTD. The Westport, Connecticut-based company says that it will have a Tokyo location open next spring. An Osaka store will follow soon after.

The first franchised CANDY EXPRESS INC. store will open in the spring in the Tokyo metropolitan area. Convenience store operator MINISTOP CO., LTD., with which the Columbia, Maryland-headquartered company tied up in late 1994, already has seven directly owned Candy Express shops. It expects to sign anywhere from 10 to 20 franchise agreements a year.

The first GAP INC. freestanding store has opened in the Shibuya section of Tokyo. It carries the full range of Gap clothing and accessories. Four in- store Gap shops, each with a GapKids area, also are in operation.

An exchange rate of ¥112=$1.00 was used in this report.

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NONELECTRIC MACHINERY

Outdoor maintenance equipment maker TORO CO. has tapped MURAYAMA MANUFACTURING CO., LTD. to supply it with several heavy-duty handheld products for marketing in North America under the Toro ProLine brand. Covered by the contract are string trimmers, brushcutters, hedge trimmers, edgers and pruners. Bloomington, Minnesota-based Toro will target sales of these products to landscape contractors.

PARKER HANNIFIN CORP., which makes a broad range of products for hydraulic, pneumatic and electromechanical applications in the machinery, automotive, aerospace and marine industries, has a campaign underway to double annual revenues in Japan to $100 million by the year 2000. The Cleveland, Ohio-headquartered company hopes to parlay the success it has had in selling to the U.S. manufacturing operations of Japanese firms to win business from their parents. Primary targets of the Japan 2000/100 program are manufacturers of machine tools, construction equipment and forklifts. One expansion avenue the company is exploring is partnerships with local firms. Parker's sales in Japan are handled by a wholly owned subsidiary and trading companies.

Another company that expects its business ties with the American manufacturing units of Japanese firms to translate into greater sales in Japan is CHIPBLASTER, INC., a supplier of high-pressure, high-volume coolant systems. The Loveland, Ohio-based producer has signed DYNEX CORP. of Nara prefecture to distribute three products in its ChipBLASTER E series. It expects to sell 20 coolant systems a month. Pricing for the standard E model runs around $17,900.

GUNNEBO JOHNSON CORP. is marketing its line of lifting tackle through distributor MARTEC K.K. of Kobe. The Tulsa, Oklahoma-based firm makes all types of mobile and overhead crane blocks, plus balls, sheaves, snatch blocks, swivels and similar products. Depending on the product, its tackle can lift anywhere from 2 tons to 23 tons. Prices range from $291 to $2,000.

SPERRY-SUN DRILLING SERVICES of Houston, Texas, part of DRESSER INDUSTRIES, INC., has awarded Asian marketing rights to its oil-drilling equipment to ISA CO., LTD. The equipment ranges in price from $44,600 to $446,400. Tokyo-based ISA is projecting first-year sales of $4.5 million.

The range of CATERPILLAR INC. products sold through SHIN CATERPILLAR MITSUBISHI LTD. continues to expand. The latest addition is the 826G landfill compactor. The $473,200 machine's chopper wheels are said to provide efficient compaction as well as excellent traction and sidehill stability. Several blades are available to match site requirements. The 826G is powered by Cat's 340-horsepower 3406C turbocharged and aftercooled diesel engine. It has a planetary power shift transmission, with two speeds forward and reverse, and full hydraulic power steering.

SOLAR TURBINES INC. of San Diego, California, a CATERPILLAR INC. company, is shipping 3,000- to 5,000-kilowatt gas turbines to YANMAR DIESEL ENGINE CO., LTD. for sale as that firm's ATSG Series. The three models being supplied will be marketed for use in cogeneration systems. They are priced at just over $1,300 per kilowatt. Yanmar expects to sell five units in 1997. It already has a firm order from the Shiga prefectural government.

Honolulu, Hawaii-based PACIFIC BASIN, INC. -- which has exclusive distribution rights to a system for continuously feeding coal into coal- fired power-generating plants -- has selected MITSUI ENGINEERING & SHIPBUILDING CO., LTD. to manufacture the atmospheric coal feeder for sale in the Asian Pacific region by itself in collaboration with ITOCHU CORP. The feeder technology, which can handle solids other than coal, was developed by STAMET, INC. of Gardena, California. Its system provides for more efficient, environmentally friendly operations. A demonstration facility has been built by the three partners at MES's Tamano Works. It will permit the testing of a wide range of coal types at a feeding rate of 10 to 100 tons per hour. MES also has the right to develop a high-pressure system for continuously feeding pulverized coal. The immediate target for this equipment is steelmaking, but it is expected to find application in the next generation of coal-fired power generation plants.

MOLTEN METAL TECHNOLOGY INC. has finalized an agreement with NKK PLANT ENGINEERING CORP. and NICHIMEN CORP. to form a company to market the Waltham, Massachusetts firm's system for processing fly ash from solid waste incinerators (see Japan-U.S. Business Report No. 318, March 1996, pp. 12-13). As previously reported, Molten Metal will own 49 percent of the joint venture. It will receive a $12.5 million licensing fee as well as a 2 percent royalty on sales. The soon-to-be-formed marketing firm will buy a minimum of 29 Cerex-CEP catalytic extraction processing systems over the first 10 years of its operation. The initial system is set to be delivered in early 1998.

An exchange rate of ¥112=$1.00 was used in this report.

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PHOTO EQUIPMENT AND COPIERS

EASTMAN KODAK CO.'s subsidiary has put on the market a sublime-type thermal transfer color proofer for color matching in the digital prepress process. The $26,600 Kodak Digital Science Desktop Color Proofer PS/J is designed for printing operations that have strict color matching requirements. The machine, which can handle A-3 size paper, offers a wide range of colors for reproduction through a novel ink system.

An exchange rate of ¥112=$1.00 was used in this report.

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PRECISION AND MEDICAL EQUIPMENT

In the spring 3D SYSTEMS CORP. will introduce through distributor INCS INC. of Kawasaki, Kanagawa prefecture the Actua 2100 concept modeler. The product enables design engineers to produce solid three-dimensional models of their concepts in a matter of hours. The Actua 2100, which is about the size of an office copier, operates as a network peripheral to computer-aided design workstations. It can turn out a model as large as 10x8x8 inches. The system, including software and modeling material, will be priced around $84,800. INCS expects to sell 20 units in the first year.

SENSAR INC. has awarded OKI ELECTRIC INDUSTRY CO., LTD. exclusive Japanese rights to its IrisIdent identity verification technology and nonexclusive rights to use this know-how in banking applications in 10 other Asian countries. The IrisIdent technology uses a camera to scan the iris of a person's eye; that reading then is compared with a digitally encoded picture on file. Oki Electric worked with the Moorestown, New Jersey firm, which is part of DAVID SARNOFF RESEARCH CENTER INC., to develop the next-generation identification system. The Japanese company will pay Sensar $41.9 million, an amount that includes licensing fees, funding for advanced technology development and minimum purchase commitments through the year 2003. Oki Electric expects to test-market the first products incorporating the IrisIdent technology during 1997's third quarter.

Through its subsidiary MTS SYSTEMS CORP. will introduce in early 1997 the TestStar IIs, a digital servohydraulic test control system for general materials and component testing. This product is part of the TestStar II line but at $62,500 is priced about a third lower than the TestStar II. The savings was achieved by replacing the TestStar II's multiple control channels with a single channel and using surface-mount technologies to reduce the size of the system. TestStar IIs, like its more complex counterpart, works in both the Windows NT and the OS/2 environment. The Eden Prairie, Minnesota company projects annual Japan sales of the TestStar IIs at $1.8 million.

East Hartford, Connecticut-based SCAN-OPTICS INC. has reported another big order for its scanning and optical character recognition systems. Although the customer's name was not disclosed, it presumably is the Japan Social Insurance Medical Fee Payment Fund, which already has installed or has on order numerous Scan-Optics systems for processing insurance claims. The latest contract, valued at $20 million, covers 35 systems. They will be shipped in 1997.

HEWLETT-PACKARD JAPAN LTD. has named a medical systems subsidiary of NEC CORP. as the exclusive distributor in Japan of a low-cost ultrasonic diagnostic system. Although pricing is not yet firm, it is expected to be between $89,300 and $133,900. The NEC affiliate, which to date only has marketed its own products, plans to target sales to hospitals with 100 to 300 beds. It anticipates sales of 100 units in the initial year of marketing and double that figure in the third year.

An exchange rate of ¥112=$1.00 was used in this report.

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SEMICONDUCTORS

In a move that occurred last summer but only recently was disclosed TOSHIBA CORP. sold back to its partner its interest in a company formed in 1989 with MOTOROLA INC. to broaden marketing of the latter's semiconductors. Toshiba owned 49.95 percent of NIPPON MOTOROLA MICRO ELECTRONICS CORP., with the balance held by NIPPON MOTOROLA LTD. NIMMEC, which has become a sales channel for Nippon Motorola, had revenues of $89.3 million in 1995. Motorola's other business relationships with Toshiba, including joint production in Japan, are unaffected by the end of the marketing venture.

SANDISK CORP. and MATSUSHITA ELECTRONIC CORP., partners since 1990 on flash memories, have developed a technology that doubles the capacity of flash storage products and cuts their prices. Their Double Density Flash technology, also known as multistate or multilevel flash technology, was achieved by marrying SanDisk's proprietary flash memory cell and design know-how with MEC's 0.5-micron CMOS (complementary metal-oxide semiconductor) process expertise. It enables the storage of two bits of data in each flash cell instead of the previously standard one bit while increasing chip size by just 10 percent or so. The first implementation of the Double Density Flash technology is a 64-megabit flash chip. MEC, which supplies all of its flash products to its Sunnyvale, California-based partner, already is shipping the 64-megabit part to SanDisk. That firm plans to sample in the first quarter of 1997 a 300-megabyte Type III flash storage PC ATA card, a 150-megabyte Type II flash storage PC ATA card and a 20-megabyte CompactFlash card.

Separately, SANDISK CORP.'s drive to establish its CompactFlash technology as the worldwide industry standard for small removable storage devices in such products as digital cameras, personal digital assistants and cellular telephones received a boost when HITACHI, LTD. introduced a family of CompactFlash storage cards with capacities ranging from 2 megabytes to 15 megabytes. In addition to promoting CompactFlash, the two firms will supply selected products to each other on an OEM basis. For starters SanDisk will make for Hitachi 2-megabyte and 4-megabyte flash storage cards since the Japanese firm's technology is geared toward high-capacity requirements.

TEXAS INSTRUMENTS INC.'s subsidiary has launched volume production of a signal transmitter (SN75LVDS81) and a signal receiver (SN75LVDS82). These parts send information from video display processors to flat panel displays. Purchased in quantities of 1,000 units, each chip is priced at $6.25.

ANALOG DEVICES, INC. will put on the market what it says is the first wavelet-based video compression chip. The ADV601 Video Codec is designed for the PC video capture and editing market. Its chief selling point is the ability to store a larger volume of compressed images on hard disk drives for desktop digital editing than competing editable compression techniques and to do this using affordable capture hardware. For instance, the ADV601 can store 25 minutes of VHS-quality video in just 1 gigabyte of disk space. The part will be priced at $35 in quantities of 10,000 units.

The local marketing arm of ROCKWELL INTERNATIONAL CORP. is sampling Rockwell Semiconductor Systems division's WaveArtist products, a line of PC audio devices that bring high-quality audio effects, including 16-bit stereo and three-dimensional sound, to Windows 3.1x, 95 and NT environments. The WaveArtist chips also can be combined with Rockwell's 33.6-kilobit-per-second facsimile/modem devices for integrated audio/telephony capabilities. Examples include music on hold and voice recognition, features that are hard to achieve with separate audio and modem cards.

Mountain View, California-based TRIDENT MICROSYSTEMS, INC. has tapped TOKYO ELECTRON LTD. and TAKACHIHO CO., LTD. to market products that incorporate a technology that promises to cut DVD audio and video decoding or playback costs by up to 90 percent in next-generation multimedia PC systems. Trident's approach is known as THAMA, short for Hardware-Assisted MPEG-2/AC-3 decoder Architecture. The key to the cost reduction is the integration of motion compensation into the core graphics engine.

The TOSHIBA CORP. subsidiary in San Jose, California that owns the former Vertex Semiconductor Corp. has granted to M.C.M. JAPAN LTD. exclusive distribution rights to the VNI2001 chipset for data switching over Ethernet and Fast Ethernet local area networks. The basic chipset is priced at $266 when 1,000 or more units are purchased. Sales of the product, which will be targeted at network equipment manufacturers, are expected to start early next year.

A chipset for GPS (global position system) navigation products developed by SIRF TECHNOLOGY, INC. of Sunnyvale, California is being sold exclusively by BUSSAN MICRO ELECTRONICS CORP., a MITSUI & CO., LTD. subsidiary. The SiRFstar chipset combines the GRF1, a complete front-end frequency converter for GPS receivers, and the GSP1, the digital signal processing component, with SiRF Technology's GSW1 modular software, which runs on a variety of microprocessors and operating systems. Bussan Micro is projecting sales of $1.8 million in the first year.

APPLIED MATERIALS, INC., the world leader in semiconductor production equipment, has introduced through its subsidiary an integrated CVD/PVD (chemical and physical vapor deposition) system. The Liner TxZ Centura, designed for the metallization of devices with 0.35-micron and under line widths, combines a CVD titanium nitride chamber with a PVD titanium chamber on a Centura platform. It enables chip producers to deposit sequential layers of Ti and CVD TiN without worrying about the growth of unwanted oxide between processing steps. A typical configuration of the Liner TxZ Centura -- one Preclean II chamber, one Coherent Ti chamber and two CVD TxZ TiN chambers -- is priced between $2.7 million and $3.1 million.

The line of HP 9490 mixed-signal testers has been expanded with the addition of an option for testing integrated cellular and integrated wireless communications chips. The HP RF9490 can be used in production testing and wafer probing of chips with integrated RF (radio frequency), IF (intermediary frequency) and mixed-signal functions. HEWLETT-PACKARD JAPAN LTD. has priced the HP RF9490 at $446,400. It expects to sell 20 of them annually.

TESSERA INC. of San Jose, California has licensed its Micro Ball Grid Array chip-scale package to MITSUI HIGH-TEC, INC. The maker of leadframes said that it chose this technology because it gave the firm a wider variety of packaging choices for smaller, faster chips while providing superior electrical and thermal characteristics at competitive prices. Mitsui High- tec will start to make Micro BGA packages in 1997.

An exchange rate of ¥112=$1.00 was used in this report.

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SOFTWARE AND INFORMATION SERVICES

One of Japan's top Internet service providers has teamed up with several big American and Japanese companies to meet the growing demand for corporate intranets. INTERNET INITIATIVE JAPAN INC. provided 30 percent of the new venture's capital, while ITOCHU CORP. contributed 10 percent. HEWLETT-PACKARD JAPAN LTD., SILICON GRAPHICS INC. and SUN MICROSYSTEMS INC. each chipped in 5 percent. IIJ TECHNOLOGY CO., LTD. will design and build for business clients Internet/intranet systems over LANs and WANs (wide area networks). It also will source the required hardware and provide maintenance. In FY 1999 the firm expects revenues to top $178.6 million.

For the first time OPEN MARKET, INC. of Cambridge, Massachusetts has licensed its Internet access management package to a Japanese firm. MITSUBISHI ELECTRIC INFORMATION NETWORK BY DIGITAL will use OM- Axcess for its strategic push into the intranet market. The program centrally manages authentication and authorization of end users to access distributed Internet applications. The Mitsubishi Group member also will act as a systems integrator and a reseller of the software to affiliated companies and outside businesses. MIND's initial sale out of what it expects to be 20 over two years was to MITSUBISHI ELECTRIC CORP., which will deploy OM-Axcess to build a virtual private network.

COMPUSERVE CORP. is in the process of shutting down its family-oriented Internet service provider operation in Japan and elsewhere around the world. The Columbus, Ohio-headquartered company spent a year and $70 million to develop and launch the service. After a splashy debut in March 1996, however, WOW managed to attract fewer than 100,000 subscribers worldwide despite features aimed at family users, such as the ability to block access to certain Web sites.

Colorado-based RWI INTERACTIVE INFORMATION SERVICES CO. has tapped DIAMOND, INC. to market its Internet-based information and sales system. The Tokyo-based publisher hopes to sign up 10,000 companies for World Access Network Direct, which allows even small firms to find and buy or advertise and sell products and services around the world. The basic fee for the WAND buyer-seller matching service is $1,300-plus. About 300,000 American and European firms already participate in WAND, which is similar to the service offered by TRADE'EX ELECTRONIC COMMERCE SYSTEMS, INC. (see Japan-U.S. Business Report No. 320, May 1996, p. 14).

LOTUS DEVELOPMENT CORP. and SOFTBANK CORP. jointly are offering a new Internet service to Japanese households that eventually could be used to conduct electronic commerce. With Lotus' Notes groupware as the core software, Softbank and three other local companies are providing content, including educational and gourmet cooking information. To build a customer base the information now is offered free of charge, but the partners hope eventually to entice users to shop via the Internet using the highly interactive and secure Lotus software.

Internet-based software for electronic data interchange from PREMENOS CORP. is being marketed by YOKOGAWA DIGITAL COMPUTER CORP. The Concord, California firm's Tempra package supports the EDIFACT and the ASC X.12 standards. It also provides security with RSA DATA SECURITY, INC.'s RC4 encryption module. The Unix version of the software is priced at $13,400, while the Windows counterpart costs $820. YDC also will offer systems integration services. It expects EDI to become a core business.

Two software companies trying to promote long-distance telecommunications via the Internet are moving into the Japanese market. INTERLINEAR TECHNOLOGY, INC. of Alameda, California is working to localize its STARPhone Corporate Dialtone Server and NETBox personal Internet gateway. NETBox is expected to be available in the spring at a price somewhere between $270 and $360. Meanwhile, VOCALTEC INC. of Northvale, New Jersey planned to introduce in December a Japanese version of its Internet Phone.

FUTURE LABS INC., part of QUARTERDECK CORP., is marketing its TalkShow Internet videoconferencing software through KUNI RESEARCH INTERNATIONAL K.K. of Osaka. The $270 program, which is being sold in Japanese as Remote Meeting, runs under both the Windows family of operating systems and the Macintosh OS. Kuni Research expects to sell 10,000 copies a year.

Through it subsidiary MICROSOFT CORP. now offers the latest version of its Web-page design and Web-site management software, FrontPage 97. Besides native Japanese input and output, the $310 FrontPage 97J gives users a full suite of design tools plus many maintenance and Web-server features, such as time-stamp WebBots.

EASTMAN KODAK CO. also is after the business of local Web-page designers who want to create English-language versions of their Japanese-language home pages. The company's subsidiary is bundling its Kozaiku Web Designer program with Kozaiku Transfer ver1.0, an English- Japanese translation software, for the price of $3,100. The set is available in Windows 95/NT and Macintosh versions.

Ease of use and sophisticated three-dimensional graphics are the selling points that ASYMETRIX CORP. and distributor TRANS COSMOS INC. hope will attract customers to the Bellevue, Washington-based firm's WebPublisher home page design software and 3D F/X 2.0 graphics and animation package. The $115 Web-page package and the $140 3-D effects program, although aimed at nontechnical users, produce sophisticated final products.

SUN MICROSYSTEMS INC. has licensed its Java language to APLIX, INC. Hoping to ride the wave of popular Japanese interest in the Internet, the Tokyo-based firm plans to create browser software for home information appliance/network computer-type products. Among Aplix's expected projects are browser software for video game machines from SEGA ENTERPRISES, LTD., Internet televisions from SANYO ELECTRIC CO., LTD. and multimedia players from TAITO CO., LTD.

Targeting the rapidly growing local market for LAN and remote-access security, ASSURENET PATHWAYS, INC. has tapped NISSIN ELECTRIC CO., LTD. to distribute its Defender Security Server software. Using the Mountain View, California firm's Software SecureNet Keys and a personal identification number, the DSS server generates unique passwords and demands a match from a DSS client seeking access, regardless of network technology, services or type of physical connection. DSS supports Windows NT and Novell NetWare networks and Windows 95/NT and Macintosh clients. The server software is priced between $1,300 and $5,200, while a 10-user client software package is in the $510 to $625 range. Nissin Electric hopes to sell 100 copies.

SECURITY DYNAMICS TECHNOLOGIES, INC. has broadened the network security software line offered through NICHIMEN DATA SYSTEMS CORP. by introducing ACE/Server for Windows NT. The software gives network managers scalable authentication support, a readily learned Windows NT interface and easy integration of security and information management functions. Nichimen Data Systems, the Bedford, Massachusetts firm's distributor since February 1996, has priced the server security system at $5,800. It already sells Security Dynamics' client authentication software, SoftID; that program costs $77. Nichimen Data Systems expects to sell 300 units in the U.S. company's SecurID series over the course of a year.

The Tokyo subsidiary of RSA DATA SECURITY, INC., which was acquired last summer by SECURITY DYNAMICS TECHNOLOGIES, INC., has struck a broad agreement with NTT ELECTRONICS TECHNOLOGY CORP. to develop the Japanese market for NEL's encryption technology as well as RSA's own encryption engine. The pact could include an investment by NEL in the Redwood City, California-headquartered firm. .....Separately, RSA DATA SECURITY, INC. has licensed its S/MIME (Secure/Multipurpose Internet Mail Extensions) standard to MATSUSHITA GRAPHIC COMMUNICATION SYSTEMS, INC. for use in that firm's under-development Internet-based facsimile software. S/MIME adds security to e-mail messages through digital signatures for authentication and encryption for privacy.

LOTUS DEVELOPMENT CORP. has put on the market Notes Pocket Pager Gateway R2. The product, developed in cooperation with NTT MOBILE COMMUNICATIONS NETWORK INC., allows Notes users to send messages to pagers from within the groupware. Value-added resellers of Notes are charging $1,700 for the gateway software. NTT DoCoMo has not decided whether it will offer special pager rates for Notes-gateway users.

Tokyo-based BUSINESS SYSTEMS SERVICE CORP. will sell BMC SOFTWARE, INC.'s products in Japan, mirroring BMC's assistance to BSS's Mountain View, California-based subsidiary (see Japan-U.S. Business Report No. 326, November 1996, p. 6). The Houston, Texas company's local operation has been selling the 3.1 version of the Patrol automated network management and monitoring system since August, but it hopes that Patrol's sales will rise with BSS's help.

Reflecting the broad business arrangement between DIGITAL EQUIPMENT CORP. and COMPUTER ASSOCIATES INTERNATIONAL, INC., DEC's Japanese subsidiary and ACA CO., LTD. (a joint venture of CA and ASSIST CO., LTD.) have agreed to work together to promote their parents' client-server products. Covered by the relationship are DEC's POLYCENTER management package and CA's CA-Unicenter security package. The DEC affiliate expects sales of client-server products to hit $4.5 million in 1997, while ACA projects its sales of the same software at $31.3 million next year.

INTEL CORP.'s subsidiary is offering two localized maintenance programs for customers with servers running any version of the Windows operating system. LANDesk Workgroup Manager 1.2J, which is priced at $4,400 per 10-node license, offers monitoring, remote access and management tools. LANDesk Virus Protector 1.7J guards against harmful computer programs. It lists for $615 per server.

IBM JAPAN LTD. is giving free copies of its Navigator v1.3 systems configuration software to its distributors to help them tailor IBM hardware to customers' software. Navigator can recommend the best combinations from 3,500 hardware-software configurations stored in its data base.

PEOPLESOFT, INC. has established a subsidiary in Tokyo to meet the strong demand by large Japanese corporations for enterprise resource planning solutions. The Pleasanton, California firm plans to introduce a Japanese version of its latest software suite, PeopleSoft 6, in the first half of 1997. The package handles accounting, materials management, distribution, manufacturing and human resources tasks. PeopleSoft also provides resource-planning packages for specific industries, including financial services, health care, higher education and the public sector. PeopleSoft expects its annual Japan sales to reach $44.6 million in three years.

The Tokyo arm of EMC CORP. is offering two software products -- Symmetrix Multihost Transfer Facility and FDR Safeguard Open Storage -- in addition to the new-to-the-market Symmetrix Network File Storage system. The programs, which retail for $40,200 to $80,400, provide enterprisewide information access and storage in all data formats on a shared storage system.

San Jose, California-based PYRAMID TECHNOLOGY CORP. and MATSUSHITA COMPUTER SYSTEM CO., LTD. have teamed up to provide under the name of Smart Warehousing data warehousing consulting, creation and maintenance to the Japanese firm's large customer base. Matsushita Computer expects Pyramid Technology's iReliant RM1000 ultraparallel data server will appeal to its clients because of the product's ability to handle data bases as large as 10 terabytes.

To keep ahead of competing products ORACLE CORP. is working with NEC CORP. on a version of the Oracle7 data base known as Oracle Parallel Server Option 7.3.2.2 for incorporation in NEC's Windows NT-based Express 5800 PC servers. While pricing has not yet been set, rollout of the NEC UX/4800 clustered systems is scheduled for March 1997.

Japan is one of the markets targeted by a global alliance between NCR CORP. and INFORMIX SOFTWARE, INC. that aims to provide high-availability transaction processing systems using industry standard INTEL CORP. microprocessors running Unix or Windows NT. The focus of the tie-up is NCR's WorldMark servers and Informix's high-performance data base products. The Japanese subsidiaries of the two partners will manage one of six centers worldwide where customers can see demonstrations of the alliance's products, test applications or benchmark specific solutions. .....Separately, INFORMIX SOFTWARE, INC.'s local affiliate plans to begin selling in early 1997 a relational data base management system for intranets. The Online Workgroup Server package for Windows NT machines is based on the Menlo Park, California firm's Universal Server, integrated with subsidiary ILLUSTRA TECHNOLOGY, INC.'s dynamic content management and application development tools.

MOTOROLA INC.'s subsidiary has targeted the rapidly expanding senior citizen population with its Emtech System 2000 medical data base for hospitals. The software automatically collects such data as body temperature and blood pressure, graphs it and makes the results available systemwide. The package is available through IBM JAPAN LTD. and other agents. A system for a 200-bed hospital costs $178,600-plus.

Seeking to meet the needs of a growing number of mobile computer users, IBM JAPAN LTD. is offering Mobile Computer Agent J1.1. That product allows users to access and search remote data bases from their Windows 95 or NT notebooks or portable data devices over ordinary telephone lines. Pricing ranges from $140 for an individual user to $1,800 for a company license.

CHEYENNE SOFTWARE INC.'s subsidiary is offering Japanese users of ORACLE CORP. data base products a more convenient way to manage backups. Database Agent for Oracle Server J1.01 can perform backups without taking the data base off-line as well as do unattended backups. The $875 program is an alternative to ARCserve for Windows NT J2.01, the normal Oracle backup software.

After signing a marketing agreement last May, Osaka-based FORTUNE HILL INC. will begin selling in mid-January the first product from partner FRACTAL DESIGN CORP. The Japanese-language version of the Scotts Valley, California firm's Expression illustration package will cost $700.

EASTMAN KODAK CO.'s unit has debuted a local version of the Photo Cinema Producer multimedia presentation program. The $4,500 application lets users create photo CD-based presentations with full color and sound plus still and moving pictures.

PULSE ENTERTAINMENT CORP. has formed a company in Tokyo with TRANS COSMOS INC. and an individual Japanese investor to develop next- generation game software. The venture, in which the Santa Monica, California company has a 50 percent stake, will draw on its U.S. parent's three-dimensional authoring tools. It also will localize Pulse Entertainment's existing products.

MICROSOFT CORP.'s subsidiary has brought out a new version of an add-on for the Windows 95 operating system that converts inputted phonetic Japanese (kana) into Japanese characters (kanji). IME97, priced at $34, employs state-of-the-art natural language processing to yield much
greater speed and accuracy at kana/kanji conversion.

Seeking a share of the Japanese market for optical character recognition software, U.S. market leader CAERE CORP. has tied up with CANON INC. to market the codeveloped OmniPage Pro 6.0J. The Japanese partner provided the core OCR technology and application, while the Los Gatos, California company supplied enhancements borrowed from its OmniPage Pro OCR products. The resulting software uses several OCR algorithms to yield both quick and accurate text scanning. The Windows version retails for $390. A Macintosh version is promised in the near future.

Through its subsidiary COGNEX CORP. of Needham, Massachusetts has brought out a new release of its Checkpoint 600/PC image processing software for factory automation applications. Release 2.5 offers improved defect detection and faster processing speeds. The firm hopes to sell 400 of the $18,200 package in the first year of marketing.

HEWLETT-PACKARD JAPAN LTD. is offering local customers the latest version of three-dimensional CAD software developed by subsidiaries of its parent company. CoCreate/SolidDesigner rev4.5 offers substantially rebuilt 3-D viewer and assembly/parts inventory and tracking modules. The package is priced at $16,100. HP Japan has a first-year sales goal of 1,000 units.

With technology and assistance from UNISYS CORP.'s subsidiary, OKUMA CORP. has combined its computer-based mold design and manufacturing system with the Blue Bell, Pennsylvania firm's well-known CADCEUS computer-aided design and manufacturing software. A standard configuration of IDMS-CD costs $142,800. Okuma hopes to sell 300 units in three years. The two firms will continue to cooperate on computer- based control and processing technologies.

As part of its diversification effort, ASAHI GLASS CO., LTD. has begun selling a CAD/CAM system for application-specific integrated circuits created by ASPEC TECHNOLOGY, INC. The Sunnyvale, California company's Design Implementation Technology system is said to be capable of reducing gate array circuit space by 40 percent. Asahi Glass projects annual sales of the software at $17.9 million or more within two to three years.

Salt Lake City, Utah-based ENGINEERING GEOMETRY SYSTEMS has tapped FCS INTERNATIONAL INC. of Yamato, Kanagawa prefecture to market EZFeatureMILL, a CAM program for job shops, in Japan and elsewhere in Asia. The $10,700 software, said to be the first such product to be available locally, operates on Windows 95 and NT systems. FCS expects to sell 200 copies in the first year of marketing.

NEC CORP. has designated MODEL TECHNOLOGY INC.'s V-System/VHDL simulator program as its VITAL-compliant, ASIC design simulator and verifier. The Beaverton, Oregon firm worked closely with NEC to customize V-System/VHDL with new features to match NEC's needs. FUJITSU, LTD. also has endorsed V-System/VHDL for ASIC sign-off support.

In January VIEWLOGIC SYSTEMS, INC.'s subsidiary will make available the latest release of the VCS Verilog HDL simulator. VCS 3.0 offers greater simulation speed while still complying fully with IEEE 1364 Verilog and OVI 1.0 standards. The package will be priced at $40,200.

WIND RIVER SYSTEMS INC. and FUJITSU, LTD. are collaborating to embed the Alameda, California firm's VxWorks real-time operating system in the Sparc Lite series of 32-bit RISC processors produced by the Japanese electronics giant. Fujitsu's first application of the multimedia processor core is printer engines, to be followed by MPEG-2 decoders for home information appliances and personal digital assistants.

LUCENT TECHNOLOGIES INC. has launched a campaign to encourage more than 50 local firms, including NIPPON TELEGRAPH AND TELEPHONE CORP., OKI ELECTRIC INDUSTRY CO., LTD. and TOSHIBA CORP., to adopt its network-based operating system, Inferno, for future home information appliances and PDAs. Lucent Technologies has distributed test versions of Inferno, hoping that Japanese electronics makers will be impressed with the OS's small size and security/authentication features. A commercial version of Inferno is expected to be shipped in early 1997.

An exchange rate of ¥112=$1.00 was used in this report.

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TELECOMMUNICATIONS EQUIPMENT

Two of the world's three biggest makers of commercial satellites have bought launch services from ROCKET SYSTEM CORP., a consortium of 73 local companies formed in mid-1990 to sign up commercial customers for Japan's first all-domestic heavy lift booster. HUGHES SPACE AND COMMUNICATIONS INTERNATIONAL, INC. booked 10 firm launches on a planned redesign of the H-II rocket. Those launches, plus an undisclosed number of options, could be worth as much as $1 billion to Rocket System over five years beginning in late 2000. During the same time frame the Space Systems/Loral unit of LORAL SPACE AND COMMUNICATIONS LTD. has reserved RSC's yet-to-be-tested H-IIA booster for 10 firm launches. The value of that contract was not disclosed. Rocket System, led by H-II vehicle integrator MITSUBISHI HEAVY INDUSTRIES, LTD., was able to win its first contracts in part because Hughes and SS/L need to line up launch services for the exceptionally large number of commercial satellites that they expect to build in the next decade or so. The decisive factor, though, was the consortium's willingness to match the historically low per- launch prices that the two firms previously were able to negotiate with other international start-up launch firms as well as with established competitors, even though RSC will have to slash its costs to make any money.

DIVICOM CORP. and VICTOR CO. OF JAPAN, LTD. have signed a wide-ranging agreement aimed at exploiting business opportunities in the fast- expanding digital broadcasting and communications field, such as digital satellite broadcasting. The Milpitas, California-based company brings to the alliance, which covers development, production, marketing and service, its expertise in digital transmission. JVC will contribute its data compression/decompression technology as well as its manufacturing know-how.

BAY NETWORKS, INC.'s recently released Bay-Stack family of stackable, integrated network products for departmental, client-server and other workgroup environments is being marketed by the Billerica, Massachusetts-based firm's subsidiary. BayStack can be configured for as few as eight users but can be expanded to support hundreds of machines in a high-performance, switched internetwork. The line includes the 12- or 24-port BayStack 10Base-T Ethernet Stackable Hub; as many as 10 of these units can be stacked to support up to 260 ports. Also available is the BayStack 100Base-T Stackable Hub for expanded bandwidth, the BayStack Ethernet Workgroup Switch, designed to enhance overall Ethernet network performance, a pair of upgraded remote access routers for wide area connectivity and the new Optivity Workgroup network management software, which is said to simplify the process of managing, configuring and troubleshooting hubs, routers, switches and other network components.

The parade of new products from CISCO SYSTEMS, INC., the world leader in internetworking solutions for intranets and the Internet, continues. At prices starting at $4,900 its subsidiary is marketing the modular Cisco 3600 series, a two-model line that is described as establishing new price/performance standards for ISDN dial access connectivity. The products, targeted at regional and branch offices and small to midsized Internet service providers, are said to eliminate the need to buy separate hardware for remote dial-up or WAN connections. New to the market, too, is the Cisco 1600 series of modular access routers for businesses connecting to the Internet or building intranets. These products are billed as providing unmatched WAN flexibility as well as end-to-end security for customers deploying time-sensitive Internet/intranet multimedia applications.

CISCO SYSTEMS, INC. also has expanded its line of cost-effective Catalyst Ethernet LAN switches. The Catalyst 1900, the smallest configuration of which is priced at $5,600, consists of a 24-port 10Base-T hub and a 100Base-T backbone. The chief selling point of the Catalyst 2820 is the option of selecting among alternative backbone technologies.

LIVINGSTON ENTERPRISES, INC. is marketing through HUCOM INC. its PortMaster 3 WAN access switch, which combines in a space-saving package a router, a communications server and modems. It is designed for ISPs that want to lock in a migration path from analog technology to advanced digital service. Pricing of the Pleasanton, California-based company's product starts at $12,300. Hucom, hoping to capitalize on the potentially big market in Japan for remote access switches, is projecting PortMaster 3 annual sales of $178.6 million.

ANCOR COMMUNICATIONS INC. has sent to distributor HUCOM INC. the first part of a $7.4 million order for switches, network interface products and network management software placed by an unnamed manufacturer that is setting up a new design and engineering facility. The full network will
consist of 100 Ancor Fibre Channel switches and 1,000 adapters. It will be backstopped by Fibre Channel network management software. The buyer will use the network for integrated product design and modeling. Minnetonka, Minnesota-based Ancor expects to complete the contract in the fall of 1997.

By yearend switch maker XYLAN CORP. planned to upgrade its Japanese office, opened in October 1995, to a full-fledged subsidiary. The Calabasas, California-headquartered company supplies its products on an OEM basis to companies like HITACHI, LTD. The new subsidiary will provide technical support to customers in Japan and elsewhere in the Asian Pacific region.

The world's largest modem maker, U.S. ROBOTICS, INC., has set up a marketing subsidiary in Tokyo (see Japan-U.S. Business Report No. 324, September 1996, p. 15). The new company was formed by buying the data communications business of INTEGRAN, INC., the Skokie, Illinois firm's distributor. U.S. Robotics owns 80 percent of the subsidiary, with the balance held by Integran. The joint venture will be in charge of marketing, product localization and support not only in Japan but across Asia, which U.S. Robotics hopes will generate half of its revenues by the year 2000.

Sunrise, Florida-based RACAL-DATACOM INC. has put on the market the SafeDial - V.34 Modem/Encryptor PC Card, designed to allow remote portable computer users to transmit data securely and easily to the corporate LAN over the public telephone network. The credit card-size product fits into a laptop or a notebook computer's Type II PC card slot; it then just needs to be connected to a dial jack. The SafeDial V.34, which operates at speeds up to 28.8 kilobits per second, is expected to be priced around $890. Racal-Datacom plans in the near future to upgrade its recently opened Tokyo office to a subsidiary to accelerate sales of its products, which are marketed on an OEM basis.

OCTEL COMMUNICATIONS CORP. has won a $25 million-plus contract for voice messaging equipment, software and services from the three digital cellular service providers that make up the Digital Phone Group, all of which are owned partially by AIRTOUCH COMMUNICATIONS INC. Over three years the Milpitas, California supplier will expand the capacity and the reliability of the voicemail services offered by the trio in metropolitan Tokyo, Nagoya, Osaka and Kyoto.

Much to the consternation of KOKUSAI DENSHIN DENWA CO., LTD. and other equally expensive domestic providers of international telephone service, one of AT&T CORP.'s subsidiaries has launched a call-back service for business customers in the metropolitan Tokyo area. Like other such services, the AT&T World Access plan takes advantage of the fact that international calling rates are much cheaper in the United States than in Japan. The charge for a three-minute call to the United States is about $2.15, which is just 55 to 70 percent of what KDD charges for the same call. Subscribers who spend more than $180 a month on international calls receive for free an auto-dialer device that expedites connections to the AT&T network by eliminating the wait for the switch to call them back. Spokespeople for AT&T, which plans to extend the World Access service to areas outside Tokyo and to individual callers, emphasize that the company is leasing local lines from NIPPON TELEGRAPH AND TELEPHONE CORP. and international capacity from KDD.

AVIRNEX COMMUNICATIONS CORP. of Los Angeles, California also has moved into the call-back business for corporate customers. It has signed up PC wholesaler CATENA CORP. to market its service, which is said to cost not only less than what KOKUSAI DENSHIN DENWA CO., LTD. charges but undercuts the new AT&T CORP. World Access plan.

An exchange rate of ¥112=$1.00 was used in this report.

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TEXTILES AND APPAREL

The Boston Traders line of casual clothing for men and women, produced by DESIGNS, INC. of Chestnut Hill, Massachusetts, will be in department stores in February through distributor CHOYA CORP. of Tokyo. Tops will cost between $44 and $62, while pants will be priced from $35 to $54. Choya, which expects to have the Boston Traders line in 33 or more stores by 1999, projects retail sales of $4.5 million in the first full year of availability and $16.1 million in 1999.

ANNA SUI CORP., the New York City company that manages the line of women's clothing sold under that brand name, has awarded exclusive Japan marketing rights to department store operator ISETAN CO., LTD. In February that company will open an in-store Anna Sui shop at its main Tokyo location and at the head HANKYU DEPARTMENT STORES, INC. store in Osaka. About 70 percent of the product line will be imported from the United States. The rest will be manufactured locally under a five-year license given to Isetan. On a wholesale basis the Anna Sui products are expected to generate first-year revenues of $4.5 million.

Starting in the spring, hand-knit bags from THE SAK of San Francisco, California will be available in 30 department stores, specialty shops and other retail outlets through MATSUZAKI CO., LTD. of Tokyo, which also manufactures bags. The Sak products, 24 in all, will be priced from $27 to $89. Retail sales are forecast at $4.5 million for the first year.

An exchange rate of ¥112=$1.00 was used in this report.

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TRANSPORTATION EQUIPMENT

GENERAL MOTORS CORP. Chevrolet Astro minivans converted into campers by STARCRAFT AUTOMOTIVE CORP. of Goshen, Indiana and neighboring TIARA MOTORCOACH CORP. will be marketed by MITSUI & CO., LTD., which hopes to capitalize on the brisk demand in Japan for recreational vehicles. The 1997 models from both van converters have a small kitchen and a dining area as well as a sleeping alcove. The campers are available with either two- or four-wheel drive, plus a choice of roof heights. Starcraft's standard two-wheel-drive model is priced at $38,100; the same version from Tiara costs $35,500. The trader expects to sell 3,000 vehicles from the two firms.

A CHRYSLER CORP. minivan converted by an Arizona company into a vehicle for transporting people with physical disabilities is being sold by MARUBENI AUTO SALES CORP. The van can carry three passengers in wheelchairs or four without. In addition to a ramp, it "kneels" for easy access and egress. The MARUBENI CORP. affiliate hopes to sell 100 units a year at prices ranging from $53,200 to $61,200.

The right-hand-drive version of FORD MOTOR CO.'s 1997 Explorer sport- utility vehicle now is in showrooms. Despite the dollar's recent strength against the yen, the Japan-tailored product is priced below its 1996 left-hand-drive predecessor. The XL model with a 4.0-liter V-6 engine and manual transmission lists for $24,900. The Limited with an automatic transmission has a $37,400 sticker price. The XLT model, expected to be the big seller, is priced in-between. Ford is targeting sales of 500 Explorers a month.

The right-hand-drive version of CHRYSLER CORP.'s 1997 Jeep Wrangler also has debuted at dealerships affiliated with the Big Three maker and at many HONDA MOTOR CO., LTD. stores. Completely redesigned for the first time in 10 years, the four-wheel-drive sport-utility vehicle has a 4.0- liter engine. The base model -- the new Jeep Wrangler Sport soft top with manual transmission -- carries a sticker price of $21,200. That is about 20 percent less than the entry-level left-hand-drive version for 1996. The three other models available are priced up to $25,100. Chrysler has set an aggressive sales target for the Jeep Wrangler: more than 2,000 units in 1997.

An exchange rate of ¥112=$1.00 was used in this report.

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MISCELLANEOUS

Next June PPG-CI CO., LTD., a flat glass marketing firm formed in mid- 1990 by PPG INDUSTRIES INC. (51 percent) and ITOCHU CORP., plans to start making insulated glass for homes. The partners will lease a plant in the Tokyo metropolitan area and spend somewhere between $1.8 million and $2.2 million to set up production lines capable of making about 1.4 million square feet of double-pane glass a year. The market for double- pane or double-glazed glass is much smaller in Japan than in the United States but is expanding fairly quickly. PPG-CI also expects to form a glass-cutting division to tailor products to customers' specifications.

A ceramic-reinforced aluminum composite developed by LANXIDE CORP. of Newark, Delaware will be used by a company recently formed by three Japanese investors to manufacture automotive brake rotors and calipers that are 60 percent lighter than comparable products made from conventional cast iron. NIHON CEMENT CO., LTD., AKEBONO BRAKE INDUSTRY CO., LTD. and KANEMATSU CORP. are the partners in the new Tokyo-based venture. It expects to be in operation in the spring of 1998.

Wood-based fireproof doors made by WEYER- HAEUSER CO. will be distributed by MITSUI & CO., LTD. starting in January. The doors are designed mainly for use in hotels, stores and other commercial facilities. They are expected to be priced about 20 percent below similar domestic products. Wooden fireproof doors account for just an estimated 1 percent of all fireproof doors now shipped in Japan. The Weyerhaeuser products are the first building materials for commercial facilities to receive Ministry of Construction import approval based on certification tests conducted by a foreign inspection organization.

COMSTAR INTERNATIONAL INC. is supplying its Special Burn fuel additive on an OEM basis to a subsidiary of OSAKA NISSAN MOTOR CO., LTD. Distributor L.V.R. CO., LTD. of Osaka acted as the intermediary in the transaction. The additive is available at 51 Osaka Nissan dealerships. Comstar expects shipments to be valued at about $4.5 million a year.

JOHNSON & JOHNSON's subsidiary is in the process of reducing the number of stores carrying its RoC line of cosmetics to 1,000 from 1,300. In an effort to promote the brand's image as well as boost sales the company has designated 250 of the outlets as key to its marketing efforts. Cosmetics counters stocking the full range of RoC products will be built in these stores, which are located in such metropolitan areas as Tokyo and Osaka. The selected retailers also will receive extra marketing support and have available cosmetics advisers. Wholesalers will handle marketing support for the other 750 stores, where a more limited selection of products will be sold on a self-serve basis. In the spring J&J additionally will start selling RoC products by catalog.

GILLETTE CO. has launched a campaign to raise sales of its Waterman and Parker lines of writing instruments through department stores. About 400 such outlets now carry one or both lines, with 70 percent of them handling Parker products and 50 percent selling high-end Waterman pens and mechanical pencils. Gillette wants to raise these ratios to between 70 and 80 percent in 1998. As part of its drive, the company will offer product seminars for wholesalers since distributors generally are the ones that send people to visit stores.

Toy and game giant HASBRO, INC. plans a major expansion of the products it sells in Japan. By the year 2000 it expects to have on the market roughly 1,300 products versus 300-plus now. Some of the additional items will be designed specifically for the Japanese market. One new focus will be PC game software, including a Japanese-language version of the Monopoly board game. To support this effort, which is projected to produce annual revenues of $89.3 million by the end of the decade, Hasbro's subsidiary will increase staffing to about 100 people from the present 70 or so.

The Tokyo subsidiary of Vashon, Washington-based K2 CORP. is in the midst of a three-month ski board exchange program, designed to encourage customers to trade in their boards for new models. The campaign's targets are the Scorcher and the Magic4, both of which have suggested retail prices of $850.

Menlo Park, California-based STANFORD RESEARCH INTERNATIONAL has formed a specialized consulting subsidiary in Tokyo to advise business and government on such areas as ways to improve management, gain research efficiencies and optimize production. The group's expected staff of 30 can draw on SRI's extensive data base of findings, drawn from its own work as well as from other U.S. research institutions.

The Tokyo subsidiary of DUN & BRADSTREET, INC. is reorganizing its operations in response to the restructuring of the Murry Hill, New Jersey parent restructuring. The seven affiliated D&B companies in Japan will become three organizations. Among the affected businesses are: Dun & Bradstreet Information Services, a supplier of business-to-business credit and marketing information; the debt rating agency Moody's Investors Service; market researcher Gartner Group; and audience tracker ACNielsen.

An exchange rate of ¥112=$1.00 was used in this report.

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