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

No. 346, July 1998

Issue Index

Japanese Companies in the US


CHEMICALS

The world's largest trader of ethylene dichloride, MITSUI & CO., LTD., will have its own U.S. source of supply in the early part of 2000. The trading company has formed a 49 percent/51 percent joint venture with the Vulcan Chemicals group of VULCAN MATERIALS CO. to expand that company's EDC capacity in Geismar, Louisiana to 270,000 tons a year after acquiring existing EDC production facilities. Mitsui will buy all the complex's EDC output. This product is a key raw material for the manufacture of vinyl and polyvinyl chloride. The partners also will build a second chlor-alkali plant at the Geismar site. It will be able to turn out approximately 210,000 tons of chlorine and 230,000 tons of caustic soda a year. Birmingham, Alabama-based Vulcan Chemicals will market all of the new facility's caustic soda. Most of the chlorine will be delivered by pipeline to nearby customers. They will return anhydrous hydrogen chloride for use as a feedstock in the expanded EDC facility. Construction work will begin this fall, with production expected to start in the first quarter of 2000. The joint venture is projecting sales of $150 million that year.

Japan's top manufacturer of nylon resins and compounds for the plastics industry and one of the world's leading independent compounders of thermoplastics and rubber have formed an equally owned company to serve major international compounded nylon products markets. Through the joint venture, UBE INDUSTRIES, LTD. and Cleveland-headquartered M.A. HANNA CO. will manufacture and sell nylon 6, nylon 6/6 and nylon 12 plastic compounds in North America, Europe and the People's Republic of China. The North American operation will be run by UBE-HANNA COMPOUNDING CO., LLC. Similar entities will be established in Europe and China. All three will compound Ube-manufactured nylon resins, tailoring the products to customers' requirements for strength and heat resistance. Nylon 6 and nylon 6/6 compounds will be marketed to Japanese manufacturers in North America and Europe, while the nylon 12 products will be targeted at a broader range of markets. The partners project annual sales of $15 million for the three joint ventures combined.

The second capacity expansion has been completed at FORTRON INDUSTRIES CO., a Wilmington, North Carolina manufacturer of polyphenylene sulfide polymer equally owned by KUREHA CHEMICAL INDUSTRY CO., LTD. and an affiliate of HOECHST CELANESE CORP. When the plant opened in 1994, it could make about 4,000 tons of Fortron PPS resins a year. Annual capacity was boosted to roughly 5,000 tons in 1996. The latest expansion, which cost approximately $8 million, lifted yearly capacity to 6,000 tons or so. Fortron PPS is a second-generation, linear PPS that is said to offer significant cost and performance benefits over conventional, branched PPS. It is known for its resistance to extremely high temperatures and virtually all solvents. Fortron Industries uses Kureha Chemical's proprietary PPS manufacturing technology and Hoechst Celanese's compounding expertise.

Capacity also is being increased at NISSEKI CHEMICAL TEXAS INC. The Pasadena, Texas company, operational since mid-1994, makes a super aromatic solvent used in carbonless paper and condenser insulator oil. Parent NIPPON PETROCHEMICALS CO., LTD. is spending about $3.6 million to install additional equipment to raise top annual output to 16,500 tons from 9,900 tons. Higher demand for SAS for insulating oil use from such customers as GENERAL ELECTRIC CO. and ABB INC. is said to be behind the move.

NIPPON ZEON CO., LTD. licensed its manufacturing technology for styrene-butadiene rubber to DOW CHEMICAL CO. The Midland, Michigan company will employ the process at a plant in Germany scheduled to be operational in mid-2000. As needed, Dow will supplement Nippon Zeon's own output of the high-technology synthetic rubber for tires and other applications. Used in tires, styrene-butadiene rubber lowers vehicle fuel consumption while yielding a product that is more durable. Nippon Zeon never before has licensed its styrene-butadiene rubber technology, but the company decided that the deal with Dow would allow it to supply customers in Europe without having to absorb the cost of setting up a production base there.

Two competitors in the container coatings market are now collaborators. The polymer chemical business of TOYO INK MANUFACTURING CO., LTD., which is strong in Japan and Southeast Asia in conventional interior/exterior coatings and inks for beverage, food and specialty cans, is working with the Dexter Packaging Coating unit of DEXTER CORP. to offer a complete range of coatings to canmakers. The Waukegan, Illinois-based American partner is a global supplier of coatings for beverage can interiors and closures and for food and specialty cans. It has manufacturing facilities in the United States, Latin America, Europe, Singapore and Japan. The tie-up will give customers around the world access to both companies' technology. The partners are projecting sales on the order of $285.7 million a year.

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Production of vitamin E will start next year at EISAI CO., LTD.'s recently completed plant in Pasadena, Texas. The big pharmaceutical company spent more than $35 million to build and equip the highly automated facility, which has the capacity to make more than 1,600 tons of vitamin E a year. This output will replace supplies imported from Japan. Eisai recently opened an integrated research and development/manufacturing complex in Research Triangle Park, North Carolina (see Japan-U.S. Business Report No. 339, December 1997, p. 2). It plans to build a new drug development research park in Andover, Massachusetts, where it now has a drug discovery research operation and a pharmaceutical process development facility (see Japan-U.S. Business Report No. 340, January 1998, p. 2).

Just days after FUJISAWA PHARMACEUTICAL CO., LTD. sold the never-profitable generic drug business of its Deerfield, Illinois subsidiary to an affiliate of AMERICAN BIOSCIENCE, INC. (see Japan-U.S. Business Report No. 344, May 1998, p. 2), the major drug company bought $10 million worth of the Santa Monica, California firm's preferred stock. ABS is working on the development of cancer-fighting agents using a microencapsulation technology that reduces particles to the size of molecules. Fujisawa Pharmaceutical is interested in applying ABS's technology to the development of its own products. The two companies actually have a link that predates the sale of the generic drug business. Since last year, ABS has been working on new formulations of Fujisawa Pharmaceutical's Prograf immunosuppressant (see Japan- U.S. Business Report No. 341, February 1998, p. 2).

The Food and Drug Administration cleared ASTRA MERCK INC. to market Atacand (candesartan cilexetil) for once-a-day treatment of hypertension. The drug was discovered by TAKEDA CHEMICAL INDUSTRIES, LTD. and codeveloped as TCV-116 by Japan's top pharmaceutical company and Sweden's ASTRA AB. Astra Merck, a Wayne, Pennsylvania company equally owned by Astra and MERCK & CO., INC., has exclusive U.S. marketing rights to Atacand. It belongs to a group of antihypertensive medications known as angiotensin II receptor blockers, which are the first new class of antihypertensive agents in the United States in more than a decade.

A promising compound discovered by JAPAN TOBACCO INC. for the treatment of both the underlying cause of noninsulin-dependent diabetes mellitus (Type II diabetes) and the symptoms has been licensed to PHARMACIA & UPJOHN, INC. JTT-501 belongs to a novel class of products called insulin sensitizers. It is in Phase II development. P&U has the right to develop JTT-501, an oral therapy, and to market it worldwide outside of Japan and South Korea. The Kalamazoo, Michigan firm will make an initial payment of $6 million to JTI as well as milestone and royalty payments.

Comfortably swallow a tablet without water? That is the promise of WOWTAB, a quick- dissolving, without-water tablet technology patented by the Yamanouchi Shaklee Pharma Research Center in Palo Alto, California (see Japan-U.S. Business Report No. 339, December 1997, p. 2). The division of San Francisco's SHAKLEE CORP., itself owned by YAMANOUCHI PHARMACEUTICAL CO., LTD., licensed the drug delivery system to JOHNSON & JOHNSON-MERCK CONSUMER PRODUCTS CO. for use in the development and commercialization of an over-the-counter product. Like its affiliate, Yamanouchi Pharmaceutical plans to make development of drug delivery systems a key business strategy.

Japanese pharmaceutical manufacturers interested in conducting clinical trials and other tests abroad in an effort to accelerate the new drug development process will have another option later next year. In May 1999, SHIN NIPPON BIOMEDICAL LABORATORIES LTD. will build a $5 million laboratory in Seattle to perform animal testing and clinical trials on new drugs. The Kagoshima prefecture-based company hopes to work on 40 pending therapies in the first year, generating revenues of $5 million. The research center will have a staff of 28 initially, including 20 or so Americans. SNBL has done work in Japan for about 300 drug companies, including 10 American pharmaceutical houses.

An exchange rate of ¥140=$1.00 was used in this report.
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