The ownership of one of the earliest Japanese-backed manufacturing operations in the United States is changing. TAMCO founders TOKYO STEEL MANUFACTURING CO., LTD. (25 percent) and AMERON INTERNATIONAL CORP. of Pasadena, California (50 percent) have put up for sale their interests in the Rancho Cucamonga, California manufacturer of steel reinforcing bars. In business since 1976, Tamco had 1997 sales of $139 million. The company has been profitable through the 1990s thanks to the construction boom. Tokyo Steel apparently feels that now is the time to maximize the return on its investment. It will use the sale proceeds to strengthen its operations at home. Ameron executives said that Tamco did not fit in the company's long-run plans. MITSUI & CO., LTD. will retain its 25 percent interest in the minimill.
Divergent business strategies apparently are behind the decision by SUMITOMO ELECTRIC INDUSTRIES, LTD. and PHELPS DODGE CORP. to dissolve their five international wire and cable joint ventures. SEI will take over the Phoenix, Arizona company's half interest in SPD MAGNET WIRE, INC., an Edmonton, Kentucky manufacturer of magnet copper wire that has been in operation since 1990. It also will take control of a company in Thailand. For its part, Phelps Dodge will be the sole owner of two other Thai firms and a business in Venezuela.
For the second time in two months, a Japanese trading company has announced plans for a steel service center near the underserved U.S.-Mexico border. Following in the footsteps of MITSUI & CO., LTD., which will build a processing facility in San Diego, California (see Japan-U.S. Business Report No. 345, June 1998, p. 4), NICHIMEN CORP. expects to construct an $11 million plant in McAllen, Texas to slit and cut steel coils for electronics and automotive manufacturers operating in the area. NITEK MCALLEN, INC. should be in business next January. When capacity is reached in a few years, Nichimen projects the company will have annual revenues of $5 million. Since the fall of 1995, the trader has run a steel service center in Jackson, Mississippi, NITEK METAL SERVICE, INC., with an American firm as a minority investor.
Automotive parts manufacturer YUHARA MANUFACTURING CO., LTD. reportedly is scouting factory sites in the Houston area that it can lease in order to launch production of pipe connector parts for engines and power steering systems. The Tochigi prefecture company will spend $714,300 or so to equip the plant, aiming for start-up in the spring of 2000 with a work force of about 10 people. In time, annual sales are expected to reach $1.8 million. For slightly more than a year, a wholly owned Yuhara Manufacturing subsidiary has been marketing imported pipe connector parts.
An exchange rate of ¥140=$1.00 was used in this report.