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No. 351, Decvember 1998

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Japanese Companies in the US


A $41.3 million expansion is underway at DAIKIN INDUSTRIES, LTD.'s four-year- old fluoroplastics plant in Decatur, Alabama to install capacity for tetrafluoroethylene and hexafluoropropylene. These monomers, currently imported from Japan, are used in the production of NEOFLON FEP (fluorinated ethylene-propylene) pellets. This product is well-suited for molding wire shielding. FEP demand is surging in the United States in large part because of the construction of local area networks in the business world. Through its DAIKIN AMERICA, INC. subsidiary and factories in Japan, Daikin Industries splits the global FEP market with E.I. DUPONT DE NEMOURS & CO., INC.

Ownership of IB CHEMICAL CO., a 13-year-old Bucks, Alabama manufacturer of isobutylidene diurea (IB nitrogen) controlled-release nitrogen fertilizers, has changed hands. MITSUBISHI CHEMICAL CORP. (35 percent), MITSUBISHI CORP. (15 percent) and HOECHST CELANESE CORP. (50 percent) sold the business to Canada's NU-GRO CORP. for $2 million. Mitsubishi Chemical, which developed the technology used by IBCC, has pulled out of a number of American production ventures in the last six months or so because they were unprofitable. That was not the case with IBCC. It makes money on annual revenues of $6.6 million. Instead, the hands of Japan's biggest chemical company and its top trader basically were forced by Hoechst Celanese. That multinational not only is their third partner, but its uncertainty about remaining in the fertilizer business made long-term planning difficult for Mitsubishi Chemical.

Commercial production of Aricept (donepezil hydrochloride) tablets -- a treatment for mild to moderate Alzheimer's disease -- has begun at EISAI CO., LTD.'s $40 million research and development/manufacturing complex in Research Triangle Park, North Carolina (see Japan-U.S. Business Report No. 339, December 1997, p. 2). Pending receipt of manufacturing approval from the Food and Drug Administration, PFIZER INC. had been making Aricept for U.S. sale. The plant has a single-shift capacity to produce 300 million Aricept tablets a year. Eisai plans to use the facility for other products, including Pariet (rabeprazole sodium), a proton pump inhibitor for peptic ulcers that is undergoing FDA review (see Japan-U.S. Business Report No. 340, January 1998, p. 2). More than 80 people currently are employed at the plant.

SANWA KAGAKU KENKYUSHO CO., LTD. and a Swiss firm provided a total of $10.5 million in financing for TELIK, INC. The money will enable the South San Francisco, California biopharmaceutical discovery firm to fund its R&D programs into 2000. The Nagoya firm is a longtime Telik investor and collaborator. In addition to using Telik's TRAP chemoinformatics drug discovery technology to identify promising active compounds against Sanwa's targets in several therapeutic areas, they are working on an insulin sensitizer for the treatment of noninsulin-dependent diabetes mellitus (Type II diabetes). The next step is to identify a clinical candidate. TAIHO PHARMACEUTICAL CO., LTD. and TEIJIN LTD. also have partnerships with Telik.

An exchange rate of ¥121=$1.00 was used in this report.

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