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No. 351, December 1998

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Japanese Companies in the US


MEGATOOL, INC., a Buena Park, California maker of carbide drills for printed circuit boards, has another expansion underway. The wholly owned UNION TOOL CO. subsidiary expects to complete a $5.8 million second plant in Buena Park in the spring. At full operation in late 1999, it will give Megatool, which has been in business since 1982, the capacity to make 1.9 million drills a month compared with a yearend 1998 output of 1.5 million units. The firm's estimated sales in the year through November 1998 were $119 million, up a projected 22 percent from the previous fiscal year, while pretax profits were forecast 30 percent higher.

Through its Hanover Park, Illinois marketing subsidiary, NITTO KOHKI CO., LTD., Japan's top manufacturer of fluid coupling equipment, has opened a sales office in Columbus, Ohio in an attempt to win more business from Japanese- affiliated automotive and other producers in Ohio, Kentucky, Tennessee and West Virginia. The company's unique one-touch fluid couplers, sold under the CUPLA name, not only do away with conventional thread-type couplings or flanges and the fluid leakages and hose kinking they can cause but also allow water, oil, gas and air hoses to be quickly and easily connected and disconnected.

In a partial offset to its shrinking business at home, FUJI HEAVY INDUSTRIES, LTD. struck a deal with DEERE & CO. to supply it with lawn and garden equipment on an OEM basis starting in January. FHI expects to ship 35,000 lawn mowers and other products to the world's top agricultural equipment maker in 1999 and 50,000 in 2000. The lawn mowers will be sold under Deere's Green Mower brand. Joint product development is a possibility if the OEM arrangement works out.

TANAKA KOGYO CO., LTD. is shipping its innovative PureFire engine for handheld power equipment to the United States. Available in displacements of 26 cubic centimeters and 40cc, the engine is the first two-stroke certified to meet the tough emissions standards that will take effect in California in 2000. The company also has incorporated the 40cc PureFire version in a pair of Tanaka- brand grass trimmers/brush cutters that are sold along with other Tanaka outdoor power equipment products by INTERNATIONAL SALES & MARKETING, INC. of Kent, Washington. Tanaka also has a subsidiary in the same place.

At a cost of about $2 million, NIIGATA ENGINEERING CO., LTD. is building a new campus in Rolling Meadows, Illinois for its vertical machining center operations that will allow its subsidiary to focus more on turnkey systems. Like the existing facility in the same town, the complex will house offices, training rooms, a showroom, a parts warehouse and space for customizing machines with various peripherals. However, it also will have room to build transfer lines or manufacturing cells that integrate Niigata's machining centers with robots and conveyors. The new facility will open in the summer of 1999. With its expanded capabilities, NIIGATA MACHINERY (USA) CO., INC. expects sales of $53.7 million in the 1999 business year versus $31.4 million in the comparable 1997 period.

TAKAMATSU MACHINERY CO., LTD. of Ishikawa prefecture, a manufacturer of CNC (computer numerically controlled) precision lathes, is in the process of tripling to 12 the number of distributors it uses in the United States. It is interested in expanding in areas where automotive parts makers are located in the Midwest and the Southeast. Takamatsu Machinery also will dispatch marketing specialists to this country in the spring to backstop current and future distributors. The firm's CNC lathes include servo turret and linear turret models as well as a pair of two-spindle machines.

To help achieve its goal of winning 10 percent of the U.S. market for midrange truck-mounted cranes (see Japan-U.S. Business Report No. 347, August 1998, p. 5), FURUKAWA UNIC CORP. has introduced the UNIC UR-1504. It has a top lifting capacity of 30,000 pounds and, with an optional jib installed, can reach a height of 115.1 feet above ground level. The key marketing point, however, is that these capabilities are possible with the UNIC UR-1504 mounted on a 26,000-pound GVW (gross vehicle weight) truck rather than the previously required 33,000-pound-and-up truck.

With exports of hydraulic equipment to Southeast Asia in a slump, KAWASAKI HEAVY INDUSTRIES, LTD. and TOKIMEC INC. are doing the groundwork to start or expand sales of these products in the United States and Europe. KHI is putting together a hydraulic valve marketing team at KAWASAKI MOTORS CORP., U.S.A. in Irvine, California in preparation for the launch of sales in 1999. For its part, Tokimec plans to end a technical tie-up with VICKERS, INC. and set up within 1999 a hydraulic equipment division at its California subsidiary. Between American and European sales, KHI hopes to turn hydraulic valves into an $8.4 million annual business in three years, while Tokimec is forecasting revenues of $41.3 million in FY 2000.

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

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