Roughly $7.8 billion in cash will transform JAPAN TOBACCO INC. into the third-largest global tobacco company with seven of the world's top 20 cigarette brands in its portfolio. This is the price that Japan's dominant cigarette manufacturer is paying for the non-U.S. tobacco operations of RJR NABISCO HOLDINGS CORP. The struggling business, which includes such top-selling brands as Camel, Winston and Salem, trails PHILIP MORRIS INC. and BRITISH AMERICAN TOBACCO PLC internationally. It will continue to do so even with the integration of JT's own overseas operations, concentrated in East Asia with some presence in the United States, with those of R.J. REYNOLDS INTERNATIONAL B.V. That 15,000- employee company markets in more than 70 countries and has 22 factories in 18 nations. It had sales of $3.1 billion in 1998 versus $30 billion in FY 1997 for JT, the maker of Mild Seven, the second most popular cigarette brand worldwide. The deal is a complement to RJR Nabisco Holdings' plan to separate its domestic tobacco business from its food business. JT is financing the $7.8 billion purchase, the largest ever made by a Japanese company, with $2.8 billion of its own money, supplemented by a $5 billion global syndicated loan led by CITIBANK N.A. It also is assuming $200 million in R.J. Reynolds International debt. Analysts had expected the buyer of the international operations to pay between $6 billion and $6.6 billion.
The first grand piano built by YAMAHA CORP. at its Thomaston, Georgia plant will come off the line in June. Keyboards, strings and other interior parts for the French Provincial-style GH1FP will be imported from Japan, but the cherry wood for the exterior veneer will be sourced in the United States. YAMAHA MUSIC MANUFACTURING, INC., which has been in business since 1980, turns out about 50 different models of pianos, including various finishes, sizes and wood veneers. It expects to build 300 grand pianos in the first year of production of this model.
Through its Portland, Oregon subsidiary, outdoor products manufacturer SNOW PEAK CO., LTD. has arranged to sell some 60 products through RECREATIONAL EQUIPMENT, INC., the Seattle-headquarter-ed operator of a nationwide chain of stores featuring products for the outdoors. The Niigata prefecture company believes that the REI deal will produce revenues of $833,300 in the first year and 10 times that amount after five years. In time, Snow Peak hopes that its camping gear, cookware and other products will be available at some 500 U.S. specialty stores.
The Lake Success, New York marketing subsidiary of CANON INC. has introduced special transfer paper that enables users to imprint digital artwork and photographs on such surfaces as ceramic tile, stone, wood, glass, metal, fabric and paper without all the hassles of alternative methods. With the Transfer Replication Media, the process can be as straightforward as using a copier to transfer the image to the paper and then a heat press and a laminating machine to affix it. Canon has priced the paper at $490 for a box of 50 sheets.
A $3 million contract from NUCLEAR ASSURANCE CORP. INTERNATIONAL for three containers to haul spent nuclear fuel has opened a new business in the United States for HITACHI ZOSEN CORP. The containers, designed for trailer transport, will each have a 1,100-pound capacity. They are scheduled for delivery to Norcross, Georgia-based NAC International in April 2000. Hitachi Zosen hopes to parlay this order into more business with NAC International and other companies that transport nuclear waste.
MIECO INC. and GATX TERMINALS CORP. have formed a partnership that has taken over the petroleum blending and distribution business of the wholly owned MARUBENI CORP. company. GATX PRODUCT SERVICES LP, headquartered in Houston, provides such services as throughput, blending, supply and exchanges to refiners, with a geographic focus east of the Rocky Mountains. GATX Product Services began operations with approximately 8 million barrels of storage in Houston, Baton Rouge, Louisiana, New York and the Midwest. The company expects to handle roughly 140 million barrels of petroleum products a year. The other businesses of Long Beach, California-based MIECO, established in 1984, are a petroleum trading operation focused on the West Coast and Pacific Rim markets, a terminal operation in Mississippi and a petroleum products marketing operation in New Jersey.
After three straight years of red ink, TOIN CORP. has decided to pull the plug in March 2000 on its U.S. operations. The company has had a plant in Livingston, Alabama since 1986 that prints labels and cartons. Its sales unit is located in Atlanta. Toin blamed the decision on the loss of orders from fellow Japanese companies operating in the United States. The company hopes to sell the business; if unsuccessful, it will be liquidated.
As part of a corporate restructuring plan, gas and water meter maker KIMMON MANUFACTURING CO., LTD. will liquidate its Fort Worth, Texas subsidiary by March 2000 as well as close a German manufacturing facility and four of its 10 plants in Japan. KIMMON QUARTZ LTD., opened in 1990, makes quartz glassware for the semiconductor industry.
An exchange rate of ¥120=$1.00 was used in this report.