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No. 355, April 1999

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American Companies in Japan


BRISTOL-MYERS SQUIBB CO. has assigned its Tokyo research center greater responsibility for developing the company's personal-care business not only in Japan but elsewhere in Asia as well. The R&D facility already has adapted Clairol Herbal Essences shampoo and conditioner for the Japanese market. It now is working on body washes and facial cleansing products. Moreover, BMS's local research center has modified a body lotion for Asian marketing, starting in Thailand.

In a switch in strategy, the Warner Advanced Media Operations unit of TIME WARNER INC., which handles the entertainment giant's DVD (digital video disc) manufacturing, has outsourced the supply of DVD software titles for the Japanese market to ADVANCED MEDIA CORP. The Tokushima prefecture company, which specializes in DVD content, will launch volume production in June after two months of trial operations at a plant it built to fill the contract from Olyphant, Pennsylvania-based WAMO. AMC expects to turn out 4 million DVDs, mostly with movies, in 1999 and 36 million in 2003.

Home builders in Japan have a new option in door facings, the CraftMaster line of door designs from MASONITE CORP. Its molded door facings are made from 1/8-inch-thick high-density fiberboard molded under intense heat and pressure into a variety of designs. The Chicago-based company has named SEIKEN CORP. as its representative. Masonite also has tapped SANYO ELECTRIC CO., LTD. as the first of what it hopes will be five or six distributors. If it can line up the desired distribution channels, the wholly owned INTERNATIONAL PAPER CO. unit believes that sales of CraftMaster molded door facings could jump to $25 million in 2003 from a projected $2.5 million in 1999.

Three years after it gave FURUKAWA TECHNO MATERIAL CO., LTD. exclusive rights to distribute its Phos-Chek WD 881 fire-extinguishing agent, the Ontario, California fire safety business of SOLUTIA INC. expects the Fire Defense Agency of the Ministry of Home Affairs to approve the product for marketing any day now. Phos-Chek WD 881 is a foam-forming water additive designed for use on fires in such everyday combustible materials as wood, cloth, paper, rubber and many plastics. Since the foam excelled at extinguishing fires during testing, Kanagawa prefecture-based Furukawa Techno expects sales of Phos-Chek WD 881 to develop quickly into a $25 million annual business.

Looking for ways however small to improve its shaky sales position in Japan, the subsidiary of flat glass manufacturer GUARDIAN INDUSTRIES CORP. will start recycling the pallets used to transport glass. The company, which mainly sells glass made at a Guardian plant in Thailand, expects this move to cut distribution costs by roughly 10 percent while, at the same time, saving retailers the expense of disposing of the pallets. Beginning this summer, the company will pick up empty pallets from retailers at no charge and return them to Thailand. Guardian's marketing arm also is talking about introducing a new type of pallet that is less expensive to ship and easier for retailers to store.

A new membership-based shopping service is coming to Japan, thanks to a tie-up between the subsidiaries of E4L, INC. (formerly National Media Corp.), the king of infomercials, and CENDANT CORP. Through its own infomercials and telemarketing affiliates, E4L'S QUANTUM INTERNATIONAL JAPAN CO., LTD. unit will market the catalog-based shopping service, while CENDANT JAPAN CO., LTD. will provide the products and handle customer relations. People will be able to order most of the products without joining the service, but they will not receive the guaranteed low prices that members get. Los Angeles-headquartered E4L also says that it is committed to developing an Internet-based shopping service for Japan.

MARRIOTT INTERNATIONAL, INC. will provide its expertise in hotel management to the JR Tokai Hotels unit of CENTRAL JAPAN RAILWAY CO., which in May 2000 will open a 53-story, 800-room hotel with an attached 51-story office tower in Nagoya. JR Tokai Hotels currently operates two hotels, but both are small compared with the one being built as part of the new Nagoya railway station. Marriott will share the considerable knowledge it has gained from managing a varied list of lodging brands in the United States and abroad, with particular emphasis on hotel layout, guest management and employee training.

Corporate restructuring in Japan is fast making career transition consulting a growth business. RIGHT MANAGEMENT CONSULTANTS, INC., which specializes in these services, wants to get in at an early stage. The Philadelphia company has an agreement in principle to acquire a 20 percent interest in WAY STATION, INC. The first Japanese firm set up specifically to help people who have lost their jobs prepare for new positions, it has offices in Tokyo, Nagoya, Osaka and Fukuoka. Right Management expects the deal to be finalized in June.

Corporate restructuring also will increase the demand for executive recruitment services. At least that is what A.T. KEARNEY INC. believes. The big Chicago-based international management consulting firm is putting together a team that will place senior executives in positions in such fields as high technology industry and finance.

With the government attempting to rein in fast-increasing health-care costs, managed care is expected to develop into another growth business. Major accounting and consulting firm KPMG PEAT MARWICK LLP reportedly will move into this field this summer. Along with CENTURY AUDIT CORP., two of its subsidiaries will advise hospitals and operators of corporate health-insurance plans on tests and procedures that are efficacious but also cost-reducing. The information on which the advice will be based will be drawn from the experience of Minneapolis-based UNITEDHEALTH GROUP, which has compiled data bases of effective treatments for a variety of medical problems.

IMRGLOBAL CORP., a Clearwater, Florida-based international provider of information technology services, paid approximately $51 million to acquire FUSION SYSTEMS JAPAN CO., LTD. A business and technology consulting company located in Tokyo, it has a division focused on the capital markets businesses in Japan and in the Asian Pacific, a division that offers IT consulting services to companies in Japan and elsewhere in Asia and a division that provides voice and data infrastructure solutions. Fusion, founded in 1992, had revenues of $12 million or so in 1998. The acquisition marks IMRglobal's direct entry into the world's second-largest market for IT services.

An exchange rate of ¥120=$1.00 was used in this report.aaaaaa

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