MARUBENI CORP. will be a minority participant in the world's first commercial facility for producing ethanol from organic wastes. The project is spearheaded by BC INTERNATIONAL CORP. of Dedham, Massachusetts, which will apply its proprietary biotechnology expertise to convert biomass wastes, such as agricultural residues, municipal waste and forest thinnings, into ethanol for use as a transportation fuel at prices expected to be competitive for the first time with fossil fuels. The BC International plant will be located in Jennings, Louisiana at the site of a former petroleum refinery and grain-to-ethanol facility. The structure will be retrofitted over 18 months at a cost of more than $90 million. Once the switchover is finished, the facility will have the capacity to manufacture 20 million gallons of ethanol a year. Marubeni's interest in the project stems in part from the possibility of transferring to Southeast Asia the experience it gains in transforming biomass wastes into biomass resources.
At an estimated cost of $24.9 million, fellow trader MITSUI & CO., LTD. acquired a minority interest in AGRIFOS L.L.C., a midsized manufacturer of phosphoric acid fertilizer that owns its own rock phosphate mines and has its main factory in Pasadena, Texas. As part of the tie-up with the New York City-head-quartered company, Mitsui will purchase about 150,000 tons of Agrifos' current annual output of some 770,000 tons for resale in Asia outside Japan and in Latin America. It also will supply ammonia and sulfuric acid to the company. METROPOLITAN LIFE INSURANCE CO. simultaneously acquired an equity stake in Agrifos on the same order as Mitsui's after helping to finance the purchase of the Pasadena facility last year. The phosphate fertilizer maker reportedly will use the money from its two new partners to expand yearly capacity to 1.1 million tons or so by 2001.
With demand for nitrogen trifluoride expanding as a substitute for greenhouse gas- producing perfluoroethane to clean semiconductors and liquid crystal displays during production, ANDERSON DEVELOPMENT CO. is in the process of doubling capacity at its nitrogen trifluoride plant to approximately 55 tons a year. The diversified Adrian, Michigan chemicals firm has been making this product since 1997 using technology transferred by parent MITSUI CHEMICALS, INC. The extra capacity, added at a cost of roughly $8.3 million, is expected to be on-line during the first quarter of 2000. Mitsui Chemicals, which acquired Anderson Development in 1988, also has the capability at its Shimo-noseki, Yamaguchi prefecture factory to make about 55 tons of nitrogen trifluoride annually.
Like other midsize Japanese drug companies, SUMITOMO PHARMACEUTICALS CO., LTD. sees a U.S. operation as key to expediting its ethical drug commercialization program for world markets. Although the location and other details concerning its planned American subsidiary still need to be finalized, executives have decided that the new unit initially will oversee clinical trials of a promising treatment for cerebral blood-vessel problems by a yet-to-be-selected contract research organization. The Sumitomo Pharmaceuticals subsidiary should be in business by next spring.
Although its mainline business is polyester and other fibers, TEIJIN LTD. planners are convinced that expansion of the company's pharmaceuticals division is critical to future growth. To facilitate realization of this strategy, Teijin plans to do more foreign clinical testing of its leading drug candidates. On its agenda for the United States is contracting with a CRO next year for Phase II clinical trials of TMX-67, a drug for hyperuricemia, which usually is associated with gout.
Continuing to invest heavily in its pharmaceuticals operations at the same time that it has made a major financial commitment to the international cigarette business (see Japan-U.S. Business Report No. 355, April 1999, p. 11), JAPAN TOBACCO INC. has agreed to collaborate with ABGENIX, INC. on clinical development of a treatment for psoriasis. ABX-IL8 is a human antibody generated by the Fremont, California biopharmaceutical company using its XenoMouse technology. It has the potential to intervene at multiple steps in the psoriasis process by blocking interleukin-8. Under their agreement, JT will make undisclosed payments to Abgenix to finance clinical trials of ABX-IL8. If those tests appear promising, the Japanese company could obtain the right to use clinical data produced by Abgenix in its own regulatory filings in Japan, South Korea and Taiwan subject to additional funding.
Under an October 1996 arrangement, TAIHO PHARMACEUTICAL CO., LTD. and SRI INTERNATIONAL have collaborated on the development and the evaluation of novel endocrine approaches to the treatment of tamoxifen-resistant breast cancers. That work led to the identification of SR 16234 (TAS-108) as a lead candidate for further preclinical and clinical development. Under their latest pact, the midsize Japanese drug company has licensed from Menlo Park, California-based SRI worldwide development and marketing rights to these compounds in exchange for up-front and milestone payments, plus research and development funding and royalties on approved products. SRI now will improve the chemical synthesis process to ensure that the compounds meet manufacturing cost targets. It also will examine their biological chain of action. This research will be completed by next January. SRI then will launch an expected 15-month preclinical development phase. At that point, Taiho Pharmaceutical intends to file its first investigational new drug application in the United States preparatory to the start of human trials.
TAKARA SHUZO CO., LTD. and Indiana University's School of Medicine have extended a research contract first signed in 1995 involving a gene-treatment procedure for cancer patients known as human recombinant fibronectin. Clinical trials of HRF, which the Japanese partner supplies free of charge, have been underway around the United States for approximately three years. Under the updated contract, Takara Shuzo and Indiana University will expand the application of their gene-therapy technique to five conditions from the former three, which included brain tumors.
An exchange rate of ¥121=$1.00 was used in this report.
The Magnia line of workgroup, departmental and enterprise PC servers is ready for clustering. By integrating Windows NT Server 4.0 Enterprise Edition and CLARiiON storage systems from DATA GENERAL CORP., the Computer Systems Division of TOSHIBA AMERICA INFORMATION SYSTEMS, INC. has come up with a solution that will transparently give Magnia users continual access to data, applications and data processing. Clustered servers share resources to deliver levels of availability, reliability and fault tolerance that previously were obtainable only through more expensive and complex distributed data processing systems.
Through steps both large and small, PACKARD BELL NEC, INC. continues to work toward its goal of restored profitability (see Japan-U.S. Business Report No. 354, March 1999, p. 3). On the commercial side of the business, the NEC Computer Systems Division augmented its wholesale channel by signing MERISEL, INC. to distribute to resellers the complete line of NEC Versa notebook computers, PowerMate desktop PCs, Express5800 servers and MobilePro handheld PCs. At the end of last year, NEC CSD abandoned its 18-month-old policy of exclusively selling direct to corporate customers by resigning wholesale distributor TECH DATA CORP. (see Japan-U.S. Business Report No. 352, January 1999, p. 3).
Given PACKARD BELL NEC, INC.'s problems, its Consumer Division has a lot riding on retail buyers' response to the brand-new, all-in-one NEC Z1 home computer. Scheduled to arrive in stores in early August at a suggested price of $2,500, this system combines a sleek design and a small footprint with cutting-edge technology. It features a 15-inch active-matrix TFT (thin-film-transistor) flat-panel display with a XGA (extended graphics array) resolution of 1024 x 768 pixels. The Z1's performance- enhancing 450-MHz Pentium III processor, motherboard, memory (a standard 96 megabytes of synchronous dynamic random access memory) and other key hardware are housed in a slim, integrated chassis located directly behind the display. Underneath the integrated chassis/display is a base containing the Z1's 8.4-gigabyte hard drive. Innovative styling and the latest technology are not all that Packard Bell NEC is touting in the Z1. It also boasts of the PC's numerous ease-of-use features — a wireless keyboard, for instance — and the simplicity of upgrading the Z1.
TOSHIBA AMERICA INFORMATION SYSTEMS, INC.'s CSD rightfully prides itself on continuing to push the envelope on portability while giving mobile professionals the performance they demand in a distinctive package. Its new Portégé 3110CT notebook computer weighs 3.1 pounds and measures 0.8 inch thick, yet it is equipped to handle office, multimedia and Internet applications. The system runs off a 300-MHz mobile Pentium II processor and comes with 64 MB of SDRAM internal memory, a 6.4-GB hard disk drive and an integrated V.90 K56flex modem. It also incorporates the latest in display technology: a new low-power, high-contrast 10.4-inch polysilicon TFT screen. The Portégé 3110CT has an estimated street price of $2,300.
The Tecra 8000 notebook computer now can be configured in 12,800 different ways — a record for one hardware platform, TOSHIBA AMERICA INFORMATION SYSTEMS, INC.'s CSD says. The latest boost to the number of options comes from the addition of the new 400-MHz mobile Pentium II processor and the introduction of 10-GB and 14.1- GB hard drives. Corporate customers interested in the latest technology will have to be willing to spend roughly $4,400, however. That is the estimated price of a Tecra 8000 built with the fastest Intel mobile processor, 128 MB of SDRAM memory, 14.1 GB of storage, a DVD-ROM (digital video disc-read-only memory) drive and a 14.1-inch TFT LCD display with XGA resolution.
FUJITSU PC CORP. has decided that direct marketing and the Internet hold the greatest promise for expanding LifeBook sales to corporate notebook buyers. As a result, the company no longer will use the traditional two-tier distribution channel for computer products, although LifeBook models will continue to be available through select retailers as well as certain value-added resellers/dealers that provide integration and other services. The first products affected by the revamped distribution strategy are the redesigned LifeBook C Series, two additions to the LifeBook E Series targeted at business customers that require greater expandability, multiple operating system support and networking capabilities, and a new LifeBook B mininotebook model. The LifeBook C family, previously an entry-level line for the consumer market, was reengineered to provide a range of multimedia products with advanced computing features, including the 400-MHz mobile Pentium II processor and the 400- MHz mobile Celeron processor. The current high-end LifeBook C model combines a 400-MHz mobile Pentium II chip with 64 MB of internal memory, a 10-GB hard drive, a 4X DVD drive, a 14.1-inch XGA TFT display and a V.90 K56 modem for an estimated street price of $2,800.
The release of the 400-MHz mobile Pentium II processor marked the debut of the fourth generation of Versa LX and Versa SX notebook computers from PACKARD BELL NEC, INC.'s NEC CSD unit. The Versa LX line is targeted at business buyers that are looking for a powerful desktop replacement with big-screen multimedia performance, remote manageability and versatility in a networked environment. One configuration that meets these specifications involves a 400-MHz mobile Pentium II processor, a 14.1-inch TFT display, 128 MB of internal memory and a 10-GB hard drive for roughly $4,300. The Versa SX series, in contrast, is geared to mobile professionals interested in a lightweight notebook computer with complete functionality. Those requirements can be met for about $3,400, which buys a machine with a 400-MHz mobile Pentium II engine, a 14.1-inch TFT display, 64 MB of memory and 4 GB of storage in a case that is 1.3 inches high and that weighs 4.8 pounds.
A retail first is how SONY ELECTRONICS, INC. describes the VAIO F290 notebook computer with its 15-inch XGA active-matrix LCD display — the largest screen on the market today — and full-motion digital video editing capabilities. For added performance, the latest addition to the VAIO F200 Series contains a 400-MHz mobile Pentium II processor, 128 MB of SDRAM memory, a 6.4-GB hard drive and a 4X DVD-ROM drive with DVD movie playback capacity. Like other members of the line, it is dual battery-capable and features SONY CORP.'s iLink digital interface (IEEE 1394) for quick and easy video transfer from a Sony DV Handycam camcorder. The VAIO F290 has an estimated selling price of $3,500.
The first mobile Pentium II processor is available in a ruggedized notebook PC. The Toughbook 27 from PANASONIC PERSONAL COMPUTER CO. integrates this engine running at 300 MHz with an outdoor-viewable, touch-screen, 12.1-inch active-matrix color LCD display, a super shock-insulated 6-GB hard drive, a full-size keyboard and wireless communications capabilities in an all-magnesium alloy case. The Toughbook 27 comes in two models, priced at roughly $4,800 and $5,100.
SEIKO EPSON CORP. is banking on the Intelligent Register to strengthen its position in the point-of-sale systems market. Aimed at specialty retailers and convenience stores, this machine integrates a Pentium-class processor, a thermal or an impact printer module, a magnetic stripe reader and a color LCD touch screen with SVGA (super video graphics array) resolution (800 x 600 pixels) that is 30 percent brighter than its predecessor. Equally important for retailers trying to make the most of their counter space, Epson's Torrance, California marketing subsidiary says, the Intelligent Register has one of the smallest footprints among currently available POS systems.
One of the first American companies to make desktop laser printers now is majority owned by MINOLTA CO., LTD. At a cost of $34 million, the maker of copiers, printers and a long list of other products acquired a 51 percent stake in QMS, INC. As part of the deal, Minolta also lent the Mobile, Alabama business $12.8 million to complete its previously announced acquisition of former sales subsidiaries in Europe and Australia. Minolta executives see the relationship with QMS as speeding the company's growth in the field of digital color output devices. The American firm's product line not only is compatible with its, but QMS brings to the alliance strong R&D, sales and software development capabilities. With its ownership of QMS, Minolta claims roughly 10 percent of the U.S. color printer market, tying it more or less for third place, and about 24 percent of the European market, where it trails only HEWLETT- PACKARD CO. Minolta and QMS have had a working relationship since 1993 when the Japanese manufacturer began to supply printer engines for the American firm's color laser printers.
The DM2000 series of network laser document systems from SHARP CORP.'s Mahwah, New Jersey subsidiary is the latest entrant in the multifunctional peripherals category. Designed to handle the requirements of most offices or large workgroups at an affordable price, the DM2000 line prints 20 pages per minute with a resolution of 1200 dots per inch. As a digital copier, the system features scan once/print many technology and delivers a resolution of 600 dpi. The DM2000 ships standard as a network printer/digital laser printer for a suggested price of $3,000. Three other models are available with added features at prices ranging up to $4,500.
Although it is focused on building share in the U.S. ink-jet printer market, SEIKO EPSON CORP.'s sales unit is not neglecting other market segments. For instance, it expanded its line of narrow-carriage, nine-pin dot-matrix impact printers with the release of the EPSON FX-980. Able to handle up to seven-part forms and to print as many as 569 characters per second, this best-in-its-class machine retails for about $550. .....SEIKO EPSON CORP.'s subsidiary also put on the market the MT-500 line of fast, versatile thermal printing subsystems for such uses as cash dispensers, automatic teller machines, kiosks and perimutual gaming.
Giving a boost to the use of compact discs for such jobs as system backup and data archiving, RICOH CO., LTD.'s Tustin, California marketing arm is shipping what it bills as the fastest CD-Recordable/CD-Rewritable drive. The MediaMaster MP7060 combines a 6X CD-R speed and a 4X CD-RW speed with a 24X CD-reader. The internal drive is available for both ATAPI and SCSI interfaces at suggested prices of $350 and $400, respectively. An external SCSI version of the MediaMaster MP7060 was to be available by the end of July for $450.
The first generation of DVD+ReWritable media for recordable DVD drives has been released to drive manufacturers. Made by MITSUBISHI CHEMICAL CORP. and marketed by its wholly owned VERBATIM CORP. subsidiary, the DVD+RW media offers users a capacity of 3 GB along with the convenience of rewritability. MCC sees applications for it as an extension to hard disk storage and desktop backup or archiving as well as for multimedia presentations or home video production. The diversified Japanese multinational also is shipping through Charlotte, North Carolina- based Verbatim new DVD-R media with a write-once capacity of 4.7 GB on one disc surface. Designed for use in the DVD-R drives that drive suppliers announced earlier this year, this media also is read-compatible with today's DVD-ROM drives and DVD- Video players.
To help make all the corporate data still resident on S/390-compatible mainframe systems available to the fast-expanding number of PC servers in the business world, HITACHI DATA SYSTEMS CORP. announced an ESCON adapter. This product allows the company's line of VisionBase PC servers to act as very fast coprocessors to its Skyline Trinium and Pilot Series enterprise servers, providing a high bandwidth, bidirectional connection to their applications and data. According to HDS, the adapter is optimized for local area network gateway consolidation, data warehousing, data mining and enterprise resource planning server access of mainframe data.
SONY ELECTRONICS, INC. has broadened its lineup of flat-screen CRT (cathode-ray tube) displays for corporate desktops. All three new Multiscan models incorporate the company's FD Trinitron technology with its flatter screen surface, high contrast picture performance and high resolution rates. The 17-inch (16-inch viewable image size) CPD-G200 is available now for an estimated $500. The 19-inch (18-inch viewable image size) CPD-G400 and the 21-inch (19.8-inch viewable image size) CPD-G500 will ship in September at suggested retail prices of $750 and $1,200, respectively.
Also new from SONY ELECTRONICS, INC. is an 18.1-inch color TFT LCD display with a Super XGA resolution of 1280 x 1024 pixels. Listing for $3,700, the Multiscan CPD- L181 weighs less than 20 pounds and measures 8.3 inches deep at its base. That slim, lightweight configuration gives users the option of mounting the display on the wall or elsewhere off their desks when space is at a premium. The CPD-L181 display joins Sony's 15-inch and 13.3-inch TFT LCD monitors.
The second generation of a compact keyboard targeted at users of the Unix operating system is available from the San Jose, California marketing subsidiary of PFU LTD. Unlike the original with its multiplatform support, the Happy Hacking Keyboard Lite is designed specifically for the increasing number of people running the Linux freeware version of Unix. That focused approach enabled the company to cut the product's price in half to $70. The keyboard has only 60 essential keys, yet all the functions of a standard 101-key keyboard are available.
Presenters who want the latest LCD projection technology have any number of new options. SEIKO EPSON CORP., which bills itself as the world's number-one projector company, alone has five new products on the American market, including three brighter portable models and two ultraportables that are said to set a new standard for brightness in this category. Both groups of projectors offer a choice of SVGA or XGA resolution. Of course, Epson has no monopoly on claims of exceptional image quality and a wider range of features when it comes to projectors. HITACHI AMERICA, LTD. touts the same advantages of the two portable products and the one ultraportable that it recently added to its lineup. The new portables, which differ mainly in brightness and resolution (SVGA versus XGA), list for $9,000 and $13,000; the SVGA lightweight projector is priced at $7,500.
For its part, SANYO ELECTRIC CO., LTD., which also describes itself as the world's leading maker of projectors, is going after the true power presenter with the first all- digital LCD projector. This capability is the product of Cupertino, California-based SILICON IMAGE, INC.'s PanelLink Digital interface technology, but it comes with a stiff price tag: $24,000.
An exchange rate of ¥121=$1.00 was used in this report.
The world-renown Pebble Beach golf resort near Carmel, California — one of the symbols of the "buying of America" era in transpacific relations — is returning to U.S. ownership. A group of private investors has agreed to pay LONE CYPRESS CO. $820 million for the resort's four golf courses and two hotels. The current owner, an affiliate of golf-course management company TAIHEIYO CLUB INC., acquired the property in 1992 for an estimated $500 million after the Japanese entrepreneur who had purchased Pebble Beach in 1990 for a then eye-popping $841 million failed in his attempt to turn the golfing mecca into a private club and subsequently got caught in the fallout from the collapse of the "bubble economy."
The dismantling of what was once Japan's U.S. real estate empire continues in other, less visible ways. The latest case in point is the sale of a 52-story office tower in downtown Los Angeles by MITSUI FUDOSAN CO., LTD. A group of private investors is paying Japan's top real estate developer roughly $213.2 million for the nine-year- old building at the intersection of Wilshire Boulevard and South Figueroa Street. Mitsui Fudosan will take an estimated $59.5 million loss on the sale.
An exchange rate of ¥121=$1.00 was used in this report.
One of the pioneering Japanese-owned plants in the United States is closing. MATSUSHITA ELECTRIC WORKS, LTD. has decided to end production at AROMAT CORP. and transfer output to Mexico, Japan or other existing factories. Opened in 1979, the San Jose, California firm currently makes signal relays at the rate of 1.5 million to 2 million units a month for sale to major U.S. communications manufacturers. MEW calculates that moving production to Mexico, where two of Aromat's five lines will be relocated, will slash labor costs to roughly one-sixth present levels. However, roughly 250 Californians will lose their jobs in the process.
Building on their year-old production agreement (see Japan-U.S. Business Report No. 346, July 1998, p. 4), NEC CORP. and KEMET ELECTRONICS CORP. have agreed to copromote their identical conductive polymer tantalum capacitors. Through these efforts, the Japanese industrial electronics giant, the world leader in polymer tantalum capacitors, and Greenville, South Carolina-headquartered KEMET, which ranks first in the manufacture of solid tantalum capacitors, believe that NeoCapacitors and KO Caps will find faster acceptance in applications currently served by certain types of aluminum capacitors and some high-capacitance ceramics. The partners also will continue working on next-generation technologies for polymer capacitors.
Last year's buyout of TOTAL CONTROL PRODUCTS, INC. by fellow industrial control systems manufacturer GE FANUC AUTOMATION NORTH AMERICA, INC. upended DIGITAL ELECTRONICS CORP.'s U.S. distribution arrangements (see Japan-U.S. Business Report No. 351, December 1998, p. 5). As planned, however, the Osaka maker of electronic control systems opened a subsidiary in Glendale Heights, Illinois to oversee marketing. PRO-FACE AMERICA, INC. already has contracted with Melrose Park, Illinois-based TCP to use its distribution channels. Charlottesville, Virginia's GE Fanuc also intends to sell the Digital Electronics line. Pro-face is forecasting sales of $12.4 million by the end of 1999.
Like a number of other Japanese manufacturers, IWASAKI ELECTRIC CO., LTD. has had to pump money into its unprofitable U.S. production unit. It put an extra $5 million into EYE LIGHTING INTERNATIONAL OF NORTH AMERICA INC., a Mentor, Ohio company that has made and marketed high-intensity lamps since 1991. The capital injection wiped out Eye Lighting's negative net worth and should enable it to borrow on more favorable terms.
Peachtree City, Georgia-headquartered MATSUSHITA COMMUNICATION INDUSTRIAL CORP. OF U.S.A. will begin manufacturing AM/FM tuners for automotive radios in August in addition to its current lines of vehicle audio products. This output will replace about one-third of the supply of AM/FM tuners from MATSUSHITA COMMUNICATION INDUSTRIAL CO., LTD.'s factory in Matsumoto, Nagano prefecture. The Georgia plant has room to add the slim, business card-sized tuners, which also can be used in DVD-equipped car navigation systems, because it ended production of cellular telephones in April 1998.
Bringing the closest thing to CD-quality sound and clarity to AM and FM radio listeners is the goal of a technology and marketing alliance between KENWOOD CORP. and USA DIGITAL RADIO, INC. The Columbia, Maryland digital broadcast technology company, which is owned by some of the biggest U.S. radio broadcasters, is pursuing so-called in-band, on-channel digital audio broadcasting technology. It and Kenwood, a leading maker of radio receivers, will work together to develop, test and promote IBOC DAB receivers, including designing coordinated strategies for the launch of the IBOC know-how and related Kenwood products.
The prospect that development and manufacturing partners MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., MATSUSHITA-KOTOBUKI ELECTRONICS INDUSTRIES, LTD. and QUANTUM CORP. held out this past spring of giving television viewers the ability to watch what they want, when they want should be a reality by the 1999 holiday selling season (see Japan-U.S. Business Report No. 355, April 1999, p. 5). PANASONIC CONSUMER ELECTRONICS CO. announced that it will market what it calls hard disk recorders with ReplayTV technology licensed from REPLAY NETWORKS, INC. of Mountain View, California. With a ReplayTV set-top box, the free Replay Network Service and an on-screen program guide, viewers can control real- time television just as if they were watching a recorded program because the program in progress is being recorded on a hard drive. MKE will manufacture the set-top boxes using Quantum-supplied hard drives.
An exchange rate of ¥121=$1.00 was used in this report.
In the last year or two, SOFTBANK CORP. has made a name for itself in the United States as a major financial backer of Internet-related start-ups, a number of which have earned it huge profits, at least on paper, when going public. Its reputation for savvy investing no doubt will expand with the launch of two record-breaking U.S. venture capital funds focused on promising Internet companies. One will be spearheaded by SOFTBANK CAPITAL PARTNERS LP of Newton Center, Massachusetts. It expects to raise $1.2 billion, including close to $500 million from Softbank itself, to invest in about 20 Internet ventures that plan initial public offerings within three to six months. The other investment vehicle will be organized by SOFTBANK TECHNOLOGY VENTURES L.P. of Mountain View, California. This $600 million-targeted fund, which will receive some $125 million from Softbank, will provide financing over the next three years for as many as 70 Internet businesses that are just getting started.
NTT SOFTWARE CORP. committed $5 million to the $50 million EnCompass U.S. Information Technology Partners II venture capital fund. Organized by ENCOMPASS GROUP INC. of Bellevue, Washington, the fund is seeking investment opportunities in the information technology field, particularly companies with cutting-edge Internet, electronic commerce and data warehousing software expertise. Along with its investment, NTT Software sent two employees to EnCompass in order to become more skilled in recognizing promising start-ups and nurturing them.
Having identified the IT area as a major growth opportunity in its medium-term business strategy, ITOCHU CORP. is prepared to provide roughly $16.5 million in financing to Silicon Valley Internet-related businesses in FY 1999. About half of this money will be invested directly; the rest will be turned over to venture capital funds. To date, the trader has invested a total of $16.5 million in approximately 40 high technology start-ups. It recently spread $24.8 million among 10 venture capital funds focused on entrepreneurial IT firms.
In the hope of speeding corporate diversification, CANON INC. is setting up a mergers and acquisitions group in the United States. The unit initially will be a division of Lake Success, New York-headquartered CANON U.S.A., INC., but the goal is to spin it off into a freestanding company within two years. The company's M&A specialists will consider investments in both new businesses and existing midsize companies in the target industries of optics, computers, defense and aerospace. Canon reportedly is willing to stake in excess of $82.6 million on any one firm.
Forming one of three joint businesses announced in May 1998, INDUSTRIAL BANK OF JAPAN, LTD. acquired a 50 percent in NOMURA SECURITIES GLOBAL INVESTMENT ADVISORS, INC., previously a wholly owned subsidiary of NOMURA SECURITIES CO., LTD.'s U.S. holding company. Headquartered in New York City with an office scheduled to open in Tokyo, NOMURA IBJ GLOBAL INVESTMENT ADVISORS, INC. provides advice to institutional clients on fund evaluation and manager selection as well as on asset allocation. It also monitors funds.
By chance, IBJ WHITEHALL BANK & TRUST CO., a wholly owned INDUSTRIAL BANK OF JAPAN, LTD. company (see Japan-U.S. Business Report No. 353, February 1999, p. 7), agreed at the same time to sell its corporate trust business to BANK OF NEW YORK CO. for an undisclosed price. The transaction, set to close in October, will allow IBJ Whitehall to focus on its core businesses of asset management, private banking, corporate finance and asset-based lending.
Due to complete its withdrawal from offshore banking operations by March 2000, DAIWA BANK, LTD. plans to give four foreign asset managers responsibility for handling the financial assets invested overseas on behalf of its pension and general corporate trust clients. In the United States, the Osaka-headquartered nationwide commercial bank tentatively has agreed to put FIDUCIARY TRUST CO. INTERNATIONAL in charge of U.S. equity investments. BROWN BROTHERS HARRIMAN & CO., also based in New York City, will be used for U.S. bond investments.
The commercial mortgage lending company that the New York City subsidiary of ORIX CORP. formed in the spring of 1997 with BANC ONE CORP. is slated to become a wholly owned unit of Japan's biggest leasing company. How much Orix is paying for Banc One's 55 percent interest in BANC ONE MORTGAGE CAPITAL MARKETS, LLC has not been disclosed. The joint venture has expanded quickly. It had assets of $593 million as of May 31, 1999 versus $37 million at formation. Moreover, at the end of last year, BOMCM was the fifth-largest commercial loan servicer in the United States. It also is a major player in the market for subordinate commercial mortgage-backed securities and an active originator of loans for securitization sale. Once the acquisition is finalized, Orix will rename the company ORIX REAL ESTATE CAPITAL MARKETS, LLC. The firm will remain focused, however, on commercial mortgage servicing, commercial mortgage-backed securities investments and commercial mortgage origination.
An exchange rate of ¥121=$1.00 was used in this report.
Strengthening its export capacity for the large volume of bulk agricultural commodities it ships from the United States to Japan and other Asian markets, MI-TSUBISHI CORP. acquired for an undisclosed price a 10 percent interest in a company previously owned equally by agribusiness heavyweights ARCHER-DANIELS-MIDLAND CO. and CONAGRA, INC. KALAMA EXPORT CO. LLC operates a grain elevator in Kalama, Washington on the Columbia River. It can load ships at a rate of roughly 3,300 tons an hour and has a storage capacity of 55,000 tons or so. Mitsubishi plans to use KEC to export corn, wheat and other grains bought by the inland terminals run by its AGREX, INC. subsidiary and other companies.
Although the Ministry of Agriculture, Forestry and Fisheries is still deciding whether to require labeling of products made from genetically modified soybeans and other crops, MARUBENI CORP. is betting that there is a market in Japan among makers of tofu, miso and other products made from soybeans for a commodity that has not been bioengineered. Working with ARCHER-DANIELS-MIDLAND CO., the trader plans to ship some 33,000 tons of nongenetically modified soybeans to Japan annually starting this fall. ADM and Marubeni already have contracted with farmers in Illinois and Michigan that have roughly 34,000 acres planted to soybeans that are not genetically altered.
At least two Japanese companies see an expanding market at home for products certified as organic by the Organic Crop Improvement Association. DAI-NIPPON MEIJI SUGAR CO., LTD. has contracted with FLORIDA CRYSTALS, INC. to supply organic sugar. Sold under the Florida Crystal brand name, the Palm Beach, Florida company's organic sugar is made without additives from sugar cane grown on land that has not been treated with chemicals for at least three years. Dai-Nippon Meiji Sugar will market Florida Crystal to stores that have an organic foods section. It has estimated first-year sales at $1.7 million. For its part, KIRIN BREWERY CO., LTD. expects to import in FY 1999 as much as 385,000 tons of organic rice from a California grower with which it tied up last year. Priced about the same as Japan-grown rice, the California product will be distributed to retailers as well as to sake brewers. MATSUTANI CHEMICAL INDUSTRY CO., LTD., the developer of the Food and Drug Administration-approved FiberSol-2 water-soluble food fiber, has opened a marketing subsidiary in Chicago. The Hyogo prefecture starch manufacturer sees a growing market in the United States among hospitals and makers of diet foods for FiberSol-2 now that both CAMPBELL SOUP CO. and KRAFT GENERAL FOODS, INC. are using the product. The new sales unit is projecting sales of anywhere from $16.5 million to $24.8 million in the first year of operation. Under an early 1997 contract, ARCHER- DANIELS-MIDLAND CO. makes FiberSol-2 for the American market.
An exchange rate of ¥121=$1.00 was used in this report.
In a deal that should help offset slumping sales at home, ISHIKAWAJIMA CONSTRUCTION MACHINERY CO., LTD. has signed a long-term marketing agreement with TEREX CRANES, INC. covering hydraulic crawler cranes. The contract covers size classes smaller than the Conway, South Carolina company's own American-brand series of crawler and truck cranes, which previously started with a 125-ton-capacity machine. The line now has been extended downward to 80-ton- capacity crawler cranes. The machines can be equipped with American's 47-inch tubular boom and fixed jib or with Ishikawajima Construction's tubular boom and luffing jib. The arrangement gives Terex Cranes marketing rights to the Japanese- made products in North America, Latin America, the Middle East and Africa. Ishikawajima Construction expects to supply 50 crawler cranes to Terex Cranes in the first year of the agreement for sales of $16.5 million. This is the second move the company has made recently to strengthen its business in the United States (see Japan-U.S. Business Report No. 355, April 1999, p. 6).
Through a recently opened office in Miami, MI-TSUBISHI HEAVY INDUSTRIES, LTD. has launched direct marketing of its midsize and large offset printing presses in Latin America — an area that previously had been served with little success by a distributor. The office, run by MHI printing press subsidiary MLP U.S.A., INC. of Lincolnshire, Illinois, is equipped with a demonstration facility.
Within this year, American users of CITIZEN WATCH CO., LTD.'s CNC (computer numerically controlled) Swiss Turning line of lathes will be able to get help with hardware and software problems over the Internet. A server operated by MARUBENI CITIZEN-CINCOM INC. will provide access to the ALKARTNET troubleshooting system. That Allendale, New Jersey company, in which trader MARUBENI CORP. has a 50 percent interest, is in charge of importing and marketing Citizen's CNC lathes in the United States.
TEIJIN SEIKI CO., LTD. formed TEIJIN SEIKI ADVANCED TECHNOLOGY, INC. in Farmington Hills, Michigan to boost direct sales of its reduction gears. Marketing will be directed mainly to manufacturers of robotic systems. The Osaka company's other U.S. marketing unit for gears is TEIJIN SEIKI BOSTON, INC. of Peabody, Massachusetts, which also makes these products for power transmission applications.
With the end last year of its marketing tie-up with WESTINGHOUSE ELECTRIC CORP. on gas turbines and other prime movers, MITSUBISHI HEAVY INDUSTRIES, LTD. is on its own in the United States. The big heavy equipment manufacturer is unfazed by this challenge, projecting a minimum sales gain of 21 percent in FY 1999 to $371.9 million. Its near-term strategy is to target sales of midsize gas turbines — units with an output of 400,000 kilowatts to 500,000 kilowatts — to the growing ranks of independent power producers. Gas turbines not only are a highly efficient source of electricity production, but they also reduce carbon dioxide emissions. To support this marketing thrust, MHI plans to hire additional service personnel. It also could decide to outsource maintenance work to U.S. firms.
An exchange rate of ¥121=$1.00 was used in this report.
The fierce competition in the American photocopying equipment market has claimed a second-tier Japanese player. By yearend, COPYER CO., LTD. will liquidate its money- losing SELEX SYSTEMS USA, INC. marketing subsidiary after ending sales in August. CANON U.S.A., INC. will take over the San Carlos, California company's ancillary activities, including servicing installed machines. Most of Copyer's business comes from making analog and digital copiers for CANON INC., but since 1993, it had been trying to promote its own Selex-brand copiers in the United States. Copyer will take a $2.7 million charge in connection with the liquidation of Selex Systems.
An exchange rate of ¥121=$1.00 was used in this report.
Convinced that two minds are better than one, ANDO ELECTRIC CO., LTD. and HEWLETT-PACKARD CO. signed a three-year contract to develop and market products for the expanding high-bandwidth DWDM (dense wavelength division multiplexing) and SONET/SDH (synchronous optical network/synchro-nous digital hierarchy) functional test equipment market. This is a market in which both electronic test equipment manufacturers already are active. The partners' first product is expected to be released in nine to 12 months. It and its successors will be marketed outside Japan by HP, thereby giving Ando Electric access to a broader base of network equipment makers and long-distance carriers than it has now. The Japanese company will handle marketing in Japan.
A $5 million purchase of the preferred stock of INTUITIVE SURGICAL, INC. gave MARUBENI CORP. and its primary U.S. subsidiary a small minority interest in the Mountain View, California developer of the computer-enhanced, minimally invasive da Vinci Surgical System. It also gave the trader exclusive sales rights in Japan to the endoscopic system, which is nearing Food and Drug Administration marketing approval. The da Vinci Surgical System consists of a viewing and control console through which the surgeon has a high-resolution, three-dimensional image of the surgical field and a surgical arm unit that holds and manipulates detachable microsurgical instruments. These pencil-size instruments, which are equipped with Intuitive's EndoWrist computer-enhanced mechanical wrist technology, provide the dexterity of the surgeon's hand and wrist at the operative site through tiny ports.
An exchange rate of ¥121=$1.00 was used in this report.
By their own estimates, an early 1998 collaboration enabled SHARP CORP. and CONEXANT SYSTEMS INC. to shave at least three months off the installation of 0.18- micron CMOS (complementary metal-oxide semiconductor) processing capability at each of their wafer-fabrication facilities and to save millions of dollars in development costs compared with working independently. Both manufacturers specialize in the production of integrated circuits for communications products. The 0.18-micron CMOS process technology is in place at the Newport Beach, California facility of Conexant, which was ROCKWELL INTERNATIONAL CORP.'s semiconductor division until the start of 1999, and at Sharp's front end in Fukuyama, Hiroshima prefecture. Based on the success of their initial tie-up, the two have decided to extend their collaborative efforts to 0.15-micron process technology development for communications products, targeting production release in the summer of 2000, and then to 0.12-micron production capability.
Deciding that it was better off devoting scarce resources to cutting-edge products rather than keeping money tied up in mature semiconductor manufacturing equipment products, TOKYO ELECTRON LTD. sold its Gilbert, Arizona batch in-line sputter and etch product lines to KDF ELECTRONIC & VACUUM SERVICES, INC. of Orangeburg, New York. TEL acquired the batch product lines, which have about 10 percent of the world market for physical vapor deposition equipment, in February 1998 from MATERIALS RESEARCH CORP., a SONY CORP. company.
An exchange rate of ¥121=$1.00 was used in this report.
Already known in the Internet community for its willingness to invest in promising start- ups as well as for its skill in choosing companies to back financially, SOFTBANK CORP. has made one of its largest investments to date in an electronic commerce venture. Through its just-launched SOFTBANK CAPITAL PARTNERS LP fund, it invested $80 million in GLOBAL SPORTS, INC. for a roughly 30 percent stake. The King of Prussia, Pennsylvania e-commerce company has exclusive agreements to operate the Internet businesses of six sporting goods retailers. It has a partnership arrangement with THE SPORTS AUTHORITY, INC. and outsourcing contracts with the others. The six e-commerce Web sites are scheduled to be up and running in the fourth quarter of 1999.
In a parallel but smaller-scale move, the U.S. venture capital unit of SOFTBANK HOLDINGS INC. participated in the first round of venture capital financing for GAMESVILLE.COM, INC. The Boston-based on-line game show site operator and data base marketing company raised more than $14 million. It will use this money to market Gamesville.com more aggressively. The site has registered 1.4 million-plus people to play what are described as the world's largest real-time, massively multiplayer games and to win prizes.
A third round of financing for SENDMAIL, INC. raised $10.6 million for the Emeryville, California provider of standards-based Internet messaging solutions, mainly from ASCII NETWORK TECHNOLOGY, INC. and TRANS COSMOS INC. As part of the deal, the two signed agreements to resell, market and support in Japan Sendmail's Unix-based products. Some 2 million copies of Sendmail's Internet messaging software have been installed worldwide, including in Japan.
MITSUBISHI CORP. is the first foreign backer of ANNUNCIO SOFTWARE, INC., a Los Altos, California developer of Internet marketing products that allow businesses to automate their marketing campaigns. The trader joined in a third round of funding that generated $5.5 million. Mitsubishi and Annuncio will work together to pursue opportunities to deliver Annuncio Live, which has been on the market since late 1998, and other marketing automation solutions in Japan as well as in other Asian markets.
The Palo Alto, California unit of venture capital investor JAFCO CO., LTD. joined two other venture capital firms in providing $5.5 million in equity financing for PHOTO ACCESS CORP. The Mountain View, California company is developing a digital imaging platform that will enable owners of digital cameras to share pictures over the Internet through a direct link. Alternatively, they will be able to connect directly to a printer. Photo Access used part of the money it raised to establish an office in Tokyo.
In an unusual move for an independent Japanese software developer, i4 CORP. has brought its core Internet Ninja v3 product to the United States. The Tokyo company lined up SIERRA ON-LINE, INC. to market the fully localized program alone as well as bundled with the Bellevue, Washington company's own offerings. Internet Ninja helps Web surfers organize the information they find, saving pages in a thumbnail data base format. It then automatically downloads pages from specified sites at specified times by creating URL links. If desired, the files can be exported to various applications. Internet Ninja also can file and manage digital camera images. i4, which opened an office in San Francisco, predicts that 500,000 copies of Internet Ninja will be sold in the first year of U.S. marketing.
Nendo, NICHIMEN GRAPHICS INC.'s 3D modeling and paint software program, will be ported to the BeOS operating system developed by BE INC. of Menlo Park, California for digital media applications and Internet appliances. Nendo for BeOS should be commercially available in the fourth quarter.
More than 25 software packages have been adapted for use with HITACHI, LTD.'s M2 family of multimedia recording devices (see Japan-U.S. Business Report No. 353, February 1999, p. 6). These recorders allow users to shoot multiple images, record high-quality sound and create full-motion MPEG-1 movies that can be transferred to a laptop or a desktop computer. The new software tools will give M2 owners even greater ability to create dynamic multimedia Web pages and presentations.
HITACHI SEMICONDUCTOR (AMERICA), INC. and REPTRON ELECTRONICS INC. opened an engineering design center in San Jose, California to provide software development tools and documentation support for the Japanese chip manufacturer's microprocessors and microcontrollers. The tie-up will enable Tampa, Florida-based Reptron to provide more timely and complete configuration of development systems as well as to deliver better support during tool installation at customer sites.
An exchange rate of ¥121=$1.00 was used in this report.
In a development that augurs well for the ability of HITACHI TELECOM (USA), INC. to expand its telecommunications equipment business (see Japan-U.S. Business Report No. 350, November 1998, p. 9), MCI WORLDCOM, INC. successfully completed a technical trial of optical networking using Hitachi-supplied optical cross-connect systems to provide millisecond restoration to any disrupted optical signal. At the broadest level, the test, conducted in the metropolitan Dallas area over two years, demonstrated that various types of traffic from different types of equipment manufactured by multiple vendors can be transported over the same optical backbone while maintaining the highest level of survivability. The latter function was the contribution of the six separate Hitachi OXC nodes, which MCI WorldCom configured as dual rings.
In another potential boon for its business, HITACHI TELECOM (USA), INC. is working with NEXABIT NETWORKS, INC. on very high-bandwidth optical internetworking solutions for data routing and transport. The alliance already is yielding results. The development partners have figured out how to transport Internet Protocol and ATM (asynchronous transfer mode) data traffic at 10 gigabits per second between the Marlborough, Massachusetts firm's NX6400 multiterabit core switch/router and Hitachi Telecom's DWDM equipment without the need for intermediate optical-electrical- optical conversion. Transponders normally provide this step, but they can represent a significant cost in a large network. Beta testing of the Hitachi Telecom-Nexabit Networks product is underway.
Four big names in the world telecommunications business with long involvement in fiber-to-the-home and fiber-to-the-business initiatives have developed a common technical specification for high-capacity optical network access systems. The agreement by NIPPON TELEGRAPH AND TELEPHONE CORP., BELLSOUTH CORP., BRITISH TELECOMMUNICATIONS PLC and FRANCE TELECOM S.A. on the requirements for passive optical networks is aimed at maximizing the number of business and residential customers that have the necessary bandwidth for future data, imaging and video applications while minimizing equipment costs. All four carriers participate in the Full Service Access Network alliance, a group of 20 international network operators working to develop standards-based ATM-PON technology for implementing large-scale, full-service access networks. NTT and Atlanta- headquartered BellSouth launched cooperative R&D work on FTTH technology a year ago (see Japan-U.S. Business Report No. 346, July 1998, p. 8).
On the heels of this announcement, MITSUBISHI WIRELESS COMMUNICATIONS, INC. introduced a family of optical access products designed specifically for the North American carrier network market and based on the FSAN concept. Capable of delivering end-to-end fiber connectivity to homes and businesses, the line consists of a central office-based optical line terminal, a subscriber-based optical network terminal, a service access multiplexer, a high-speed ATM service unit and an element management system. The MITSUBISHI ELECTRIC CORP.-built Integrated Full Service Access Platform product line will be available for trial later this year through the recently formed Telecommunications Network Division of Duluth, Georgia- headquartered Mitsubishi Wireless Communications.
As early as 2001, MITSUBISHI MATERIALS CORP. could launch in the United States a wireless Internet access service for vehicular and other mobile terminals. Its SWIFTcomm technology, which recently underwent field trials in Oklahoma City, Oklahoma, establishes real-time connections to the Internet over a direct IP link. It does so, the company claims, without the data-reception errors and time-consuming procedures that have plagued previous mobile services. Mi-tsubishi Materials attributes the reliability and the ease of use of SWIFTcomm mainly to its super- narrowband technology, which employs such readily available radio frequencies as those used by taxis and other commercial services. SWIFTcomm comprises mobile terminals, base stations and a server for routing signals between the Internet and the base stations and the terminals. Mitsubishi Materials believes that here, too, its technology has the edge. For instance, a SWIFTcomm base station can serve more than 100 times the number of customers as other proposed systems.
In a coup for MITSUMI ELECTRIC CO., LTD., the Tokyo manufacturer will be the sole supplier (at least for now) of terminals to AT&T CORP. that will allow cable television subscribers to use that wiring for telephone service. With input from ARRIS INTERACTIVE, LLC, a Suwanee, Georgia joint venture between ANTEC CORP. and NORTEL NETWORKS CORP. that makes the Cornerstone line of cable telephony products, Mitsumi Electric will adapt its Voice Ports CATV connector terminal to AT&T's specifications. The terminal will be produced in the Philippines, where Mitsumi Electric is in the process of boosting Voice Ports capacity to 200,000 units a month from 50,000. Duluth, Georgia-based ANTEC actually will supply the product to AT&T.
An exchange rate of ¥121=$1.00 was used in this report.
Commercial production of radial car and light truck tires for the original equipment and replacement markets has begun at BRIDGESTONE/FIRESTONE, INC.'s sixth American tire manufacturing facility. The $435 million factory, announced in July 1997, is located in Graniteville, South Carolina, between Aiken and North Augusta. At full- capacity operation, scheduled to be achieved by the end of 2000, the plant will be able to turn out 25,000 tires a day, or 9 million a year. At start-up, it had more than 400 people on the payroll. By yearend, though, staffing should reach 650 people.
With additional U.S. capacity coming onstream, BRIDGESTONE/FIRESTONE, INC. has a better shot of gaining ground on American market tire leader GOODYEAR TIRE & RUBBER CO. To improve the odds, the company plans to add 100 retail outlets by the end of 2001 to its network of some 1,500 directly managed stores selling tires under the Bridgestone and Firestone brands. The current schedule calls for opening 25 stores this year, 30 in 2000 and 45 the following year. Bridgestone/Firestone also will renovate many of its older outlets.
Manufacturing partners overseas, TEIKOKU PISTON RING CO., LTD. and FEDERAL- MOGUL CORP. have decided to tie up in the United States. Through a joint venture in which the Japanese company has a 40 percent interest, they will make thin-wall, low- cost, high-performance automotive cylinder liners using Teikoku Piston Ring's technology. FEDERAL-MOGUL TP LINERS, INC. will operate out of its Southfield, Michigan parent's Lake City, Minnesota manufacturing facility, which currently makes heavy-duty cylinder liners. More than $10 million will be invested in the operation over the next two years, with production set to begin in the fall of 2000. The driving force behind the alliance is the move among automotive manufacturers to replace conventional cast-iron block engines with aluminum block designs that have cast-iron cylinder liners in order to reduce vehicle weight and, thereby, improve fuel economy and cut emissions.
To better serve automotive manufacturers with plants in the upper Midwest and in Canada, interior trim products supplier KASAI KOGYO CO., LTD. will build a $12 million factory in Upper Sandusky, Ohio. Its M-TEK INC. subsidiary will run the facility, which is scheduled to be operational in mid-2000. The Ohio plant will make a variety of interior trim products for supply to FORD MOTOR CO. as well as to HONDA OF AMERICA MANUFACTURING, INC. and Lafayette, Indiana-based SUBARU-ISUZU AUTOMOTIVE INC. Kasai Kogyo projects the plant revenues at $26 million in 2000 and $56 million in 2001. In that year, the new production base should have a staff of 135. The original M-Tek plant, located in Manchester, Tennessee, has been making interior trim products since 1987.
With car and light truck production booming in North America, OGURA CLUTCH CO., LTD. has on the drawing boards a second U.S. factory. Its Madison Heights, Michigan plant, opened in 1990, makes compressor clutches for automotive air-conditioning units. The new facility will make the same product at a full-capacity rate of 2 million units a year. It is expected to be operational by the middle of 2000 even though the site selection process has not been completed.
For more than a decade, SUMITOMO ELECTRIC WIRING SYSTEMS, INC. has made automotive wire harnesses and connectors at its three Kentucky locations. Starting in 2000, however, the firm — a joint venture between SUMITOMO ELECTRIC INDUSTRIES, LTD. (65 percent) and SUMITOMO WIRING SYSTEMS, LTD. (35 percent) — will add electronic control units to the output of its Morgantown, Kentucky factory. The parts are expected to be used in airbag systems.
In a major acknowledgement of the advanced electrical distribution expertise of SUMITOMO ELECTRIC WIRING SYSTEMS, INC. and its parents, the huge Visteon Automotive Systems unit of FORD MOTOR CO. is partnering with the Bowling Green, Kentucky-headquartered business to engineer body electronics and electrical distribution systems for global automotive makers. These solutions will provide greater integration, less weight and lower costs than what currently is on the market, Visteon promises. Equally owned AUTONEURAL SYSTEMS, LLC, which will draw on the systems capabilities of the world's second-largest automotive parts manufacturer, will be based at Visteon's technical center in Allen Park, Michigan. Reflecting the fast- expanding amount of outsourcing of major vehicle systems in the automotive industry, the partners expect AutoNeural to be generating revenues of $100 million by 2004.
FREUDENBERG-NOK, a major supplier of sealing packages for transmissions, engines, brakes, axles and steering, is moving into production of brake hose assemblies for hydraulic braking systems. The Plymouth, Michigan-headquartered partnership between NOK CORP. and FREUDENBERG & CO. does not yet have any contracts in hand for this product, which consists of flexible rubber hosing with metallic fittings mechanically attached. However, the company is confident that business will come its way given its expertise in rubber technology and its German parent's position as a major maker of brake hose assemblies in Europe.
An instrument panel that offers vehicle builders and consumers several advantages over competing products is available from INTERTEC SYSTEMS, LLC (see Japan- U.S. Business Report No. 350, January 1999, p. 9). The Japan-developed HPI processing technology used to make the instrument panel can reduce waste, create integration opportunities, offer more styling choices and improve aesthetics, the equally owned joint venture between INOAC CORP. and JOHNSON CONTROLS, INC. claims. It is the third-largest independent maker of instrument panels in North America.
An exchange rate of ¥121=$1.00 was used in this report.
Changing market conditions at home and yen/dollar exchange rate fluctuations persuaded SEVEN INDUSTRY CO., LTD., Japan's top producer of laminated lumber, to close its laminated lumber plant outside Seattle. Opened in 1993 with a local firm as a minority (49 percent) investor, the factory had the capacity to turn out monthly about 18,000 cubic feet of product made from black alder. However, that member of the birch family has lost ground to other types of wood in Japan's residential construction market. Despite the end of onshore production, Seven Industry continues to import U.S.-engineered lumber made from pine.
Operations have started at PACIFIC WOODTECH CORP.'s $40 million-plus, state-of- the-art engineered lumber facility in Burlington, Washington. At full production, expected to be reached in the spring of 2000, the wholly owned ITOCHU CORP. unit will be able to produce annually 2.8 million cubic feet of private-label laminated veneer lumber, which increasingly is used in headers above doors and windows, and 50 million lineal feet of I-beams made from LVL or solid sawn lumber for use as roof rafters and floor joists. In time, about 120 people will be employed at the factory. Pacific Woodtech is projecting minimum annual sales of $70 million. A major share of this business will come from PRIMESOURCE, INC., one of the biggest sellers of building materials in the United States. Itochu, which already had a substantial American building products operation through a Kent, Washington subsidiary, bought Carrollton, Texas-based PrimeSource in the spring of 1998.
With U.S. cement demand booming, TAIHEIYO CEMENT CORP., Japan's top producer, has announced a 30 percent or so capacity expansion at the Rillito, Arizona plant of its CALIFORNIA PORTLAND CEMENT CO. subsidiary. The $297,500 project will lift the Rillito factory's output to roughly 1,750,000 tons a year by next March. The expansion will give California Portland Cement, which also has cement plants in Colton and Mojave, California, an extra 9.1 percent of output or an annual capacity of nearly 4,000,000 tons. One of the companies that merged to form Taiheiyo bought CPC in 1990. The big Japanese cement company also owns LONE STAR NORTHWEST INC., a 1987 acquisition.
MOSES LAKE INDUSTRIES, INC. is producing an electroconductive coating for CRTs in Manassas, Virginia. ASAHI GLASS CO., LTD., the world's second-largest maker of CRT glass, licensed the technology to the wholly owned TAMA CHEMICALS CO., LTD. subsidiary, which has made high-purity chemicals and chemical delivery systems in Moses Lake, Washington since 1985. The coating limits electromagnetic wave emissions as well as dust collection and reflective glare. The Virginia plant is expected to manufacture enough product in the first year of operation to coat 2 million CRTs. Asahi Glass, which is supplying intermediates to the facility, will market the coating to the American CRT plants operated by TOSHIBA CORP. and other companies through recently established AG SUN COAT, INC. It also is located in Manassas.
A next-generation oil is how M.K. PLANNING CO., LTD. describes Zymoil. The Tokyo company has set up wholly owned DIAWOOD INTERNATIONAL, INC. in Beverly Hills, California to promote the product, which works with all types of vehicles and machinery. It claims multiple benefits for Zymoil, starting with no oil change for 100,000 miles. Others include improved fuel economy, upgraded engine performance and extended vehicle or machine life. Given these advantages, Diawood is projecting annual U.S. sales of Zymoil at $10.7 million.
In response to spreading fraud in the global apparel industry, whether trademark infringement or counterfeiting, SONY CHEMICALS CORP.'s Mt. Pleasant, Pennsylvania manufacturing unit has tied up with AVERY DENNISON CORP.'s VIP Converted Products group to introduce a patented covert security system. Sony Chemicals will incorporate technology developed by NICOPI TECHNOLOGIES, INC. of West Conshohocken, Pennsylvania into its thermal transfer ribbon products. Avery Dennison will market the protective product, which apparel manufacturers can integrate with clothing tags and labels to invisibly mark their designs. The product identification service bureaus that the Pasadena, California-headquartered company maintains around the world will be used for authenication.
TOSHIBA CORP. has enhanced its ability to provide information technology consulting services to clients in Japan by opening the Toshiba Consultant Center in Fairfax in Reston, Virginia, which is in the middle of one of the fastest-growing technology hubs in the United States. TCCF is part of TOSHIBA AMERICA INFORMATION SYSTEMS, INC.'s Communications Information Group.
Building on a 1996 pact, JAPAN AIR SYSTEM CO., LTD. and NWA INC.'s Northwest Airlines have signed a code-sharing agreement. The code-share service initially will apply to JAS flights from Kansai International Airport to Fukuoka and Okinawa. The two carriers plan to expand the service to other Japan routes that JAS flies and to Northwest's extensive U.S.-Japan routes as well as to routes between Japan and other points in Asia. Earlier, Northwest entered into a freight code-sharing arrangement with NIPPON CARGO AIRLINES CO., LTD. (see Japan-U.S. Business Report No. 352, January 1999, p. 10).
An exchange rate of ¥121=$1.00 was used in this report.
Five years after forming DUPONT TEIJIN ADVANCED PAPERS JAPAN LTD. to develop, make and market aramid papers for electrical insulation in industrial equipment, equal partners E.I. DUPONT DE NEMOURS & CO., INC. and TEIJIN LTD. have extended the operation to include specialty papers used for electronic circuit substrates. The joint venture has found that aramid substrates are increasingly attractive alternatives to glass and resin-coated foils in electronics applications requiring greater circuit density and system reliability, such as mobile phones. DuPont Teijin Advanced Papers will market the aramid papers directly in Japan. Another joint venture will handle sales elsewhere in Asia, while the Richmond, Virginia DuPont Advanced Fibers Systems unit will be in charge of sales in other parts of the world. Annual sales of the new product are projected at roughly $8.3 million after about two years.
RESEARCH FRONTIERS INC. awarded DAINIPPON INK AND CHEMICALS, INC. nonexclusive worldwide rights to make emulsions that the Woodbury, New York company and its licensees will use to manufacture light-controlling film. Research Frontiers' SPD (suspended particle device) film allows users to electrically control the passage of light through windows, sunroofs, sunvisors, mirrors and eyewear. It also enables brighter, easier-to-read flat panel displays. The emulsions to be produced by DIC, the world's top maker of organic pigments, consist of liquid matrix polymers and Research Frontiers-developed liquid suspensions of light-absorbing particles.
In its first such agreement in Japan, AFFYMETRIX, INC. licensed TAKEDA CHEMICAL INDUSTRIES, LTD. on a nonexclusive basis to make and use nonlight-directed nucleic acid arrays for gene expression monitoring. The big pharmaceutical company will pay an undisclosed fee and annual royalties to the Santa Clara, California developer of the GeneChip system. Consisting of disposable DNA (deoxyribonucleic acid) probe arrays containing gene sequences on a chip, reagents, a scanner and other instruments, and software, the GeneChip system is designed to acquire, analyze and manage complex genetic information in order to improve the diagnosis, monitoring and treatment of diseases.
The Ministry of Health and Welfare approved and set a reimbursement rate for METRA BIOSYSTEMS, INC.'s Osteolinks-BAP, a serum bone turnover test based on the Mountain View, California company's Alkphase-B technology. SUMITOMO PHARMACEUTICALS CO., LTD. was Metra's development partner on this product and also will be in charge of marketing. In Japan, Osteolinks-BAP is indicated for help in diagnosing metastatic cancer and for managing bone disease in patients with chronic renal failure who are on dialysis and for people with primary hyperparathyroidism. It also is approved for Paget's disease.
MHW gave orphan drug status to Agrylin, a platelet-reducing therapy developed by ROBERTS PHARMACEUTICAL CORP. of Eatontown, New Jersey. That designation triggers a number of incentives for the drug's development in Japan. In the United States, Agrylin was cleared for sale in 1997 as the only drug indicated for the treatment of essential thrombocythemia, a condition characterized by excessively high levels of blood platelet cells. People with this condition are at risk for thrombosis (blood-clotting), with corresponding risk for heart attack and stroke. Subsequently, Agrylin was approved for myeloproliferative disorders.
Humatrope, ELI LILLY AND CO.'s human growth hormone, has been approved as a treatment for a third developmental growth disorder — chondrodysplasia, a problem affecting some 1,000 people in Japan. Humatrope has been available locally since 1989 and has won Lilly's subsidiary more than 20 percent of the market for growth hormones.
After announcing earlier this year that it was tying up with CHUGAI PHARMACEUTICAL CO., LTD. in order to expedite the introduction of new prescription drugs in Japan (see Japan-U.S. Business Report No. 355, April 1999, p. 13), ELI LILLY AND CO. released more details about its near-term product priorities. By yearend, its Kobe subsidiary expects to apply for MHW approval of Zyprexa (olanzapine), with the goal of having this treatment for schizophrenia on the market within two years. Evista (raloxifene HCI), a Lilly osteoporosis drug for postmenopausal women that will be handled through the alliance with Chugai Pharmaceutical, is on the same schedule.
In an ironic partnership, CORIXA CORP., which has developed novel lung cancer antigens, gave the pharmaceutical division of JAPAN TOBACCO INC. exclusive rights to commercialize vaccine and antibody-based products aimed at treating lung cancer and potentially other solid tumors. These rights extend mainly to Japan and North America. Corixa calculates that it could receive more than $40 million in license fees, research funding and milestone payments over the life of the multiyear collaboration, plus royalties on sales by JT or its partners. A significant portion of these payments is guaranteed. Corixa specializes in applying its microsphere delivery system and adjuvant technologies to the formulation of antigens.
With Japan finally ready to lift the ban on the sale of oral contraceptives, American and European makers of birth control pills are starting to map out their marketing strategies. They are moving cautiously, though, because experts are uncertain about the demand for the pill, especially at the start. Marketing tie-ups with Japanese drug companies seem to be the norm because the local sales staffs of most foreign manufacturers do not have strong links to gynecologists. For instance, MONSANTO CO.'s subsidiary will work with TSUMURA & CO., while JANSSEN-KYOWA CO., LTD. — a partnership between JOHNSON & JOHNSON and KYOWA HAKKO KOGYO CO., LTD. — is in talks with MOCHIDA PHARMACEUTICAL CO., LTD.
An exchange rate of ¥121=$1.00 was used in this report.
Businesses and individuals using SAGAWA EXPRESS CO., LTD. to deliver packages now can track their shipments in real time 24 hours a day thanks to an $82.6 million or so Internet-enabled system developed and installed by COMPAQ COMPUTER CORP.'s subsidiary. Built around a Compaq NonStop Himalaya S70000 server configured with 50 MIPS 64-bit RISC (reduced instruction-set computing) processors and 10 terabytes of storage, the system replaces mainframe computers at Sagawa Express headquarters and at 11 branches. The new hardware and software not only will enable the company to improve customer service but also to reduce operating costs. The small package delivery firm also has on order Compaq AlphaServers to provide sales support at its branches.
Four Compaq NonStop eBusiness teams have been formed to promote COMPAQ COMPUTER CORP.'s Internet-based solutions to corporate customers. Marketing is being handled by a 50-person group at headquarters. A like number of employees have been detailed to the Solution Center to provide consulting services. The Initiative Office has 10 staffers responsible for maintenance and service, while some 40 Compaq engineers, teamed as the Competency Center, are in charge of making e- business solutions a reality.
In an equally significant move, COMPAQ COMPUTER CORP., increasingly frustrated by its inability to build share in Japan's PC market, has formed a group to design products specifically for local consumer and business buyers. Compactness will be a primary design thrust. CANON SALES CO., INC., which markets Compaq PCs, will offer its insights into what will sell in Japan. The subsidiary of GATEWAY 2000, INC. reportedly has had some success in deploying the marketing strategy that the world's top PC vendor has adopted (see Japan-U.S. Business Report No. 357, June 1999, p. 16).
All the Y2K fixes might have been done, but HEWLETT-PACKARD JAPAN LTD. wants its business customers to have peace of mind about their computer systems continuing to operate smoothly as 1999 becomes 2000. Accordingly, it has launched a round-the- clock support system to answer any remaining questions that corporate clients might have. HP Japan also will have roughly 1,000 employees, including systems engineers, on duty December 31 and January 1.
With input from the BIC CAMERA CO., LTD. retail chain and NOMURA RESEARCH INSTITUTE, LTD., IBM JAPAN LTD. has developed a PC that allows consumers to buy and sell stocks over the Internet and to settle e-commerce transactions without installing specialized software. Buyers also will have access to financial services provided by NOMURA SECURITIES CO., LTD. and FUJI BANK, LTD. The IBM Japan PC will be available at Bic Camera outlets in the Tokyo region at prices running from $1,900 to $2,000.
To build its customer base in the SOHO (small office/home office) market, the subsidiary of direct marketer DELL COMPUTER CORP. is offering LAN design and installation services as well as help-desk support to buyers of its servers and PCs. Although the charge obviously varies depending on the size of the LAN, the fee for getting a system with a server and five PCs operational is about $7,100 exclusive of the hardware cost.
Several American computer vendors are experimenting with discounting, often deep, to boost sales. The marketing arm of on-the-move SILICON GRAPHICS, INC., for instance, is offering 3,000 buyers the opportunity to purchase a pair of bundled systems based on its low-end Windows NT workstation (see Japan-U.S. Business Report No. 356, May 1999, pp. 13-14) for about half of the regular list price. One package, designed for graphics-intensive applications, features the Visual Workstation 320, a 17-inch CRT monitor and 3D graphics and other software. The other, intended for digital video editing, includes the same workstation and monitor, plus a video input/output board and editing software. The Visual Workstation 320 alone normally costs $5,600. However, both packages will be priced around $4,100.
A total of 10,000 people will have the chance to participate in a DELL COMPUTER CORP.-run trial of whether discounts will sell PCs. It is marketing the Dimension V400C desktop PC with a 400-MHz Celeron processor and a 15-inch CRT monitor for $790 rather than the standard $975 or so. Likewise, the Inspiron 3500 C366GT notebook, which usually costs $2,000, temporarily will go for less than $1,700.
IBM JAPAN LTD. is taking on upstart domestic makers that are selling desktop PCs for less than $825. As part of a new, nine-model Aptiva E line, it released an entry-level system that lists for just over $1,000 — approximately $80 less than the previously least expensive Aptiva product and roughly $200 below the cheapest desktop models offered by NEC CORP. and FUJI-TSU, LTD. Included in the $1,000-plus price of the Aptiva 10J, which uses a 380-MHz AMD-K6-2 processor, are a CRT monitor, a modem, LAN capabilities, and word-processing and spreadsheet software.
The already cutting-edge performance of the Compaq NonStop Himalaya line of fault- tolerant servers, which combine a massively parallel processing architecture and RISC technology, has been boosted further without a pricing premium. A new processor module in COMPAQ COMPUTER CORP.'s S72000 server that pairs a powerful MIPS R10000 processor with 2 GB of main memory delivers operating gains of up to 20 percent in memory-intensive applications. However, the S72000 server is priced comparably to its predecessor, the S70000. In Japan, the new system with two processor modules leases for $16,500 per month.
The HP VISUALIZE Personal Workstation line of Windows NT machines that HEWLETT-PACKARD JAPAN LTD. introduced in the spring (see Japan-U.S. Business Report No. 356, May 1999, p. 15) now can be configured with a 550-MHz Pentium III processor for as little as $2,100. This series, a companion to the company's volume Windows NT-based HP Kayak PC Workstation family, draws on the HP VISUALIZE fx graphics architecture originally developed for Unix users.
For its part, DELL COMPUTER CORP. is offering the 500-MHz Pentium III Xeon processor in single or dual-processor configurations of the high-end Dell Precision WorkStation 610. The availability of this engine, the world's leading direct computer systems marketer says, should enable customers to analyze larger, more complex scientific and financial models or add greater definition to 3D graphics and digital video effects. Pricing of the minitower Dell Precision WorkStation 610 with the new Pentium III Xeon processor, a Diamond Fire GL1 graphics card from DIAMOND MULTIMEDIA SYSTEMS, INC., 64 MB of internal memory, a 4-GB hard drive, a 14X/32X CD-ROM and Windows NT 4.0 starts at $3,500, excluding a monitor. .....Buyers of the midrange Dell Precision WorkStation 410 system now also have the option of installing a Diamond Fire GL1 graphics card, which is optimized for 3D OpenGL support of dual-processor Windows NT workstations. DELL COMPUTER CORP.'s subsidiary priced a system with a 450-MHz Pentium III processor and this graphics card from roughly $2,600.
The release of the IntelliStation E Pro marked the debut of the 550-MHz Pentium III processor in IBM JAPAN LTD.'s Windows NT workstation line. This machine also is the first to feature the Diamond Fire GL1 graphics accelerator from DIAMOND MULTIMEDIA SYSTEMS, INC. The IntelliStation E Pro is available with as much as 768 MB of SDRAM memory and anywhere from 6.8 GB to 18.2 GB of storage. A basic configuration with the performance-geared new processor begins at $3,300.
GATEWAY 2000, INC.'s subsidiary has brought the latest in processor technology to its Windows NT server lines. The enterprise-class ALR 8300, which supports two processors, now can be built with a 550-MHz Pentium III Xeon engine for $5,000 and up. Likewise, the 550-MHz Pentium III chip is available in the ALR 8200, a companion server that mainly differs beyond the processor supported in the expandability of the main memory: 1 GB for the ALR 8200 versus double that for the ALR 8300. The ALR 8200 with the faster Pentium III processor starts at $4,500. Direct marketer Gateway also introduced the 550-MHz Pentium III processor in its workgroup ALR 7200 server.
Redefining the low end of the Windows NT server market, IBM JAPAN LTD. released a Japan-only product that lists for just $1,500 (excluding monitor). The Netfinity 1000 is powered by a 400-MHz Pentium II processor and comes standard with 64 MB of SDRAM memory, a 4.5-GB Ultra SCSI hard drive, a 32X CD-ROM drive and LAN connectivity.
Wearing its environmental consciousness hat, IBM JAPAN LTD. introduced in its PC710 family a pair of all-in-one desktop PCs made from recycled plastic. The Windows 95 6870-JMK, which lists for $2,700, runs off a 400-MHz Celeron processor, while the 6870-JPN, designed for the Windows NT operating environment, uses a 450-MHz Pentium III processor and costs $3,500. Both models have an integrated TFT LCD display measuring 14 inches and 15 inches, respectively.
HEWLETT-PACKARD JAPAN LTD., which returned to the corporate notebook market this spring after a three-year absence (see Japan-U.S. Business Report No. 356, May 1999, p. 16), added the lower-cost 4159 model to its OmniBook 4150 line. About $3,800 buys a system with a 300-MHz mobile Pentium II processor and 4.8 GB of hard-drive capacity. Otherwise, the mobile machine has all the standard features of more expensive OmniBook 4150 models, including a 14.1-inch TFT LCD display.
Two additions have been made to DELL COMPUTER CORP.'s Latitude line of network-optimized notebooks. The Latitude CPi R400GT is targeted at the power user. It features the new 400-MHz mobile Pentium II processor, up to 512 MB of RAM, 4 MB of AGP (accelerated graphics port) video memory, a 10X/24X CD-ROM drive and a 14.1-inch TFT LCD display. The base model is priced around $2,800. Cost-conscious corporate buyers can get all the high-end features of the Latitude CPi R400GT in the Latitude CPt C400GT for $400 less since this notebook uses the also new 400-MHz mobile Celeron processor.
Even more bells and whistles are available on GATEWAY 2000, INC.'s Solo 9150 XL corporate notebook computer. It, too, is powered by the 400-MHz mobile Pentium II processor, but the $4,000 price also buys a whopping 14.1 GB of hard-drive storage, a DVD-ROM drive and a 15-inch TFT LCD screen. For business customers interested in a thin, lightweight machine that is less pricey, Gateway has on the market the $2,700 Solo 5150. Featuring a 14-inch TFT LCD display, it runs off a 400-MHz mobile Celeron processor.
In a worldwide release, COMPAQ COMPUTER CORP. introduced its first product running Windows CE Handheld PC Professional Edition. The PC market leader also says that the Aero 8000 is the first mobile device to offer built-in Smart Card technology, which enables more secure remote access to corporate data. Priced at $1,100-plus in Japan, the Aero 8000 weighs just 2.9 pounds but has a 10-inch SVGA display and a keyboard that is 95 percent the size of a standard notebook keyboard. Among other selling points, its battery life extends up to 13 hours. HITACHI, LTD.'s 128-MHz SH4 processor powers the Aero 8000, which can be configured with up to 64 MB of SDRAM memory.
By yearend, HEWLETT-PACKARD JAPAN LTD. plans to release a localized version of its parent's Jornada 420 personal digital assistant or personal organizer. The handheld device, which supports the Windows CE for the Palm-Size operating system, has fewer features than PDAs made by several leading Japanese makers, but it will be priced below those products as well as the $500 list of the Jornada 420 in the United States.
Success sometimes has a price. For APPLE COMPUTER, INC.'s subsidiary, the popularity of the iMac home computer is forcing it to expand its customer support channels. The company plans to install a Customer Information Line to provide product information to potential buyers. Its proposed Macintosh Support Center will offer user support and answer technical questions, while the AppleCare Support Line will broaden Apple's fee-based support services.
The marketing arm of APPLE COMPUTER, INC. is hoping that the success of the iMac will carry over to its commercial line. That now includes two new Macintosh Server G3 configurations and four more Power Macintosh G3 desktop machines, all of which incorporate PowerPC G3 processors running up to 23 percent faster than their predecessors and use the new Mac OS 8.6 operating system. The pair of servers, which come with AppleShare IP 6.2 integrated server software, sport either a 400-MHz or a 450-MHz processor. They cost $3,500 and $5,100, respectively. The four desktop machines list for $1,600 to $3,200. They offer a choice of 350-MHz, 400-MHz and 450- MHz PowerPC G3 processors, 64 MB or 128 MB of internal memory, 6 GB, 9 GB or 12 GB of storage and a ATI RAGE 128 graphics card with 16 MB of graphics memory.
Changing its Japan marketing strategy, EMC CORP., the world's premier enterprise- level storage provider, has tied up with six major systems integrators. The company currently generates 60 percent to 70 percent of its local business through direct sales and OEM deals. In time, it hopes that ITOCHU TECHNO-SCIENCE CORP., NTT DATA CORP., NOMURA RESEARCH INSTITUTE, LTD., TOYO INFORMATION SYSTEMS CO., LTD. and the two other systems integrators will produce as much as 80 percent of revenues, which EMC projects will expand at an annual clip of more than 40 percent.
IT managers that want to build separate SANs (storage area networks) to offload backup from production networks have a fast way to do that. The HP SureStore Fibre Channel SCSI Bridge 2100 ER supports fully automated backup of as many as eight Windows NT 4.0 servers, each containing 20 GB to 70 GB of data, via a Fibre Channel network to a HP SureStore DLT 4000/7000 digital linear tape library. HEWLETT-PACKARD JAPAN LTD. hopes to sell 250 bridges a year. It priced the product at $10,300.
This fall, small and midsize networks will be able to complete backups faster than ever and more affordably using a digital audio tape format. That is the promise HEWLETT- PACKARD CO. holds out for the HP SureStore DAT40 DDS-4 tape drive. The forthcoming product features a transfer rate of up to 6 MB a second of compressed data — the highest performance, according to HP, of any DDS-4 (digital data storage) drive. The HP SureStore DAT40 also will include the company's recently introduced One-Button Disaster Recovery feature for integrated, full-system restoration. In Japan, the drive is expected to sell for about $2,500.
The developer of the high-capacity ORB internal or external drive named Tokyo's SHINNICHI ELECTRONICS CORP. as its exclusive distributor. Pleasanton, California- headquartered CASTLEWOOD SYSTEMS, INC.'s magnetoresistive-head drive uses removable media with a capacity of 2.2 GB, reportedly more than any other product in this class. Moreover, it transfers data as fast as 12.2 MB per second, again said to be tops in the removable media category. Those features make ORB well-suited for fast backup and storage of large files and digital data. The two versions of the drive, including one 2.2-GB ORB disk, cable and power supply, cost $245 or $270. Purchased separately, the ORB disk goes for about $40.
The competing DataBook external storage system from DATAZONE CORP. of San Jose, California will be available exclusively in Japan and nonexclusively elsewhere in Asia through trader MATSUBO CO., LTD. Designed specifically for road warriors, DataBook, which is the size of a videocassette tape and weighs just 7 ounces, has an extremely high shockproof rating. It is offered in capacities of 4 GB to 14 GB.
The target of both of these manufacturers, IOMEGA CORP., released a Japanese- language version of its Zip 250 external drive along with 250-MB Zip disks. The SCSI- interface model of the drive, which also works with older 100-MB Zip disks, has a top data transfer rate of 2.4 MB per second. The Zip 250 has an estimated street price of $245.
INTERNATIONAL BUSINESS MACHINES CORP. manages to cram more capacity into hard drives while making them smaller and lighter. Its latest innovation is the IBM 340-MB microdrive, which is designed for use in digital cameras as well as in handheld and notebook computers. It can hold the equivalent of more than 200 standard-size floppy disks. IBM already is shipping the microdrive to a number of Japanese OEM customers, including CASIO COMPUTER CO., LTD., CLARION CO., LTD., HITACHI, LTD., MINOLTA CO., LTD., NIKON CORP. and SANYO ELECTRIC CO., LTD. The microdrive also will be available in stores shortly for about $480, which includes the 340-MB drive, a PC Card adapter and a field case.
Business presenters increasingly want smaller, more versatile projectors. INFOCUS SYSTEMS, INC. hopes to capitalize on this demand by supplying its ultraportable (under 10 pounds) or personal data/video projectors to TOSHIBA CORP. on an OEM basis. The nonexclusive agreement also calls for future technology exchanges between the Wilsonville, Oregon manufacturer and the big electronics company.
NEC CORP., the PC market leader in Japan, is using VERIDICOM, INC.'s OpenTouch fingerprint authentication technology to provide a higher level of security in two new lines of commercial desktop and notebook systems. Replacing passwords and user identifications in the log-in process and other privacy functions, the Santa Clara, California company's sensor-based technology uses a fingerprint template for authentication. OpenTouch is available on seven models of the VersaProNX series of notebooks and on 10 models of the MateNX family of desktop products.
In its latest HITACHI, LTD. design win, 3DLABS, INC. is supplying its Oxygen VX1 graphics accelerator for the new high-end Flora 410 workstation. Although it is the entry-level graphics accelerator for this product, the Sunnyvale, California company says that its board will enable the Flora 410 to deliver cost-effective, high-performance OpenGL acceleration for a wide range of graphics-intensive, professional computer- aided design and content-creation applications.
An exchange rate of ¥121=$1.00 was used in this report.
After 10 months of negotiations, CHELSEA GCA REALTY, INC. finalized an agreement with MITSUBISHI ESTATE CO., LTD. and NISSHO IWAI CORP. to jointly develop, own and operate upscale, fashion-oriented outlet centers. The Roseland, New Jersey operator of 19 manufacturers' outlet centers in the United States has a 40 percent interest in CHELSEA JAPAN CO., LTD. and will contribute leasing, design and operations expertise to the venture. Its partners, which split the other 60 percent, will manage development and construction activities as well as handle leasing. Chelsea Japan's first project will be in Gotemba, Shizuoka prefecture. Gotemba Premium Outlets will be developed in two phases with approximately 220,000 and 200,000 square feet of leasable space in each stage. Work on the $41.3 million or so first phase is scheduled to start this summer, with the opening tentatively set for the summer of 2000.
An exchange rate of ¥121=$1.00 was used in this report.
The latest generation of DVD players from HITACHI, LTD. incorporates N-2-2 virtual surround sound technology from SPATIALIZER AUDIO LABORATORIES, INC. This was the second recent Japanese design win for the Woodland Hills, California company's virtual surround sound technology. Earlier, TOSHIBA CORP. licensed N-2- 2 for its DVD models.
SUMITOMO 3M LTD. has on the market a pair of plastic optical-fiber lighting fixtures that it developed that put out as much light as standard fluorescent bulbs. Light sources at both ends of the 3M Light Fiber Strong Side Light illuminate the fiber, causing light to radiate outward. Special film in the fiber controls the direction of the light as well as the amount emitted. Depending on the light's intensity, the product costs either $50 a foot or $63 a foot.
In the 20 months since extremely longtime partners HONEYWELL INC. and YAMATAKE CORP. (formerly Yamatake-Honeywell Co., Ltd.) basically decided to go their own ways in the home and building controls and industrial automation businesses, the Minneapolis manufacturer, a giant in these fields, has been looking for new marketing channels in Japan. It found one in TOSETSU CO., LTD. The Tokyo- based company has rights to market in the Kanto region and the Niigata area such Honeywell products as temperature and humidity sensors, damper controllers and building air system controllers. These products, Tosetsu estimates, should produce sales of $1.1 million in the first year and $2.5 million the following year.
Under a five-year arrangement, AIM ENERGY INC. licensed SHINDENGEN ELECTRIC MANUFACTURING CO., LTD. to make its harmonic filters for marketing in Japan as well as in the People's Republic of China and Indonesia. AIM's filters mitigate the harmonic current distortion or so-called electrical pollution produced by computers, fax machines, copiers, fluorescent lighting and motor speed control devices. Left untreated, the subsidiary of Signal Hill, California-based TRI-LITE INC. says, harmonic distortion can damage buildings and other facilities and even the power grid. Shindengen paid AIM $1 million for the technology license and for an initial run of 50 filters.
Zipper manufacturer YKK CORP.'s Kurobe, Toyama prefecture plant, already the company's most energy-efficient facility, will be the first Japanese factory to install energy-conservation equipment supplied by ENERGY AUTOMATION SYSTEMS, INC. of Hendersonville, Tennessee. The contract, arranged by exclusive EASI distributor JAPAN SAVING ENERGY PLANNING CO., LTD. (see Japan-U.S. Business Report No. 350, November 1998, p. 16), includes a product that aligns the phase angle of the current supplied to a motor and its voltage, in the process cutting wasted energy without any sacrifice of horsepower or revolutions per minute. The other part of the order involves a fluorescent light controller that regulates all the lights on a circuit breaker and reduces the power consumed.
An exchange rate of ¥121=$1.00 was used in this report.
In a deal that should go a long way toward its goal of building market share, MOBIL SEKIYU K.K. has a long-term contract to supply gasoline, gas oil, kerosene and A- grade fuel oil to Zennoh (National Federation of Agricultural Cooperative Associations). The agricultural giant operates close to 10 percent of Japan's gas stations. As many as 2,500 of these 4,845 outlets now sell petroleum products under Zennoh's private brand. That is how Mobil Sekiyu's gas and other refined products are being marketed. The wholly owned MOBIL CORP. subsidiary also has an oil products supply contract with Hokkaido's agricultural cooperative movement that recently was expanded. Mobil Sekiyu owns part of two Japanese refiners: TONEN CORP. (25 percent) and KYOKUTO PETROLEUM INDUSTRIES, LTD. (50 percent).
Aiming to reduce their distribution costs by anywhere from $4.1 million to $8.3 million a year, EXXON CORP. affiliates ESSO SEKIYU K.K. and GENERAL SEKIYU K.K. have agreed with SHOWA SHELL SEKIYU K.K. to increase the volume of gasoline and middle distillates they swap among themselves. Under a new 10-year accord, the traded amount will expand to 528 million gallons a year from about 317 million gallons now. Some 20 refineries and distribution terminals will be affected by the deal, although the three companies have not decided exactly which of their facilities will be part of the swap arrangement. Esso Sekiyu and General Sekiyu have combined a number of operations in order to become more efficient (see Japan-U.S. Business Report No. 353, February 1999, p. 16).
An exchange rate of ¥121=$1.00 was used in this report.
An electronic stock market modeled after the NASDAQ automated quotation system will be operating in Japan during the fourth quarter of 2000. At least that is the hope of the NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC., the manager of NASDAQ, and SOFTBANK CORP. They set up equally owned NASDAQ JAPAN PLANNING CO., LTD. to get the project off the ground. The envisioned over-the- counter market, which will be open for business around the clock and which will make extensive use of the Internet, will give Japanese investors the chance to buy and sell many of the world's high-growth stocks at the click of a mouse button. NASD and Softbank anticipate that local investors will have access to the more than 5,000 stocks listed on NASDAQ and to such indexed products as the NASDAQ-100 Index Tracking Stock as well as to Japanese companies that choose to list on NASDAQ Japan. The latter option has a flip side that NASD and Softbank also are touting: NASDAQ Japan will help Japanese start-ups and small companies raise equity capital. A number of major obstacles stand in the way of NASDAQ Japan's launch, however. The Japan Association of Securities Dealers, which runs the JASDAQ OTC market, and the Tokyo Stock Exchange are certain to oppose NASDAQ Japan because of the business they would lose. Regulators also might oppose the strict, U.S.-style disclosure rules that NASDAQ Japan plans to impose for fear that they might undermine confidence in other Japanese exchanges. Moreover, NASD and Softbank must line up a minimum of six market makers among Japanese and foreign securities firms.
The first on-line investment banking firm in the United States also will have that distinction in Japan. WIT CAPITAL GROUP, INC. is forming a company with MITSUBISHI CORP., which has a small stake in the Manhattan-headquartered firm (see Japan-U.S. Business Report No. 350, November 1998, p. 5), and TRANS COSMOS INC. Once the joint venture receives a securities license, it will give Japanese consumers the opportunity to invest in public offerings and venture capital funds by going on-line. Wit Capital's Japanese affiliate also will provide a variety of investment banking services to Internet and Internet-centric companies in Japan, including underwriting for public offerings, private equity services, advice and research.
The complete deregulation of brokerage commissions coming October 1 has lured another American financial services heavyweight into the Japanese market. CHARLES SCHWAB & CO., INC., the top discount broker as well as the number-one on-line trading company, has agreed with TOKIO MARINE & FIRE INSURANCE CO., LTD. and several other local investors to establish a full-service brokerage firm to serve individual investors. Due to be in business this fall, CHARLES SCHWAB TOKIO MARINE SECURITIES CO., LTD. initially plans to offer trading in U.S. stocks and bonds and Japanese and offshore investment trusts (Japanese-style mutual funds) via a Web site as well as through a 24-hour telephone service center and a branch office in Tokyo. Trading in Japanese stocks is expected to start in early 2000. Schwab will have a 50 percent interest in the joint venture and will manage day-to-day operations. Tokio Marine & Fire, Japan's biggest nonlife insurer, will own 35 percent of the partnership, with BANK OF TOKYO-MITSUBISHI, LTD., MEIJI MUTUAL LIFE INSURANCE CO. and MITSUBISHI TRUST & BANKING CORP. each having a 5 percent stake. E*TRADE GROUP, INC. and a DONALDSON, LUFKIN & JENRETTE INC. affiliate also will begin on-line trading once commissions are deregulated.
The first year of running a nationwide, full-service retail brokerage in Japan proved to be even rockier than MERRILL LYNCH & CO., INC. had anticipated when it started this operation by taking over much of bankrupt YAMAICHI SECURITIES CO., LTD.'s branch network and staff. However, the giant brokerage house remains upbeat about the Japanese market despite a loss of $206.6 million or so in the 12 months through March 31, 1999. Over the next two to three years, Merrill Lynch expects to boost its payroll to about 3,000 people from the current total of 2,100, including 1,100 financial consultants, to expand business. It now has nearly $5.4 billion in client assets through 46,000 accounts.
ADVISORTECH CORP., which provides back-office support for financial planners over the Internet, has brought its services to Japan. The San Francisco company, itself a start-up, formed a pair of companies, one of which will help independent financial planners through such work as information on investment vehicles, portfolio planning models and account maintenance. Japan now has roughly 40,000 independent investment advisers compared with less than 5,000 in 1995. Although this subsidiary is focused on independent advisers, Advisortech reports that interest in its services from financial institutions is quite strong.
Ten months after it tied up with MITSUI TRUST AND BANKING CO., LTD. to offer investment trust products to individual investors, PRUDENTIAL INSURANCE CO. OF AMERICA is ready to provide asset management services for Japanese defined benefit pension plans and especially for the defined contribution plans that are expected to be the norm in the future. It will develop, market and distribute pension products through PRUDENTIAL INVESTMENT ADVISORY CO., LTD., which until now primarily has served U.S. retirement plans and mutual funds investing in Japan.
The investment management units of METROPOLITAN LIFE INSURANCE CO. and ASAHI MUTUAL LIFE INSURANCE CO. have formed a previously announced company to manage money for institutional and individual Japanese investors (see Japan-U.S. Business Report No. 354, March 1999, p. 19). Boston's NVEST COS., L.P. has a 49 percent interest in ASAHI NVEST INVESTMENT ADVISORY CO., LTD., with the balance owned by partner ASAHI LIFE INVESTMENT MANAGEMENT CORP. The joint venture will start off by managing roughly $1 billion in assets for ALIMCO, although Nvest is expected to make most of the decisions about how this money is invested.
Thanks to deregulation, American financial services providers are giving institutional and individual investors alike a wider range of investment choices, although many of these vehicles involve a relatively high degree of risk. For instance, CITIBANK N.A. will offer accounts with interest rates tied to the ups and the downs of domestic and foreign stock exchanges. The huge bank also is the first such institution to be licensed to handle over-the-counter derivatives, including those linked to unlisted stocks. For its part, SALOMON SMITH BARNEY INC.'s asset management affiliate has a fund designed mainly for corporate and institutional investors on which the target yield is adjusted twice a year. KOKUSAI SECURITIES CO., LTD. is marketing the product. This major second-tier brokerage house also partnered with BANKERS TRUST CORP.'s local fund management unit to introduce the first investment trust product in Japan that invests in foreign over-the-counter currency, stock and interest rate options. The fund's riskiness is limited, however, since only 10 percent of its assets go into options; the rest is invested in conservative instruments.
The Tokyo branch of AMERICAN EXPRESS FINANCIAL ADVISORS INC., which opened its doors in March, has added four investment trust products to the two it initially marketed to AMERICAN EXPRESS CO. cardholders. At the end of May, AEFA had attracted 3,000 brokerage accounts from among AmEx's 1 million-plus cardholders in Japan.
Venture capital firm RIPPLEWOOD HOLDINGS LLC, which has made a name for itself as a corporate turnaround specialist, is organizing a $1 billion fund to invest in Japanese companies, mainly manufacturers, that are floundering now but have prospects for growth through better management and, ultimately, for going public and reaping capital gains for the fund participants. MITSUBISHI CORP. will be the lead backer of the 10-year RHJ Industrial Partners Fund, putting up $200 million of the capital. Ripplewood hopes to enlist other Japanese institutional investors as well as American and European ones. The fund plans to invest in one company a year. A recently formed Mitsubishi subsidiary will advise the fund's management team on possible targets. The trader has a 10 percent stake in New York City-based Ripplewood that it acquired at the start of 1996.
M&A INTERNATIONAL, INC. has brought into its global network of independently owned merger and acquisition and investment banking firms two local operations. The new members are KAMAKURA CORP., an international financial advisory company that is headquartered in Kanagawa prefecture, and the Tokyo office of New York City's MORGEN, EVAN & CO., INC., an investment bank that specializes in transpacific business relationships. With these additions, the M&A International team, which communicates with each other via a secure intranet, is better positioned to advise on M&As and joint ventures involving Japanese companies as well as to help Japanese clients divest businesses or otherwise restructure.
The recent surge in securitization in Japan and the concomitant need for experienced backup servicers to enhance the credit ratings of these issues have meant new business for at least two American companies. The hard-charging subsidiary of GMAC COMMERCIAL MORTGAGE CORP. (see Japan-U.S. Business Report No. 356, May 1999, p. 19) was named the backup to primary servicer SANWA BANK, LTD. on the country's first securitization of residential mortgages. The $450 million offering is collateralized by mortgages originated by the nationwide commercial bank on more than 5,000 single-family homes. In addition, a recently established alliance between a CHASE MANHATTAN CORP. affiliate and NIPPON SHINPAN CO., LTD., Japan's top consumer finance company, has won its first backup servicing job. The Chase unit is the official backup servicer, but Nippon Shinpan actually will handle collections and other functions should the unnamed primary servicer fail to carry out its obligations. The new partners see considerable potential in their tie-up, not just due to the growth in the market for asset-backed securities but also because of Chase's expertise in securitization and Nippon Shinpan's track record in collecting credit-card receivables.
In a move intended to make its Japanese auto leasing business more competitive, GE CAPITAL CORP. is rationalizing the operations of JAPAN LEASE AUTO CORP. and GE CAPITAL CAR SYSTEMS CORP. The financial services giant acquired Japan Lease Auto, which ranks number two in the field, at the beginning of 1999 (see Japan- U.S. Business Report No. 353, February 1999, pp. 16-17). It purchased an 80 percent interest in what became GE Capital Car Systems in 1996 and recently bought out the remaining shareholders to make the company a wholly owned subsidiary. After the consolidation, Japan Lease Auto will handle vehicle leasing for corporate clients, while GE Capital Car Systems will deal with small businesses and individuals. Some downsizing of the combined operation's roughly 650 employees is expected.
The second bank that Tokyo nationalized last fall also has chosen an American heavyweight to help it find a buyer for its operations. NIPPON CREDIT BANK, LTD. appointed MORGAN STANLEY DEAN WITTER & CO. to act as its financial adviser. GOLDMAN, SACHS & CO. serves in the same capacity for LONG-TERM CREDIT BANK OF JAPAN, LTD.
Giving new meaning to the term personalized service, AMERICAN EXPRESS INTERNATIONAL INC. and REPUBLIC NEW YORK CORP. are teaming up to provide home delivery of foreign currency and traveler's checks. People will be able to have cash in any of 36 denominations and traveler's checks denominated in nine currencies brought to their home or office simply by making arrangements at participating financial institutions and travel agencies. Republic already offers home delivery of foreign currency, but this service is a new one for AmEx.
An exchange rate of ¥121=$1.00 was used in this report.
Maxim instant and regular coffee is getting its first make-over in 10 years. AJINOMOTO GENERAL FOODS INC. has invested $8.3 million in its Mie prefecture factory to change the way the product is produced and to introduce new packaging. Backed by twice as money for advertising, the goal is to boost Maxim sales by 20 percent in an increasingly competitive marketplace.
An exchange rate of ¥121=$1.00 was used in this report.
What supplier MARKEM CORP. calls the first real alternative to preprinting cartons used for packaging in manufacturing plants is available in Japan. The computer- controlled MARKEM 5000 Series Case Coder is a large-character ink-jet system that can print high-resolution images, including circular graphics and logos, as well as scannable bar codes directly onto a carton with, it is claimed, the same clarity as preprinted boxes. EDM CO., LTD. is marketing the Keene, New Hampshire company's system, which is priced between $12,400 and $20,700.
An alternative to diamond scribing for cutting glass also is on the market. PRECISION TECHNOLOGY CENTER tapped KYOWA RIKA CO., LTD. to distribute its laser-based cutting machines, which incorporate the Lake Mary, Florida company's zero width cutting technology. Laser-based cutting machines provide a way to cut glass cleanly, without leaving debris or particulate waste, and potentially to eliminate edge-finishing steps. Those capabilities are of special interest to makers of such products as flat- panel displays and glass for hard-disk platters.
Through EUROACT B.V., a Tokyo consulting firm, VERSACORE INDUSTRIAL CORP. is offering manufacturers of honeycomb an easier, more flexible and less expensive way to make this three-dimensional, rigid, hollow material for strong but lightweight composite materials. The key to these breakthroughs, the Kennett Square, Pennsylvania firm says, is its honeycomb core process technology, which involves a continuous, automated corrugation method. VersaCore does not make production equipment or honeycomb. It only licenses the manufacturing technology and also distributes the special adhesives used in the VersaCore process.
Old-line manufacturers like CATERPILLAR INC. are no slouches when it comes to innovation — or to exploiting market opportunities, in this instance created by the growth of the public works market. Through SHIN CATERPILLAR MITSUBISHI LTD., it introduced the Cat 769D and the Cat 773D off-highway trucks after a redesign that improved serviceability, operator comfort and efficiency. Intended for high production and low-cost-per-ton hauling in a range of construction and mining applications, the 769D has a payload capacity of 41.1 tons, while the 773D can carry as much as 58.4 tons. The smaller-capacity truck lists at $446,300 and its bigger cousin at $673,600. Shin Caterpillar expects to sell a total of 65 of the updated off-highway trucks a year.
An exchange rate of ¥121=$1.00 was used in this report.
A 30 percent share of the photographic film market by 2003. That is the ambitious goal of EASTMAN KODAK CO. for Japan, where it now accounts for 10 percent or so of film sales. A pivotal part of Kodak's strategy for taking share from archrival FUJI PHOTO FILM CO., LTD. is to install this fall its easy-to-use, easy-to-maintain On-Site Lab film processing center at some 200 nontraditional locations around the country (see Japan-U.S. Business Report No. 357, June 1999, p. 20).
New products obviously are just as critical to the success of EASTMAN KODAK CO.'s strategy. It especially has a lot riding on the new Kodak Gold 400-speed film, which the company already described as offering the world's best combination of color saturation, color accuracy and sharpness in 35-mm consumer films. The latest version of this key product incorporates Kodak's color precision technology to deliver more natural skin tones. Pricing is open on the Kodak Gold 400 film. It also is on a new disposable camera that comes in three different designs and that features a built-in flash with a range of about 16 feet.
EASTMAN KODAK CO. also hopes to build sales among professional photographers with a line of color negative film that brings consistency to prints across film speeds. Kodak Professional Portra film gives these customers a choice of film speed (ISO 160 or ISO 400) and color saturation — either natural color for controlled lighting situations or vivid color for more brilliant colors. The 36-exposure roll of Kodak Professional Portra 160NC film costs $6.30, for example.
Digital cameras might not boost sales of traditional film, but they do raise name and brand awareness. EASTMAN KODAK CO.'s subsidiary is marketing two new such products. The DC280J Zoom is equipped with a charge-coupled device that provides a resolution of 2.3 million pixels versus the 1.3 million pixels of the last product introduced in this line, the DC240. It also features a wide-angle, 2X zoom lens, automatic focus and exposure correction and a start-up time of just two seconds. Pictures can be taken at the rate of one per second. The other product provides a new wrinkle in photography. The GPS-260 combines Kodak's DC260 Zoom digital camera with GPS (global positioning system) technology from GARMIN INTERNATIONAL, INC. of Olathe, Kansas. That allows location information to be recorded for each picture. The $3,800 camera is expected to find a market in such fields as civil engineering.
TEXAS INSTRUMENTS INC.'s digital light processing technology (see Japan-U.S. Business Report No. 356, May 1999, pp. 18-19) has found a new application. It is at the heart of a digital printer that TI and NORITSU KOKI CO., LTD. developed for the minilab king's first all-digital compact photo processing systems. As in other uses, the DLP technology digitally controls image projection. In the Noritsu printer, it minimizes light loss and enhances printing clarity and speed, which is twice as fast as existing models. The QSS-2801 Digital and QSS-2802 Digital minilabs will be launched in September. The latter system can print 2,580 pictures measuring 3.5 x 5 inches an hour.
An exchange rate of ¥121=$1.00 was used in this report.
A 5-ton-a-day commercial plasma waste converter built by STARTECH ENVIRONMENTAL CORP. of Wilton, Connecticut will be installed at Hiroshima University for processing industrial hazardous wastes. Hiroshima-based EBS SANKO CO., LTD., the actual buyer, also will use the system to demonstrate how chemical weapons can be safely and irreversibly destroyed as part of a Sino-Japanese demilitarization program as well as for radioactive waste applications. Startech's plasma waste converter remediates and processes both hazardous and nonhazardous wastes through a system of molecular dissociation and closed-loop elemental recycling.
For the last 10 years, COGNEX CORP. has supplied machine vision systems to SHINKAWA LTD., a major maker of wire bonding, die bonding and tape bonding equipment for the semiconductor industry. That long relationship resulted in the largest single order ever received by the Natick, Massachusetts company, the world leader in machine vision technology. Moreover, Shinkawa's $11.8 million contract came just a month after it placed a $350,000-plus order with Cognex. All of the equipment should be delivered by the spring of 2001. In Shinkawa's bonding machines, Cognex vision systems guide and monitor the bonding process by automatically determining where the connections are to be made between the semiconductor die and the lead frame.
HEWLETT-PACKARD JAPAN LTD. gave TOYO CORP., a major distributor of electronic measuring instruments, especially foreign-made ones, exclusive rights to localize, market and support the HP WireScope line of portable devices for inspecting LAN cables. The Tokyo company already is marketing the English-language version of the WireScope 350, which measures frequencies up to 350 MHz and can handle new cable standards. A Japanese version of the $9,900 device, which has a color LCD touch panel, should be released in August. Toyo is looking for combined first-year sales of roughly 300 units.
In one of its first major Japan moves since becoming a freestanding analytical instruments compa