Work should start within the next few months on SHIN-ETSU CHEMICAL CO., LTD.'s $250 million or so polyvinyl chloride plant in Addis, Louisiana, near Baton Rouge (see Japan-U.S. Business Report No. 349, October 1998, p. 2). The world's top manufacturer of PVC intends to complete plant construction as soon as possible but no later than the fall of 2001 to meet the steady increase in American demand for the versatile plastic. The Louisiana factory, which will source PVC building blocks from a nearby DOW CHEMICAL CO. facility rather than make them itself, will have an annual production capacity of 1.3 billion pounds. It will be operated by SHINTECH INC., Shin- Etsu Chemical's 25-year-old manufacturing unit in Freeport, Texas. PVC production capacity there is 3.2 billion pounds a year.
TEIJIN LTD. and E.I. DUPONT DE NEMOURS & CO., INC. finalized a pending deal to combine their global polyester film operations effective October 1 (see Japan-U.S. Business Report No. 354, March 1999, p. 2). Seven joint ventures will be formed under the control of what the partners are calling a Global Policy Board. They will employ roughly 4,000 people and have a combined annual production capacity of as much as 375,000 tons, tops in the world. Wilmington, Delaware-head-quartered DUPONT TEIJIN FILMS U.S. LP, in which Teijin and DuPont each will have a 49.9 percent interest, will take over the American multinational's polyester film manufacturing and marketing business in the United States as well as an existing Teijin-DuPont polyester film venture. TEIJIN DUPONT FILMS JAPAN LTD. will be responsible for the Japan side of the tie-up. Teijin will own 50.1 percent of this Tokyo- based company. The other joint ventures will be established in Scotland, Luxembourg, the Netherlands, Indonesia and the People's Republic of China. The European operations will be equally owned. Teijin will be the majority owner of the Indonesia company, while the reverse will be true for the Chinese firm.
For TORAY INDUSTRIES, INC., which ranks second only to E.I. DUPONT DE NEMOURS & CO., INC. as a world manufacturer of polyester film, engineering plastics represent a U.S. growth market because of expanded onshore production by automotive makers and other Japanese customers. It hopes to double sales of these products to $30 million in FY 2002. The first step toward this goal is making MONTOR PERFORMANCE PLASTIC CO. a wholly owned marketing unit. This Troy, Michigan company, formed in 1989, was set up on an equal basis by Toray and what became SOLUTIA INC. As TORAY RESIN CO., it will handle such engineering plastics as nylon (which Solutia will continue to supply) and ABS (acrylonitrile-butadiene-styrene), targeting sales at American automotive makers as well as continuing to cultivate business among Japanese manufacturers operating in the United States.
Although toner resin and ink-jet materials manufacturer and marketer POLYTRIBO INC. is profitable, partners FUJIKURA KASEI CO., LTD. (40 percent) and ROHM & HAAS CO. (60 percent) decided to transform the Bristol, Pennsylvania company into a toner resin marketing outfit wholly owned by the Japanese parent. Formed in 1985, Polytribo began to make toner resins in 1988 at Rohm & Haas' Bristol plant. In 1996, it entered the ink-jet materials business, supplying pigment dispersions for use in pigmented ink-jet inks. As part of the restructuring, Rohm & Haas, a Philadelphia- based specialty chemical company, acquired the ink-jet materials business. It will continue to make toner resins for marketing by Polytribo to Japanese-affiliated companies in the United States manufacturing copier toner.
Silicone rubber manufacturer ASAHI RUBBER INC. and ESSEX SPECIALTY PRODUCTS, INC., which is strong in adhesives and sealants, are collaborating on automotive-use sealants. At the start, they will exchange product and process technologies for sealant materials, moving on later to final products. The globalization of the automotive industry is behind the tie-up. Asahi Rubber recently formed a U.S. subsidiary to market color silicone rubber caps to vehicle makers (see Japan-U.S. Business Report No. 357, June 1999, p. 12). Auburn Hills, Michigan Essex is a DOW CHEMICAL CO. subsidiary.
To accelerate its drug discovery efforts, DAIICHI PHARMACEUTICAL CO., LTD. contracted with AXYS PHARMACEUTICALS, INC. to obtain a diverse compound screening library consisting of small molecule compounds created through the South San Francisco, California company's combinatorial chemistry technologies. The three- year deal calls for payments to Axys in excess of $10 million.
An eighth Japanese drug company will tap the expertise of PROTEIN DESIGN LABS, INC. Under a research agreement with FUJISAWA PHARMACEUTICAL CO., LTD., which is seeking a new approach to the treatment of certain diseases in the inflammatory and immunological fields, the Fremont, California firm will engineer humanized antibodies targeted at these problems.
The Food and Drug Administration approved for marketing a third drug to help people with adult-onset or Type II diabetes use more effectively the insulin their body produces. ACTOS (pioglitazone hydrochloride) was commercialized by TAKEDA CHEMICAL INDUSTRIES, LTD. It will be marketed by the big drug company's New York City subsidiary and ELI LILLY AND CO. (see Japan-U.S. Business Report No. 356, May 1999, p. 2). People prescribed ACTOS only will have to take it once a day. Moreover, they can take it at any time, with or without food. In another plus for the drug, it can be used in combination with three other diabetes-fighters as well as alone. Analysts expect ACTOS to be a big seller for Takeda Chemical.
TAKEDA CHEMICAL INDUSTRIES, LTD. also could have a Viagra-type blockbuster on the U.S. market sometime in 2000. TAP PHARMACEUTICALS INC., the company's long-standing joint venture with ABBOTT LABORATORIES, filed a new drug application with the FDA for UPRIMA (apomorphine HCI) for the treatment of male erectile dysfunction. The drug affects the central nervous system in the brain to provide sexual stimulation.
Clinical trials of two EISAI CO., LTD. compounds have started in the United States. E5564, discovered and synthesized by EISAI RESEARCH INSTITUTE in Andover, Massachusetts, is a Lipid A antagonist that is being investigated as a potential treatment for sepsis and septic shock. No effective drug therapy currently exists for sepsis, a toxic condition resulting from the spread of bacteria from an infection site. E1010, a product of Eisai's research laboratories in Japan, is a carbapenem antibiotic.
In a first for BANYU PHARMACEUTICAL CO., LTD., three drug candidates developed in-house are undergoing clinical testing in the United States. The pharmaceutical firm tied up with a contract research organization to conduct human trials on J-107088, an indolo-carbazole antitumor drug being investigated as a cancer treatment. On the other two candidates — J-104132, an endothelin receptor antagonist thought to be effective for hypertension, and J-104135, a muscarine M3 receptor antagonist — Banyu is working with its majority stockholder, MERCK & CO., INC. If the efficacy of any of these possible therapies is verified during the clinical testing process, which is at the Phase I or the Phase II point, the American drug powerhouse would handle international marketing, paying royalties to Banyu.
Like Japan's top pharmaceutical manufacturers, second-tier drug companies have set their sights on the American market. The attraction is not just the sales potential of clinically successful products but an approval process that is relatively faster than Japan's. Any number of recent examples highlight this reality. For instance, SUNTORY LTD., which has been in the drug business for two decades, formed a subsidiary to oversee clinical testing of two compounds, one for cerebral-vascular disease and the other for immunodeficiency problems, for both the American and the Japanese markets. SUNTORY PHARMACEUTICAL, INC., which likely will set up operations in New York City or northern New Jersey, hopes to win FDA marketing approval for these drug candidates in 2004. The big whiskey manufacturer also has identified other products in its development pipeline that it wants to submit for U.S. clinical testing.
Like the whiskey maker, AJINOMOTO CO., INC. has identified pharmaceuticals as a strategic business and hopes the regulatory process and sales potential of the United States will help it achieve this diversification. Recently established AJINOMOTO PHARMACEUTICALS USA, INC. of Hackensack, New Jersey will oversee Phase II/III/IV clinical testing of AT-1015, a prospective antithrombosis drug, starting within this year. It also will handle licensing of Japan-discovered compounds. On Ajinomoto's U.S. agenda as well is the marketing of Fastic before the end of 2000. This diabetes medication is targeted at people with fairly mild symptoms. It is designed to curb rises in blood-sugar levels following meals.
Signaling its new emphasis on the American market, NIPPON SHINYAKU CO., LTD. transformed its New York City liaison office, opened in October 1997, into a subsidiary. NS PHARMA, INC.'s mandate is to strengthen the drug maker's U.S.-based clinical development system and to explore business development opportunities. Nippon Shinyaku is strong in urological drugs.
Before the end of 2001, YOSHITOMI PHARMACEUTICAL INDUSTRIES, LTD. hopes to have in hand FDA approval to market what the midsize drug company calls its first world-class product. Circulase (AS-013 in lipid emulsion), developed by Los Angeles subsidiary ALPHA THERAPEUTIC CORP., is being studied for the prevention of limb amputation in patients with severe ischemia, a problem caused by the obstruction of the inflow of arterial blood. Phase II/III trials are underway. Yoshitomi Pharmaceutical also hopes to launch in the United States in coming years two products that are under development in its own laboratories.
GEN-PROBE INC. — a CHUGAI PHARMACEUTICAL CO., LTD. subsidiary well-known for its genetic probe-based diagnostic products — received nonexclusive worldwide rights to apply AMBION, INC.'s Armored RNA (ribonucleic acid) technology to products and processes for human clinical diagnostic uses. A major application for the Austin, Texas company's know-how is the production of viral assays of RNA controls and standards that withstand exposure to ribonucleases and long-term storage in serum or plasma. San Diego, California Gen-Probe is developing viral nucleic acid tests for screening the blood supply for HIV-1 and 2 and hepatitis B and C viruses (see Japan- U.S. Business Report No. 357, June 1999, p. 2).
Can the consumption of oolong tea help to control obesity? A transpacific team is researching the effects of oolong tea on energy metabolism. The first-of-its-kind project joins SUNTORY LTD.'s Basic Research Institute and Tokushima University with the Department of Agriculture's Beltsville Human Nutrition Research Center in Beltsville, Maryland. Investigators in Japan already had conducted research on oolong tea's ability to boost energy metabolism, but their work required more precise measurement capabilities than were available in that country. Those will be provided by BHNRC, one of six human nutrition research centers run by USDA and, more importantly, equipped with state-of-the-art research instruments, including one of the few human calorimeters in the United States.
An exchange rate of ¥120=$1.00 was used in this report.
For the first time, HITACHI DATA SYSTEMS CORP., which offers a broad range of servers, multiplatform storage subsystems and professional services, will use a two- tiered technical distribution sales channel. The HITACHI, LTD. subsidiary already has signed channel partnership agreements with the Greenville, South Carolina Gates/Arrow Distributing unit of ARROW ELECTRONICS, INC., TECH DATA CORP., a Clearwater, Florida company that previously worked with HITACHI PC CORP., and Wyle Systems of Irvine, California, which is part of VEBA ELECTRONICS INC. Hitachi Freedom Storage 5800 systems and Hitachi VisionBase 8880R PC servers are the initial products going through the two-tiered channel. Others will be added in time. Within three years, Santa Clara, California-headquartered Hitachi Data Systems calculates, channel-based revenues will account for 70 percent of its total.
HITACHI DATA SYSTEMS CORP.'s Skyline Trinium family of enterprise servers, designed for the availability requirements of electronic business, soon will have a lower point of entry. Come December, two-way and three-way Trinium servers will be ready in addition to the four-way to 12-way models scheduled for September shipment and the 13-engine to 16-engine models expected to be on the market by the first quarter of 2000.
A PACKARD BELL NEC, INC. trying to get back on a growth track is banking on the success of each and every new product it introduces, whether the Consumer Division's recently announced NEC Z1 high-end home computer (see Japan-U.S. Business Report No. 358, July 1999, p. 3) or three additions to the NEC Ready line for home or home office environments. With suggested retail prices of $800 to $1,300, this trio offers a choice of processors from the 433-MHz Celeron up to the 450-MHz Pentium III. Buyers also can opt for 64 megabytes or 96 MB of system memory (expandable to 256 MB), an 8.4-gigabyte or a 10.2-GB hard drive, and a 32X CD-ROM (compact disc-read-only memory) drive or a DVD-ROM (digital video disc) drive. Two of the three also come with a CD-Rewritable drive for easy data storage and archiving.
Offering small to midsize businesses the latest portable technology at industry-leading prices is how the Computer Systems Division of TOSHIBA AMERICA INFORMATION SYSTEMS, INC. describes the Satellite 4100XDVD and the Satellite 4090XDVD. The first product features the new 400-MHz mobile Pentium II chip, a 14.1-inch active- matrix TFT (thin-film-transistor) LCD (liquid crystal display) screen, 64 MB of synchronous dynamic random access memory (expandable to 192 MB) and a 6.4-GB hard drive for $2,800. The second product has the same configuration but incorporates a 400-MHz Celeron processor. It lists for $2,400. As their model numbers suggest, the two new notebooks also have a DVD-ROM drive.
Catering to the needs of budget-conscious small businesses, TOSHIBA AMERICA INFORMATION SYSTEMS, INC.'s CSD also released the Satellite 2595 Series. Available in three different configurations, this line shares a 400-MHz Celeron processor, 64 MB of internal memory and an all-in-one design that integrates the hard drive, diskette drive and DVD-ROM or CD-ROM drive for a slimmer form factor. The Satellite 2595XDVD model, which is priced at $2,300, has a 6.4-GB hard drive, a 14.1- inch active-matrix display and a 2X DVD-ROM drive. For $1,800, customers can acquire the Satellite 2595CDT with a 6.4-GB hard drive, a 12.1-inch TFT LCD display and a 24X CD-ROM drive. For buyers on a smaller budget, there is the $1,600 Satellite 2595CDS with a 4.3-GB hard drive, a 24X CD-ROM drive and a 13-inch dual-scan Color Bright display.
For individual buyers, TOSHIBA AMERICA INFORMATION SYSTEMS, INC.'s CSD now is offering the Satellite 2060CDS/2065CDS. These models, which start at $1,400, use the 366-MHz AMD-K6-2 processor. They are equipped with a 4.3-GB hard drive, an integrated 24X CD-ROM drive and a 12.1-inch Color Bright display.
However they are described — personal organizers or personal digital assistants — handheld computers are becoming ever-more sophisticated. For instance, the ePlate from HITACHI AMERICA, LTD. offers the powerful connectivity of the Windows CE Handheld PC Professional Edition, Version 3, operating system, a 7.5-inch resistive- touch color flat-panel display with a VGA (video graphics array) resolution of 640 x 480 pixels and handwriting recognition, a 128-MHz SuperH SH-4 RISC (reduced instruction-set computing) processor and 16 MB of RAM memory for $1,200. This price also buys a battery with an estimated use time of nine hours and a package that weighs just 29.6 ounces.
Users of HITACHI DATA SYSTEMS CORP.'s enterprise-level Hitachi Freedom Storage 7700E storage subsystems now can access any data on any computer, anywhere, at any time. The Hitachi Freedom Storage NanoCopy is described as the storage industry's first hardware-based remote copy solution with full data integrity. It copies data between any number of primary subsystems and any number of secondary subsystems. The copies can be of any type or amount of data and can be recorded on subsystems anywhere in the world.
Whatever the storage requirements of desktop and portable PCs, one of the hard disk drives recently introduced by FUJITSU COMPUTER PRODUCTS OF AMERICA, INC. probably fits the bill. Its Desktop 27 family, which incorporates third-generation giant magneto-resistive heads, spans 10 models ranging in capacity from 6.4 GB to 27.3 GB with rotational speeds of either 5400 RPM or 7200 RPM. All are Ultra ATA 66- compatible so that they can take advantage of the latest drive-system interface for transferring data. Four high-performance models, grouped as the Desktop 27 XP series, offer a record-fast data transfer rate of 40.7 MB per second. Three Desktop 27 XV models, which have transfer rates of up to 30.4 MB per second, are optimized for audio/visual and Internet applications, while three others are designed for cost- conscious consumer PC users. For manufacturers of value-class PCs and entertainment devices for budget-minded buyers, the San Jose, California supplier also introduced a pair of entry-level desktop hard drives. Available in capacities of 4.3 GB and 8.4 GB, the XV8 models are 5400-RPM drives with transfer rates of up to 34.4 MB per second and average seek times of 9.5 milliseconds, the same as the Desktop 27 XV products. According to Fujitsu Computer Products, it is the first company to release a single-platter 8.4-GB drive and a single-head 4.3-GB desktop drive.
FUJITSU COMPUTER PRODUCTS OF AMERICA, INC. also is helping notebook computer users pack more data into thinner machines. Its new Mobile 18 XP Series of 2.5-inch drives includes storage capacities of 6, 9, 12 and 18 GB in 9.5-millimeter and 12.5-mm heights. All feature third-generation GMR heads and a transfer rate of 22.4 MB per second. The Mobile 18 XP Series also is said to be the first in its class to offer the UDMA 66 interface, which enables faster transaction speeds.
Not forgetting the growing ranks of APPLE COMPUTER, INC. buyers, FUJITSU COMPUTER PRODUCTS OF AMERICA, INC. added to its family of DynaMO magneto- optical drives two external products for G3 and iMac customers that are compatible with the high-speed FireWire/IEEE 1394 peripheral connection interface. The DynaMO 1300FE provides 1.3 GB of removable, rewritable capacity on a single 3.5-inch disk, the highest MO capacity in the industry, the company claims, while the DynaMO 640FE provides 640 MB of storage. Fujitsu Computer Products also announced the external DynaMO 640USB for systems like the G3 and the iMac that have a universal serial port. All three products are hot-pluggable.
The second product in RICOH CO., LTD.'s line of CD-Recordable/CD-Rewritable drives (see Japan-U.S. Business Report No. 358, July 1999, p. 4) is designed specifically for laptop computers. Available from the firm's Tustin, California subsidiary, the portable MediaMaster MP8040SE combines 4X CD-R recording and 4X CD-RW rewriting with a 20X CD-reader. It has a suggested price of $550.
An exchange rate of ¥120=$1.00 was used in this report.
The problems of Japanese real estate companies can work to the advantage of expansion-minded competitors. The former 297-room Hotel Nikko of Beverly Park in Los Angeles, a JAL HOTELS CO., LTD. property opened in 1989, is the first Le Meridien hotel in the United States. The upscale hotel chain is owned by Great Britain's largest hotelier group. Financial terms were not disclosed.
Like many of its debt-burdened counterparts, TOKYU CONSTRUCTION CO., LTD. has pulled out of the American market. The major general contractor liquidated its Pasadena, California holding company, PAN PACIFIC CONSTRUCTION NORTH AMERICA, INC., taking a loss of $11.7 million in the process. It also wrote off in its FY 1998 financial statement roughly $77.5 million owed by a Pasadena wastewater treatment construction company.
An exchange rate of ¥120=$1.00 was used in this report.
For $143 million in cash, GOULD ELECTRONICS INC. sold its Circuit Protection Group to a French company. Based in Newburyport, Massachusetts, Gould CPG is the largest maker of industrial power fuses in North America and Europe, with manufacturing facilities in Newburyport, Juarez, Mexico, Toronto, Canada, Spain and Germany. Eastlake, Ohio-headquartered Gould Electronics, a JAPAN ENERGY CORP. company since 1988, will use the proceeds from the sale to pay down its debt and, possibly, to expand its core operations. Those are centered on printed circuit materials and optoelectronic products, including electrodeposited copper foil, copper aluminum copper, adhesiveless flexible laminates and fiber-optic components and assemblies.
Interested in supplying the North American marketplace as a local player, SUMIDA ELECTRIC CO., LTD. — a manufacturer of coils for information technology, communications and mobile systems — acquired C.P. CLARE CORP.'s Electromagnetic Group for approximately $36 million. The renamed CLAREREMTECH CORP. produces advanced magnetic products, reed relays, surge protectors and other electromagnetic components and assemblies. Headquartered in Arlington Heights, Illinois, it has two factories in Guadalajara, Mexico and a purchasing office in Taiwan. ClareREMtech employs some 1,200 people and has annual revenues of around $55 million. Sumida Electric is an unusual Japanese company in that all of its manufacturing takes place overseas, as do most of its sales.
SHOWA DENKO K.K. is partnering with KEMET CORP., the world's leading manufacturer of tantalum capacitors, to develop and make solid conductive polymer aluminum surface-mount capacitors. This product promises several advantages over existing aluminum electrolytic capacitors in communications and computer applications, including not only low electrical resistance and high heat stability but also true surface-mount capability. Expected to be commercially available in the second quarter of 2000, the new capacitor will be produced by Showa Denko in a factory to be built at its production complex in Nagano prefecture and by KEMET in its Greenville, South Carolina and Matamoros, Mexico facilities. For KEMET, the Showa Denko deal complements an arrangement with NEC CORP. on conductive polymer tantalum capacitors (see Japan-U.S. Business Report No. 358, July 1999, p. 6).
The first DVD-Audio players available in the United States should be on store shelves in October, manufacturer MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. says. The two initial models, which will list for about $1,000 and $1,200, respectively, come close to replicating the sound quality of concert halls. A DVD disk can hold 1,000 times more information than a typical music CD. When plugged into a television set, a DVD-Audio player can play movies recorded to DVD standards while also presenting graphics, text and music videos.
An exchange rate of ¥120=$1.00 was used in this report.
For the first time, a Japanese company went public in the United States rather than at home. INTERNET INITIATIVE JAPAN INC., generally ranked as the country's top Internet services provider, delivered this seeming rebuff to Japan's over-the-counter market and stock exchanges. However, IIJ executives said that the decision to list on NASDAQ had more to do with the company's perceived need to expand its presence in the United States, the center of the international Internet business, than with any drawbacks of an initial public offering in Japan. IIJ, which has an extensive Internet backbone in Japan with links to other Asian countries as well as its own transpacific backbone, raised $143 million from its IPO. It will use this money mainly for capital investment, including additional data centers.
The electronic stock trading system developed by OPTIMARK TECHNOLOGIES, INC., which matches large institutional trades, has received a major financial endorsement. SOFTBANK CAPITAL PARTNERS LP — the big venture capital fund recently organized by SOFTBANK CORP. to invest in Internet and related ventures eyeing IPOs in the near term (see Japan-U.S. Business Report No. 358, July 1999, p. 6) — agreed to invest as much as $100 million in the Jersey City, New Jersey company. Softbank and OptiMark have an indirect link. Softbank is working with the NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. to bring a NASDAQ-type electronic stock market to Japan (see Japan-U.S. Business Report No. 358, July 1999, p. 18), while NASD is installing the OptiMark system for trading NASDAQ-listed stocks. At the same time, the Osaka Securities Exchange is implementing the electronic trading system, with operations scheduled to begin in the spring of 2000 (see Japan-U.S. Business Report No. 349, October 1998, p. 16).
Continuing to unwind its operations in the United States while the search continues for a buyer of its Japan businesses, nationalized LONG-TERM CREDIT BANK OF JAPAN, LTD. tentatively has agreed to sell the assets managed by its New York City trust bank subsidiary to BANK OF NEW YORK CO. These assets totaled an estimated $5 billion or so at the end of 1998. The sale price still is being negotiated. This spring, LTCB arranged to sell its $11 billion portfolio of U.S.-based loans to GE CAPITAL CORP. (see Japan-U.S. Business Report No. 357, June 1999, p. 6).
CHASE MANHATTAN CORP. is the sole custodian of the $16.7 billion or so worth of pension funds and other assets that TOYO TRUST & BANKING CO., LTD. manages overseas (see Japan-U.S. Business Report No. 354, March 1999, p. 6). The number- five trust bank, which is withdrawing from offshore operations, broke ground with this arrangement since trust banks and life insurers normally tap their own foreign units or multiple foreign financial institutions to handle custodial functions. The tie-up with Chase also could bring changes to the way that Toyo Trust manages money invested overseas.
An exchange rate of ¥120=$1.00 was used in this report.
The two biggest manufacturers of instant noodles and instant noodle soups in the United States — NISSIN FOOD PRODUCTS CO., LTD. and TOYO SUISAN KAISHA, LTD. — reportedly have each earmarked $8.3 million for their production ventures. Nissin Food, which has produced these products here for more than a quarter-century, expects the extra investment to make its Lancaster, Pennsylvania plant more efficient. The company also is negotiating with several supermarket chains to supply instant noodles and/or instant noodle soups under their private brands. This output could come from the Pennsylvania factory or the Nissin Food plant in Gardena, California. For its part, Toyo Suisan plans to increase instant noodle capacity at its MARUCHAN, INC. subsidiary in Irvine, California. The expansion, scheduled for completion this fall, will boost annual capacity by about 15 percent to 1.5 billion packages. The Maruchan plant has been in business since 1977.
MITSUKAN GROUP CORP. (formerly Nakano Vinegar Co., Ltd.) hopes to capitalize on the popularity of Japanese foods both to expand U.S. sales of Japanese-style seasonings and to increase awareness of the Mitsukan brand name. Through its NAKANO FOODS, INC. marketing unit in Arlington Heights, Illinois, the company already sells such products as rice vinegar from its Rancho Cucamonga, California plant. Mitsukan plans to expand the range of seasoned vinegars available in the United States as well as introduce soup bases. Nakano Foods is projecting a 5 percent increase in business in FY 1999 to $65 million on the basis of these moves. Mitsukan's Traverse City, Michigan INDIAN SUMMER, INC. subsidiary is a big supplier of traditional vinegar as well as apple cider.
A wider variety of organic products will be available in Japan as a result of a contract between NICHIRO CORP. and CASCADIAN FARM. Starting this fall, the processed foods manufacturer will import corn and other organic frozen vegetables from the Sedro-Woolley, Washington company, a major grower, producer and distributor of organic products. Nichiro is looking for sales of $2.1 million in the first year of the tie- up. In time, it could source more products from Cascadian Farm, which makes more than 150 organic food items, including frozen desserts, vegetarian meals and entrees, and frozen fruit and juices.
An exchange rate of ¥120=$1.00 was used in this report.
A decade after it used an acquisition to move into the U.S. magnetic iron oxide manufacturing and marketing business, MITSUI MINING & SMELTING CO., LTD. has pulled out. It sold Pulaski, Virginia-based MAGNOX, INC. to a management-led team for an undisclosed amount. Mitsui Mining will have to take a write-off of $22.5 million when it closes its books for FY 1999. A primary use for magnetic iron oxide is in videocassette tape and audio tape, but the growing popularity of CDs and other media has hurt Magnox's operations.
An exchange rate of ¥120=$1.00 was used in this report.
Car and truck manufacturers operating in North America will have another onshore source of metal stampings as soon as May 2000. Big automotive stamping tool supplier FUJI TECHNICA INC. formed DIENAMIC SOLUTIONS, LLC in Bowling Green, Ohio with minority (30 percent) partner HONGO K.K. The pair expect to invest $25 million in the factory, which will be equipped with a 2,000-ton mechanical press, a 1,300-ton mechanical press, three 1,000-ton mechanical presses and four large machining centers. Employment could reach 65 people soon after start-up. Dienamic Solutions is projecting sales at $8.3 million in the first full year of production and double that figure in the third year. The factory will allow Fuji Technica, which currently builds all its stamping tools in Japan for the North American market, to provide more value-added services to customers, including maintenance over the life of products. Most of the business that Fuji Technica's Troy, Michigan marketing unit now does is with the Big Three and European vehicle builders.
ASAHI ORGANIC CHEMICALS INDUSTRY CO., LTD. has offered to buy the outstanding shares of Malden, Massachusetts-based ASAHI/AMERICA, INC., a marketer and manufacturer of thermoplastic valves, valve actuators and controls, piping systems, flow meters and industrial filtration equipment for a variety of applications. The Miyazaki prefecture company, Japan's dominant manufacturer of plastic valves and Asahi/America's principal supplier of this product, already is a partial owner. The deal is conditioned on the sale of QUAIL PIPING PRODUCTS, INC. — a wholly owned Asahi/America subsidiary that produces corrugated polyethylene piping systems for use in water, sewage and drainage projects and fiber-optic cable duct for the telecommunications industry — to a management buyout team for $4.5 million. Asahi Organic Chemicals will pay a minimum of $29.1 million to take over its affiliate.
JAPAN STEEL WORKS, LTD., among the world's biggest makers of plastic injection- molding equipment, is promoting its unique die slide system for hollow product injection molding. This process is said to eliminate most of the drawbacks of current methods for molding hollow products, such as uneven wall thicknesses that lead to strength problems, as well as joining two halves for closed products. JSW says that the DSI molding system is particularly well-suited to modularized automotive parts. JSW PLASTICS MACHINERY INC. of Anaheim, California likely will be in charge of marketing the DSI system.
In a major win, TOKYO KIKAI SEISAKUSHO, LTD., Japan's dominant maker of rotary printing presses for the newspaper industry, has contracts to supply equipment to DOW JONES & CO., INC., the publisher of The Wall Street Journal, and to Ohio's Columbus Dispatch. The Dow Jones order covers 18 TKS Color Top 6000 tower-type printing systems, which simultaneously print both sides of the page in four colors. Shipments to the plants around the country that print The Wall Street Journal started in July and should be complete by November 2000. The contract with the Columbus Dispatch involves four of the same systems. TKS's Richardson, Texas distribution subsidiary did not disclose the value of either contract.
HEIAN CORP. has landed a contract from TRW INC. for a CNC (computer numerically controlled) cutting machine that can process ultrahard materials at 5/100 of a millimeter. TRW will use the equipment to make solar panel frames for satellites. With this order in hand, the Hamamatsu, Shizuoka prefecture manufacturer of woodworking equipment hopes to sell 10 of its $500,000 precision cutting systems a year.
Machine tool manufacturer KOYO MACHINE INDUSTRIES CO., LTD. is looking for more sales in the United States. Through marketing unit KOYO MACHINERY U.S.A., INC. of Plymouth, Michigan, which opened in 1991, the company had U.S. revenues of roughly $14.2 million in FY 1998. Most of its business comes from the sale of grinders to the North American assembly operations of Japanese automotive makers and to FORD MOTOR CO. To backstop the expansion strategy, Koyo Machine increased the capitalization of its subsidiary and opened a technical center at U.S. headquarters to provide better support to customers.
As part of its push to boost sales of superhard tool tips and other tooling to the U.S. metalworking and automotive industries, particularly to Japanese-affiliated participants, TOSHIBA TUNGALOY CO., LTD. will put out a catalog this fall that lists about 1,200 products. Its Elk Grove Village, Illinois sales subsidiary currently offers only a few hundred products. To the extent possible, Japan's top manufacturer of superhard tools also will make use of the North American distribution channels of Latrobe, Pennsylvania-headquartered KENNAMETAL INC. The two signed a wide- ranging business collaboration agreement earlier this year (see Japan-U.S. Business Report No. 353, February 1999, p. 8).
Hoping to ride the boom in the U.S. construction equipment market, particularly the leasing end of the business, KOMATSU LTD. has penciled in combined FY 1999 sales of 200 units for two midsize additions to the US Series of hydraulic excavators introduced this past spring. The 28,000-pound PC128us-1 has a 0.59-cubic-yard bucket, while the PC228uslc-1 has an operating weight of 50,485 pounds and a bucket capacity of 1.05 cubic yards. Both machines feature a tight tail swing area, making them ideal for work in close quarters. If Komatsu's sales forecast is on target, KOMA-TSU AMERICA INTERNATIONAL CO. could start onshore production, presumably at its Chattanooga, Tennessee factory.
In a cost-cutting, efficiency-enhancing move, MINEBEA CO., LTD. — best known as the world's leading maker of miniature and instrument size ball bearings but also a major producer of stepper and spindle motors, keyboards, fans and mechanical assemblies — combined two of its U.S. marketing units into NMB TECHNOLOGIES CORP. That company reports to Minebea's North American headquarters, NMB (U.S.A.), INC. in Chatsworth, California. By coincidence, just two weeks after the merger, NMB Technologies officially opened a technical center in Wixom, Michigan for testing and analyzing bearing and motor applications for various markets, including automotive. The facility can simulate all environmental and customer-use conditions, including temperature, humidity, altitude, contamination and corrosion. It also has a complete noise and vibration analysis capability.
An exchange rate of ¥120=$1.00 was used in this report.
Through periodic acquisitions, OYO CORP., Japan's leading geophysical research company, has built a broad presence in the U.S. markets for seismic instruments used in the search for oil and gas, earthquake-detection equipment, ground-probing radar and side-scan sonar equipment and in related products and services. The latest addition to the Oyo stable is QUANTERRA INC., a Harvard, Massachusetts designer and manufacturer of high-resolution, broadband seismic instrumentation for scientific research and government applications. The $4.5 million acquisition actually was handled by Pasadena, California-based KINEMETRICS INC. An Oyo company since 1991, it is a leader in the earthquake instrumentation business, designing products for monitoring bridges, dams, structures and seismic arrays and networks. Kinemetrics and Quanterra have worked together on several projects, including an ongoing one for the U.S. Air Force to design a system for nuclear treaty verification.
The retrenchment of Japanese-affiliated manufacturers from the U.S. semiconductor business and other onshore electronics operations has taken a toll on equipment suppliers, including makers of clean rooms and clean-air systems. The situation is so dire that two otherwise rivals in this field have decided to cooperate across the board on marketing. Starting in December, AIRTECH JAPAN, LTD., which has a production and sales subsidiary in Hillsboro, Oregon, and Exton, Pennsylvania-based AIRO CLEAN INC. will market each other's products through their own distribution channels even if the products compete head-to-head. In the past, each company occasionally sold some of the other's lineup but not directly competing products. The main Airtech Japan equipment that Airo Clean will market is a filtration unit for removing contaminants from the air.
A novel product that developer TECHNOS JAPAN CO., LTD. describes as improving the quality of life of the severely disabled is commercially available through the Himeji, Hyogo prefecture company's recently established Bailey, Colorado subsidiary. MCTOS, short for mind-controlled tool operating system, is a switch controlled by bioelectrical impulses measured at the forehead. These include brainwaves, electrical impulses from eye movement and muscle activity. The idea behind MCTOS is for the user to control his or her mind, whether quieting it or stimulating it. A computer training program comes with the $2,500 product to help buyers master this skill.
An exchange rate of ¥120=$1.00 was used in this report.
INTERNATIONAL BUSINESS MACHINES CORP.'s interest in limiting its exposure to the volatile DRAM market will give TOSHIBA CORP. the opportunity to implement the part of its semiconductor reorganization strategy that involves becoming a full-fledged U.S. manufacturer of memories. The two are equal partners in DOMINION SEMICONDUCTOR LLC, a Manassas, Virginia 64-megabit DRAM wafer fabrication facility that has been operational since September 1997. By the end of 2000, Toshiba will buy out IBM's half of Dominion. Financial terms were not disclosed, but industry sources in Japan speculate that the Japanese semiconductor maker will pay between $166.7 million and $250 million for its partner's share. That is a bargain price if these reports are true. IBM and Toshiba each put up $200 million toward Dominion's capitalization and equally split the estimated $1 billion cost of building and equipping the wafer fab. Even before the purchase is finalized, Toshiba will increase its share of Dominion's output to 75 percent from 50 percent. The plant currently has the capacity to make 4 million 64-megabit DRAMs a month, a figure that will rise to 6 million by yearend (see Japan-U.S. Business Report No. 353, February 1999, p. 9). In the fourth quarter of 2000, Toshiba will begin switching over part of the capacity used by IBM for DRAMs to the production of NAND flash memories. The company has tagged these devices as one of its core memory products, not just because of the rapid growth forecast for this market but also because flash memories, like static RAMs, another targeted product, have higher margins than DRAMs.
Although it promises considerable long-term financial rewards, the decision by SOFTBANK CORP. to become essentially a pure-play Internet company could prove costly in the short term as the firm divests or downsizes its non-Internet holdings. A case in point is Softbank's agreement to sell its 80 percent stake in KINGSTON TECHNOLOGY CORP. to the Fountain Valley, California firm's founders for $450 million. The Japanese company paid about $1.5 billion for this share of the world's top maker of memory boards for PCs in the fall of 1996.
A pair of semiconductor start-ups recently attracted funding from Japanese companies. MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. participated along with several name American investors in the third round of financing for TENSILICA INC. The Santa Clara, California company is involved in the emerging market for application- specific processor cores and software development tools used in high-volume, embedded systems. Tensilica, which has raised $33 million in venture capital, including $20 million in the last round, has a subsidiary in Yokohama (see Japan-U.S. Business Report No. 357, June 1999, p. 21).
For its part, KOMATSU ELECTRONIC METALS CO., LTD., an original investor in SILICON GENESIS CORP., joined in a second round of financing for the Campbell, California company that brought total funding to more than $30 million. SiGen will use the new money to further development of its Genesis Process layer-transfer technology for the cost-effective production of silicon-on-insulator wafers. At the start of 1999, the company won a contract from Komatsu Electronic Metals for a plasma implant system for SOI wafer production qualification. The two also signed a research agreement (see Japan-U.S. Business Report No. 352, January 1999, p. 19).
In a gutsy move, three small Kumamoto prefecture semiconductor production equipment suppliers are setting up shop in Hillsboro, Oregon. Their immediate goal is to win more business from Japanese-affiliated semiconductor and other electronics manufacturers operating in Oregon, although the large number of American high technology companies in the state no doubt is an attraction as well. PRECEED CO., LTD. already has formed a subsidiary; KHC CO., LTD. and KOTO SEISAKUSHO K.K. are in the process of doing so. All three have arranged to lease office and factory space from AIRTECH JAPAN, LTD.'s Hillsboro subsidiary.
Already the largest supplier in Japan of excimer laser light sources for patterning silicon wafers, KOMA-TSU LTD. is attempting to break into the American market. Its vehicle is the G20K, a fifth-generation, 248-nanometer krypton excimer laser light source operating at 2000 hertz. According to Komatsu, this product incorporates several advances to lower the traditionally high cost of using deep ultraviolet light sources, such as a 20 percent cut in power consumption and a doubling of the life expectancy of the light chamber. To backstop its move into the United States, Komatsu established a sales office in Santa Clara, California and a training center in Hillsboro, Oregon. It expects to have evaluation G20K units at the training center later this year and to open regional sales office on the East Coast and in the South in 2000.
NHK SPRING CO., LTD. is working with memory test equipment provider AEHR TEST SYSTEMS to create full-wafer probe contactors for use in wafer-level burn-in and test systems. Although best known as the world's largest spring manufacturer, NHK Spring is a leading supplier of miniature contactors for use in semiconductor wafer probe heads and in various test sockets. Mountain View, California-based Aehr Test Systems is developing a cost- and time-saving system that will enable chip manufacturers to perform burn-in and parallel functional testing of integrated circuits while still in wafer form. Contactors are integral to this system. The partners expect to roll out their full-wafer burn-in and test system in early 2000.
An exchange rate of ¥120=$1.00 was used in this report.
The Panasonic Internet Incubator — a facility to nurture early-stage Internet and electronic commerce businesses — will open in October at PANASONIC TECHNOLOGIES, INC.'s Panasonic Digital Concepts Center in Cupertino, California. The idea behind the Panasonic Internet Incubator is to help start-ups get their businesses off the ground by making available to them space within PDCC's 15,000- square-foot facility, business services and a wide range of business development resources. The incubator also gives MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. the opportunity to evaluate firsthand technologies that might be of interest to it. PDCC — which was established to make investments to advance the development of next- generation digital, networking and Internet technologies, products and services (see Japan-U.S. Business Report No. 350, November 1998, p. 5) — has room for as many as 15 early-stage firms. Five already have been selected, including a firm that has developed enterprise software that provides real-time customer data analysis.
Even before it decided to concentrate its financial resources on promising Internet firms, SOFTBANK CORP. had interests in more than 100 such businesses. Now that the company has refined its focus and can access a pair of venture capital funds set up specifically to invest in Internet firms (see Japan-U.S. Business Report No. 358, July 1999, p. 6) as well as its own funds, this number is certain to grow rapidly. In fact, three additions already have been made to the total. For starters, Softbank itself agreed to invest $91 million in MORNINGSTAR, INC. to help the Chicago-based investment information and services firm enhance the content and the technology supporting Morningstar.com. The deal will give Softbank a 20 percent stake in the private company. Morningstar's on-line investment information site is designed to provide unbiased data, research, news and analysis for both individual investors and institutional customers. Softbank's investment decision no doubt grew out the joint venture it formed last year with Morningstar, the developer of the five-star mutual fund rating system, to make available to Japanese investors information on the performance of various mutual funds (see Japan-U.S. Business Report No. 347, August 1998, p. 29).
WEBHIRE, INC., the self-described leader in the business-to-business Internet recruiting marketplace, also has caught SOFTBANK CORP.'s attention. SOFTBANK CAPITAL PARTNERS LP is investing $20 million in the publicly traded Lexington, Massachusetts company. In addition, Softbank is acquiring a block of Webhire stock held by AMAZON.COM INC. Through these transactions, Softbank and its affiliates will own 39 percent of Webhire. The company currently helps more than 1,000 employers quickly and cost-effectively advertise job openings, attract and evaluate candidates and manage the hiring process. Webhire also manages and powers a number of Internet recruiting sites and job-posting sites. It will use the money from the Softbank investments to accelerate its Internet growth plans as well as to market its services more aggressively.
WEBVAN GROUP, INC.'s aggressive — and expensive — plans to bring on-line grocery shopping to 28 major markets around the United States over the next two years have created a lot of buzz about the Foster City, California company. But Webvan also has made a name for itself because of its ability to attract high-profile financial backers. These include SOFTBANK CORP. Funds affiliated with the company were initial investors in Webvan. SOFTBANK CAPITAL PARTNERS LP and two other well-known venture capitalists were the main participants in the latest round of financing, which raised $275 million for an aggregate total of nearly $400 million. The fresh capital will be used for Webvan's national expansion.
Buying flowers and gifts on-line is quickly developing into a big business. SOFTBANK CORP. hopes to benefit from that boom through a stake in 1-800-FLOWERS.COM, INC. As part of a private placement that raised a total of $102.6 million, the U.S. venture capital unit of SOFTBANK HOLDINGS INC. put up $40 million for a 6 percent interest in the Westbury, New York e-commerce provider. 1-800-FLOWERS subsequently filed to go public. Its IPO raised a net $117.2 million. Although the Internet is the company's fastest-growing sales channel, customers also can purchase products by calling toll-free or by visiting one of some 120 company-owned or franchised stores. For both the on-line and telephone businesses, roughly 1,400 independently owned florists help with fulfillment.
Although the scale of their activity is entirely different, other Japanese companies also hope that strategic investments will enable them to tap the technology and/or the financial potential of Internet businesses. For instance, NTT COMMUNICATIONS CORP., the long-distance and international carrier created through the July 1 breakup of NIPPON TELEGRAPH AND TELEPHONE CORP., was one of three firms that invested a total of $20 million in shares of COMMERCE ONE, INC.'s unregistered common stock after the Walnut Creek, California provider of e-commerce solutions closed its IPO. Commerce One will use this money, including the $7 million put up by NTT Communications, for general corporate purposes. Earlier this year, Commerce One and NTT announced a project to establish a business-to-business electronic marketplace (see Japan-U.S. Business Report No. 355, April 1999, p. 25).
In less than a year, EDOCS, which pioneered the market for electronic bill presentment and payment software applications, has raised more than $22 million, including $18.6 million in second-round financing from such investors as the American venture capital unit of JAFCO CO., LTD. The flagship product of Wayland, Massachusetts-based edocs is BillDirect, which allows billers to deploy and manage their own EBPP solutions to deliver personalized, interactive bills, statements and invoices through their own Web sites or Internet billing services providers. The U.S. arm of JAFCO, Japan's top venture capital firm, currently manages five funds with a combined capitalization of more than $350 million.
The U.S. unit of NIPPON INVESTMENT & FINANCE CO., LTD. joined INTEL CORP. and a big American venture capital fund in providing a combined $5.1 million for SIMPATA, INC., a provider of customizable, Internet-based employee administration solutions for small and midsize businesses. With a nudge from the trio of investors, the Fremont, California company was created recently through the merger of a firm that developed software-based benefits administration programs and one that offered Internet-based employee administration services. Simpata will use the new funds to expand its technology development efforts and to further develop its customer services infrastructure.
The fast-expanding on-line music and video retail business will have a new, heavyweight player early in 2000 when CDNOW INC., an Internet-based seller of these products, merges with COLUMBIA HOUSE INC. That direct marketer of music and movies, owned by SONY CORP. and TIME WARNER INC., has 16 million club "members," but it also operates a Web service. This site and CDNOW's will be linked, creating a customer base of some 4 million people. Sony and Time Warner will each have a 37 percent stake in the merged company. The balance will be held by Ft. Washington-based CDNOW, which has been losing market share to AMAZON.COM INC. The deal will do double-duty by giving media giants Sony and Time Warner bigger footholds in the on-line world.
JUSTSYSTEM CORP., the developer of the top-selling Japanese-language word- processing program, has agreed to license its search engine to WCOLLECT.COM, INC., an on-line marketplace specializing in authenticated fine art, entertainment collectibles and sports memorabilia. Concept Base, which is expected to be available to U.S. shoppers late this year, employs fuzzy logic to conduct searches rather than the keywords now typically used. At the same time, collectors in Japan will have access to WCollect.com's inventory of 100,000 collectibles. The Beverly Hills, California company believes that this expansion will generate revenues of $10 million to $15 million in the first six months.
As soon as yearend, an enterprising EXPRESSION TOOLS, INC. hopes to be shipping an English-language version of its Shade three-dimensional computer graphics package. The Fukuoka software developer plans to open a U.S. office and sign up a distributor for what it calls a very sophisticated 3D geometric modeling, rendering and animation program suitable for all levels of computer users.
An exchange rate of ¥120=$1.00 was used in this report.
Success does not often elude SONY CORP., but it has in the North American wireless telephone handset market. By the end of September, the company will exit this business and let go about 200 engineering, sales and marketing employees at San Diego, California-based SONY ELECTRONICS, INC. Sony is an also-ran in the U.S. cellular phone market, in part because it did not start marketing here until 1995. Sales also were hurt by a recent recall and stiff price competition. Sony will continue to work on third-generation, or wideband CDMA (code-division multiple access), digital mobile phone technology. It also will remain a minority partner in QUALCOMM PERSONAL ELECTRONICS, a San Diego joint venture with QUALCOMM INC. that makes CDMA and PCS (personal communications services) phones.
MATSUSHITA COMMUNICATION INDUSTRIAL CORP. OF U.S.A. of Peachtree City, Georgia will develop and design special receivers for CD RADIO INC.'s satellite-to-car radio broadcast service. This will include as many as 50 channels of commercial-free, CD-quality music programming and up to 50 additional channels of news, sports and entertainment programming for an expected monthly subscription fee of $9.95. New York City-headquartered CD Radio expects to launch commercial operations at the end of 2000. Matsushita Communication Industrial will be one of several companies developing CD Radio receivers for factory installation by car and truck builders and for sale in the aftermarket. It currently makes automotive audio products for sale under the Panasonic brand.
In a contract win that should help it make up some ground on front-runners MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. and SONY CORP. in the digital broadcast equipment field, HITACHI ELECTRONICS, LTD. will supply roughly $833,300 worth of studio cameras and related equipment to CBS CORP. The order covers five SK-3000P multistandard high-definition television-compatible portable cameras that feature a 2.2-million-pixel CCD (charge-coupled device). CBS will use the cameras in its Hollywood studios.
Industry sources report that KDD SUBMARINE CABLE SYSTEMS INC. and LUCENT TECHNOLOGIES INC. will join forces on a project designed both to lower the cost of laying undersea fiber-optic cable networks and to boost transmission speeds. The prospective partners, which will equally split the undertaking's estimated $83.3 million developments costs, hope to complete a test system by the summer of 2000 and expect commercialization to occur around 2002. One novelty of the proposed system is its seamlessness. Signal routers will be incorporated into terrestrial base stations rather than along the network. KDD-SCS and Lucent also are seeking a record- breaking transmission speed of 1 terabit per second. In comparison, the Japan-U.S. Cable Network now under construction across the Pacific initially will operate at 80 gigabits per second with the potential to be upgraded to 640 gigabits per second. KDD-SCS is the prime subcontractor on the competing Pacific Crossing-1 undersea fiber-optic cable network. It, too, will move data at a rate of 80 Gbps.
Expanding the menu of global network services available to its Japanese corporate customers, KDD CORP. is rolling out a frame-relay service in the United States. Its New York City subsidiary will lease capacity for the high-speed data communications system from American carriers.
An exchange rate of ¥120=$1.00 was used in this report.
The innovative Viscotecs system for digitally printing fabrics has arrived in the United States. Developer SEIREN CO., LTD. has launched pilot production at the Kenilworth, New Jersey plant of its VISCOTEC USA LLC subsidiary. Viscotecs is designed for quick turnaround of customized batches of fabric. The system gives designers a virtually unlimited choice of colors, which can be printed on various types of fabrics, and the flexibility to change the design in midrun. The 3D imaging and mapping capabilities of the companion CAD (computer-aided design) system also offer designers a realistic preview of the print. Moreover, designs can be sent over the Internet or on disks. When commercial operations begin next year, Viscotec USA expects to print close to 36,000 square yards of fabric each month. Seiren's New York City office is marketing the printing process to makers of swimsuits, clothing and home furnishings. In time, it hopes to expand the market for Viscotecs to suppliers of automotive interiors.
An exchange rate of ¥120=$1.00 was used in this report.
Although they compete at home in the production of automotive parts using powder metallurgy technology, NIPPON PISTON RING CO., LTD. and HITACHI POWDERED METALS CO., LTD. decided to cooperate in the United States on sintered-alloy valve seats. The major maker of piston rings and valve-train parts will provide its process and product technology to SINTERING TECHNOLOGIES, INC. of Greensburg, Indiana, a Hitachi Powdered Metals subsidiary that has made valve guides and other precision engine components since 1988. A new line for sintered valve seats is scheduled to open in May 2000. Cerritos, California-based NPR OF AMERICA, INC. will market the part. The output from Sintering Technologies presumably will replace some of the sintered valve seats that Nippon Piston Ring exports from Japan.
Three more automotive parts suppliers have reorganized their U.S. operations or plan to do so. TOYODA GOSEI CO., LTD., for instance, is transferring ownership of five North American businesses to TG NORTH AMERICA CORP., a Troy, Michigan holding company, in a move designed to improve efficiency, especially on the the marketing side, and to reduce taxes. Affected by the change are: TG MISSOURI CORP., which has made steering wheels, side molding and other plastic interior and exterior parts in Perryville, Missouri since 1987; TG KENTUCKY CORP. of Lebanon, Kentucky, a 1997 start-up that supplies the same general types of products; a Waterville, Quebec manufacturer of weather strip and similar trim parts; and TG TECHNICAL CENTER (U.S.A.) CORP., also located in Troy. CALIFORNIA AUTOMOTIVE SEALING INC. of Hayward, California will remain outside the holding company structure since Toyoda Gosei owns only 50 percent of this maker of weather strip and trim. Toyoda Gosei is projecting North American sales at $500 million this year and at $600 million in 2002.
For its part, tire valve manufacturer PACIFIC INDUSTRIAL CO., LTD. converted its Fairfield, Ohio subsidiary into a holding company. Under PACIFIC INDUSTRIES USA, INC. are PACIFIC INDUSTRIES AIR CONTROLS, INC., which is in charge of tire valve manufacturing and marketing, and PACIFIC MANUFACTURING OHIO, INC., which runs Pacific Industries' recently launched production of other small stamped automotive parts (see Japan-U.S. Business Report No. 354, March 1999, pp. 11-12), and provides engineering services, including parts design. Both of these companies are located in Fairfield. The Pacific Industries plant opened in 1989.
Before yearend, AISIN SEIKI CO., LTD. will realign its North American manufacturing operations to give its four American plants and two Mexican ones more discrete responsibilities. AISIN U.S.A. MANUFACTURING, INC. will specialize in body parts, specifically door frames and sunroofs, as will the pair of Mexican factories. The brake components made by Seymour, Indiana-based Aisin U.S.A. since it became operational in 1988 will be transferred to AISIN DRIVETRAIN, INC. of Crothersville, Indiana, which has made drivetrain components for the last two years. Engine parts will be shifted to AISIN AUTOMOTIVE CASTING, INC. This London, Kentucky company, operational since the spring of 1998, makes die-cast aluminum engine parts, especially water pumps. AISIN ELEC-TRONICS, INC. of Stockton, California, which started up in the summer of 1997, will continue to produce ECU (electrical control unit) sensors and other electronic parts. Much of Aisin Seiki's North American business, which totaled around $458.3 million in the year through March 1999 and are projected at $583.3 in FY 2005, is generated by TOYOTA MOTOR CORP. affiliates, although the company is pursuing other Japanese-affili-ated vehicle builders and the Big Three.
In an acquisition that bolstered its ability to provide a total transmission sealing package to automotive makers, FREUDENBERG-NOK, an NOK CORP. affiliate, bought FARNAM*MEILLOR for an undisclosed price. The Troy, Michigan company, which manufactures gaskets in Necedah, Wisconsin, will become part of Freudenberg-NOK's recently established Automotive Sector. This transaction occurred at almost the same time that the Plymouth, Michigan-headquartered firm signed an agreement with FORD MOTOR CO. to supply all seals for a future transmission.
In a recent contract award, NISSAN MOTOR CO., LTD. tapped DELPHI AUTOMOTIVE SYSTEMS CORP. to provide steering gears for all the trucks it builds in Smyrna, Tennessee, including the Xterra and the Frontier, starting with 2000 model year production. The world's largest parts manufacturer invested $15 million in tooling at a Saginaw, Michigan plant to supply the Nissan order for Steer-Lite gears. .....Starting next spring, the complete suspension of the Accords built by HONDA MOTOR CO., LTD. in Marysville, Ohio will be supplied by ERNIE GREEN INDUSTRIES, INC. That Marion, Ohio company will spend $18 million to build a plant to produce Accord axle shafts, struts, shocks and knuckles.
With the North American market for car navigation systems expected to take off early in the next decade, AISIN AW CO., LTD., one of Japan's larger makers of this equipment, could start U.S.-bound exports as soon as the end of 1999. The Nagoya company plans to supply the systems to the factories of both Japanese and American vehicle manufacturers as well as to retailers for aftermarket installation. Aisin AW has set its sights on winning 15 percent to 20 percent of the North American market for car navigation systems.
The advice that JAPAN MANAGEMENT ASSOCIATION CONSULTANTS INC. has provided to FORD MOTOR CO. dealerships in Europe since 1992 has proved so valuable that the two companies will formalize their relationship. They will establish a joint venture to provide consulting services to Ford operating units and to Ford dealerships in North America, Latin America, Europe and Southeast Asia. JMAC will have a 49 percent interest in JMAC AUTOMOTIVE DISTRIBUTION GROUP, which will start operations in Amsterdam by yearend and in Detroit by next March. Ford executives say that JMAC has helped the company's European dealers improve cost controls, delivery times and quality. For now, the joint venture will not cover Ford operations in Japan, South Korea or China since the Japanese management consultant already has a presence in these markets.
JAMCO CORP. will continue to be the exclusive supplier of lavatories for BOEING CO.'s 747, 767 and 777 passenger aircraft for five more years starting January 1, 2000. The contract, which could be worth as much as $250 million, extends a relationship that dates back to 1980. JAMCO, the world's biggest supplier of aircraft lavatories, has had a factory in Everett, Washington, near Boeing's assembly facilities, since 1982.
An exchange rate of ¥120=$1.00 was used in this report.
CASIO COMPUTER CO., LTD. reorganized its U.S. operations, creating a holding company for its various marketing units and CASIO CORP. OF AMERICA, which is responsible for administration, personnel and financing for the sales subsidiaries. These include Dover, New Jersey-based CASIO, INC., a marketer of calculators, watches, electronic musical instruments and handheld computers; CASIO PHONE- MATE, INC. of Torrance, California, which sells telephone-related equipment; and CASIO MANUFACTURING CORP. of San Diego, California, which makes electronic musical instruments in Mexico.
By expanding its mail-order business and naming a distributor, MITSUBISHI MATERIALS CORP. believes that it can substantially build up sales of clay containing precious metals over the next five years. At the end of that period, PETROGLYPH INC. of Santa Cruz, California expects to be running 500 ceramics classes at which students use the clay. Mitsubishi Materials also will devote more resources to the mail order business in the hope of boosting revenues to $20.8 million in 2004.
All English-language sales and service literature for KOMATSU LTD.'s global operations will be produced by DATAKOM PUBLISHING CORP. Headquartered in Vernon Hills, Illinois with offices in Peoria, Illinois and Norcross, Georgia, DataKom is owned by KOMA-TSU AMERICA CORP. (80 percent) and KIP LTD. (20 percent), a wholly owned subsidiary of the world's second-largest supplier of construction and mining equipment. It will take over the technical literature resources of KOMATSU AMERICA INTERNATIONAL CO., the manufacturer and marketer of the Komatsu, Dresser and Galion lines of hydraulic excavators, wheel loaders, crawler bulldozers and motor graders; KOMATSU MINING SYSTEMS, INC., which produces and sells the Komatsu, Haulpak, Demag and Modular Mining lines; and KOMATSU UTILITY CORP., which markets Komatsu's backhoe loaders and compact excavators, wheel loaders and bulldozers. All of these companies are headquartered as well in Vernon Hills. DataKom also will be responsible for the creation and worldwide distribution of all English-language materials currently produced in Japan.
An exchange rate of ¥117=$1.00 was used in this report.
In an agreement that could be worth as much as $10 million over the next year, SOUTHWALL TECHNOLOGIES INC. is supplying antireflective film to MITSUBISHI ELECTRIC CORP. to coat flat CRT (cathode-ray tube) computer monitors made in Japan as well as in Mexico. The film is made at Southwall's headquarters plant in Palo Alto, California and at a Tempe, Arizona factory.
With the installation of a dedicated line at the Yamagata prefecture factory of its manufacturing subsidiary, SUMITOMO 3M LTD. can make a protective film for vehicle windows that it has been importing from its American parent. Scotchtint Auto Panther Film blocks ultraviolet and infrared rays as well as keeps interiors cooler in hot weather. It also helps to prevent the glass from breaking into dangerous shards in case of an accident. Coating the side windows as well as the rear window of a car or truck costs roughly $290, including installation. Sumitomo 3M is looking for first-year Scotchtint Auto sales of $4.2 million.
UNION CARBIDE CORP. did about $133.3 million worth of business in Japan in 1998. In three years, it wants to boost that total to at least $166.7 million. One key to the expansion is the introduction of the Danbury, Connecticut-headquartered firm's ethylene-propylene rubber. Used for single-ply roofing materials, automotive hose, tubing and gaskets, tire sidewalls and wire and cable jackets, the compounds, trademarked ElastoFlo polymers, are delivered to manufacturers in a unique, free- flowing granular form. That makes them easier to handle and use. Union Carbide says that this form also means shorter mixing cycles, better dispersion, lower energy requirements and reduced waste disposal. The company's ethylene-propylene rubber plant in Seadrift, Texas came onstream at the end of 1998.
With more people experiencing problems from what is called indoor air pollution, which is caused by the release of chemicals from paints, construction materials and furnishings, AMERICAN FORMULATING AND MANUFACTURING hopes to find a ready market for its primers, paints and stains. Its Safecoat products contain no hazardous or toxic materials and keep so-called offgassing to minimal levels. Recently named distributor TECHNOTOOLS TOKAI CO., LTD. of Gifu prefecture is carrying some 30 Safecoat products, including water-based enamel, flat, eggshell, semigloss and cabinet and trim paints and furniture stains. San Diego, California-based AFM expects sales to reach $833,300 in the first year of marketing.
A variety of medium-grain rice that has been genetically engineered to tolerate the application of MONSANTO CO.'s widely used but nonselective Roundup herbicide is undergoing field trials at the chemical company's research farm in Ibaraki prefecture. If the Ministry of Agriculture, Forestry and Fisheries approves the product as safe, Roundup Ready rice could be marketed as early as FY 2000, giving rice growers a way to control weeds more effectively during the growing season while using less herbicide on average.
The strong growth in Japan's over-the-counter drug market that MERCK & CO., INC. expected in late 1996 when it formed a company with CHUGAI PHARMACEUTICAL CO., LTD. to develop and sell OTC products has not materialized despite Tokyo's interest in controlling health-care spending. Accordingly, the big American pharmaceutical company will sell its 40 percent stake in CHUGAI MSD CO., LTD. to its partner. The timing of the breakup of the money-losing joint venture, which had 1998 sales of approximately $15 million, has not been finalized, but it will occur before March 31, 2000. Merck will continue to be a major player in Japan's prescription drug market through its majority ownership of BANYU PHARMACEUTICAL CO., LTD.
PHARMACIA & UPJOHN, INC.'s subsidiary has two new prescription drugs on the market. Migsis Tablet (lomerizine hydrochloride) is indicated for the treatment of migraine headaches, a problem thought to affect between 7 million and 8 million Japanese, nearly 90 percent of whom go without treatment. The only calcium antagonist approved for migraines in Japan, Migsis is designed to prevent attacks rather than control them, the typical response. KANEBO, LTD. first synthesized the calcium antagonist used in Migsis and helped P&U's subsidiary to develop the compound. Likewise, KISSEI PHARMACEUTICAL CO., LTD. participated in the development of Cabaser Tablets (cabergoline) for the Japanese market. This treatment for early-stage Parkinson's disease and advanced Parkinson's disease when combined with levodopa was discovered by P&U. Cabaser belongs to the class of drugs known as dopamine agonists that stimulate dopamine receptors in the brain by mimicking the effects of dopamine. A major advantage of Cabaser, which is manufactured locally by P&U and sold by Kissei Pharmaceutical, is that it can be administered once a day rather than three times daily like other dopamine agonists.
The Ministry of Health and Welfare's new fast-track evaluation process for innovative HIV therapies will get an early test. KISSEI PHARMACEUTICAL CO., LTD. has filed for approval of Prozei (amprenavir), an orally administered HIV protease inhibitor that was discovered by VERTEX PHARMACEUTICALS INC. and developed and commercialized for the Japanese market by the Cambridge, Massachusetts company and its partner over the last six years. Known outside Japan by the trade name Agenerase, Prozei is indicated in combination with other antiretroviral agents for the treatment of HIV infection. Vertex and Kissei Pharmaceutical continue to collaborate on the development of VX-745, a p38 MAP kinase inhibitor for the treatment of inflammatory diseases (see Japan-U.S. Business Report No. 347, August 1998, p. 2).
TRANSDUCTION LABORATORIES of Lexington, Kentucky awarded FUJISAWA PHARMACEUTICAL CO., LTD. exclusive rights to market its line of cell biology reagents in Japan. These products, which complement the Japanese drug firm's flow cytometry reagents, mainly employ immune reactions (antigen versus antibody reactions) and are used to analyze intracellular mechanisms. TDL, which specializes in the development of monoclonal antibodies for the cell biology area, is a BECTON DICKINSON AND CO. affiliate.
Building on an earlier agreement (see Japan-U.S. Business Report No. 354, March 1999, p. 13), PARACELSIAN, INC. gave KUBOTA CORP. the go-ahead to further develop its patented dioxin test for use in screening samples of ash from municipal waste incinerators in Japan. The Ithaca, New York company bills its Ah Immunoassay as an highly accurate yet quick and inexpensive way to measure dioxin in incinerator ash. It also can be used to detect dioxin and dioxin-like compounds in food, soil, water and even blood.
An exchange rate of ¥120=$1.00 was used in this report.
In its latest business-expansion initiative, HEWLETT-PACKARD JAPAN LTD. is offering corporations the chance to cut hardware operating and maintenance costs by integrating the functions performed by multiple networked PCs and Unix servers into a single, high-end Unix server. The company has enlisted the help of HITACHI, LTD., MITSUBISHI ELECTRIC CORP., NEC CORP. and OKI ELECTRIC INDUSTRY CO., LTD. in offering the service since they often sell HEWLETT-PACKARD CO. Unix-based computer equipment on an original equipment manufacturer basis. HP Japan believes that the new business will bring in revenues of $33.3 million in the first year.
Buyers of workstations, servers and supercomputers from the on-the-move subsidiary of SILICON GRAPHICS, INC. now can sign up for worldwide maintenance service. Available 24 hours a day, 365 days a year, Global Service comes with a guaranteed turn-around time. Moreover, three levels of support are available.
Frustrated by its seventh-place standing in Japan's PC market, COMPAQ COMPUTER CORP. has launched direct sales over the Internet as a complement to its retail channel sales. A new family of Prosignia servers, desktop systems and notebooks is available exclusively through Compaq DirectPlus. Orders, which also can be placed by phone, will be built to buyers' specifications at Compaq's Tokyo-area plants. Although it runs its own call centers, the company decided to outsource Compaq DirectPlus call-center operations to big telemarketer BELLSYSTEM24 INC. In time, Compaq hopes that Internet sales will generate 10 percent of its Japanese business.
People interested in customizing their APPLE COMPUTER, INC. Macintosh Server G3 and Power Macintosh G3 desktop machines (see Japan-U.S. Business Report No. 358, July 1999, p. 16) can do so at the Apple Store on the company's Web site. The equipment is assembled at Apple's Singapore factory and shipped directly to buyers. The process takes two weeks at most.
In the latest demonstration that the company remains committed to supporting the customer base it inherited with the purchase of Digital Equipment Corp., COMPAQ COMPUTER CORP. rolled out a pair of Alpha-based workstations. The latest performance enhancement to the AlphaStation XP1000 boosts its speed above the 600-MHz barrier thanks to the new 667-MHz Alpha 21264 (EV67) chip. Built for designers and engineers who use RISC-based systems and require top 3D workstation application performance, a Tru64 Unix system with a single Alpha 667- MHz processor, 128 MB of memory, a 9.1-GB hard drive, 4 MB of cache and entry- level graphics costs just $15,100. Even more affordable at $9,600 is the AlphaStation XP900 for OpenVMS applications developers and system managers. It is the first high- performance Compaq workstation to feature the new 466-MHz Alpha 21264 (EV6) processor.
Windows NT-based workstation users seeking greater performance now can tap the power of the 550-MHz Pentium III Xeon processor in the HP Kayak PC Workstation line from HEWLETT-PACKARD JAPAN LTD. The release of the seven new models coincided with an average price cut of 38 percent on HP Kayak products with the 500- MHz version of the Pentium III Xeon chip.
Companies requiring extremely high levels of data availability for such critical applications as enterprise resource planning, on-line transaction processing and Web hosting have new two-node Microsoft Cluster Server clustering options available from COMPAQ COMPUTER CORP. in the form of the Compaq ProLiant Cluster HA/F500 and the Compaq ProLiant Cluster HA/F200. Both systems can be built with a variety of ProLiant servers. The storage system for the HA/F200 is the Compaq StorageWorks RAID Array 4000 (formerly known as the Compaq Fibre Channel Storage System), while the HA/F500 uses the new StorageWorks RAID Array 8000 and the Enterprise Storage Array 12000 high-end optical Fibre Channel external storage subsystem and storage systems to meet specific requirements. For greatest protection, the systems can be configured with a dual-loop connection between the server and the storage subsystem. With two ProLiant servers, pricing starts at $72,800 for the HA/F200 and at $428,800 for the HA/F500.
COMPAQ COMPUTER CORP.'s subsidiary also has brought the performance- enhancement powers of the 550-MHz Pentium III processor to its mainstream line of ProLiant servers. Pricing ranges from $3,600 for the ProLiant 800 workgroup server to $5,400 for the ProLiant 1600 and on to $6,500 for the rack-mounted ProLiant 1850R, topping out at $7,200 for the midrange ProLiant 3000. At the same time, the Compaq marketing unit added two products to the low-cost ProLiant line that it calls Advantage PAQ. The ProLiant 400 6/450 Advantage PAQ, listing for just $1,700, features a 450- MHz Pentium II processor, while the $5,500 ProLiant 1600 6/500 Advantage PAQ workgroup server draws on the performance capabilities of the 500-MHz Pentium III engine.
Sales to date indicate that a market exists in Japan for equipment running the Linux operating system. To tap that demand, particularly among small businesses, IBM JAPAN LTD. has tied up with 10ART-NI CORP. and OTSUKA SHOKAI CO., LTD. to deliver complete solutions based on the freeware version of Unix. 10art-ni will combine IBM Japan's low-cost Netfinity 1000 servers with dial-up routers and uninterruptible power supplies for marketing by Otsuka Shokai. The PC retailer, which has priced the package from $3,000, is projecting sales around 2,000 units a year. Including support and training, the trio believes that this new business can produce annual revenues on the order of $33.3 million.
With Japan's PC market expanding strongly, American competitors are tweaking their product lineups to capitalize on this growth. The repositioning involves not just introducing products with all the latest bells and whistles for the corporate or the home market but also catering to the demand for compact, Japan-tailored products and to value-conscious buyers. For instance, COMPAQ COMPUTER CORP. unveiled the Deskpro EN SF Series, a line of small form-factor commercial PCs for crowded environments that is said to take up 36 percent less space than conventional desktop PCs without compromising performance. The 20 Deskpro EN SF models are split equally between machines powered by a 466-MHz Celeron processor and those with a 550-MHz Pentium III chip. Buyers have a choice of 64 MB or 128 MB of SDRAM and a 6.4-GB or a 10-GB SMART II Ultra ATA hard drive. A 24X slimline CD-ROM is optional, as is 13.5 GB of storage. An integrated network controller and graphics accelerator are included in the starting price of $1,200. .....Taking the small form-factor idea another step, COMPAQ COMPUTER CORP.'s subsidiary introduced the Presario 3500, a line designed specifically for Japan that occupies 70 percent less space than typical desktops. A representative model, the Presario 3505, comes with a 400-MHz Celeron processor, 64 MB of internal memory and a 6.4-GB hard drive for about $1,200 excluding a monitor.
Direct marketer DELL COMPUTER CORP. also thinks that a reduced footprint will sell desktop systems to companies. Its new OptiPlex GX1 line, the company's first such product, is 44 percent smaller than its predecessors. The Model 450S features a 450-MHz Pentium III chip, 64 MB of RAM and a 6.4-GB hard drive. It lists for $1,200, again without a monitor. For IT managers who are just as interested in price as in compactness, Dell's subsidiary is offering a space-saving machine that starts at $830 without a display. The OptiPlex GX100 runs off a 400-MHz Celeron engine.
Fellow direct seller GATEWAY 2000, INC. is aiming at the high end of the desktop market with the latest addition to the Profile line of stylish, space-saving, all-in-one equipment. The XL, which costs $2,100, comes with Office 2000 Personal preinstalled. It also features a wireless keyboard. .....Bringing to Japan a strategy that has attracted first-time buyers in the United States, GATEWAY 2000, INC. is selling a system that includes one year of free Internet access in its affordable price of $915. The GP6-400C has a 400-MHz Celeron processor and a 15-inch display.
Going after the high end of the corporate market, HEWLETT-PACKARD JAPAN LTD. added to its NetVectra family five models running the Japanese-lan-guage version of Windows NT Workstation 4.0. Priced from $1,700 to $2,400, including a network interface adapter, the machines range from a system with a 400-MHz Celeron chip to one powered by a 450-MHz Pentium III processor and providing 8.4 GB of disk storage.
IBM JAPAN LTD. has redefined the top of its mainstream PC 300PL desktop/minitower line with the release of a model sporting a 550-MHz Pentium III processor and including a 13.5-GB hard drive. Pricing starts at $2,400. .....Office 2000 Personal is being preinstalled on six of IBM JAPAN LTD.'s home-targeted Aptiva models. These machines list for $1,700 and up. The software package also is a selling point of three new ThinkPad notebook computers that have been beefed up in other ways as well. For example, the ThinkPad 600E, which IBM Japan is selling direct for $3,600, features a 400-MHz mobile Pentium II processor, a 13.1-inch TFT LCD display, a 10- GB hard drive, a DVD-ROM drive and a video-out port. For more budget-minded corporate buyers, there is the $2,000 ThinkPad 390E with a 366-MHz mobile Celeron chip, a 12.1-inch TFT LCD screen and 4.8 GB of storage.
By introducing a notebook computer that costs just $1,400, COMPAQ COMPUTER CORP. hopes to make inroads among Japanese who might be interested in buying a computer but do not feel that they have space for a desktop model. The company was able to hold down the price of the Presario 1245 by using a 333-MHz AMD-K6-2 processor and installing a smaller-than-normal 32 MB of internal memory and a 3.2- GB hard drive. However, the machine has a CD-ROM drive and comes with e-mail software.
For anyone in the business world who worries about the security of the information stored on his or her notebook's hard drive should the machine be lost or stolen, COMPAQ COMPUTER CORP. has a solution. Five new Armada notebook models feature the company's DriveLock password-protection technology. These products range from the $2,000 Armada M300, which has a 333-MHz mobile Celeron processor, up to the Armada E700, a machine with a 400-MHz mobile Pentium II chip that lists for $5,700.
The world's leading provider of enterprise storage systems and related software and services is taking a number of steps to ensure that this distinction extends to the Japanese market. For starters, EMC CORP. opened a customer service facility in Tokyo to provide corporations using its equipment with 24x7 technical support. The center, which is linked to the company's major support hubs at headquarters in Hopkinton, Massachusetts and in Cork, Ireland, also is providing product validation, new product qualification and sales support to customers. The opening of the support center is one reason that EMC's subsidiary is projecting an increase in staffing in 1999 to 400 from about 260, but the company also wants to hire more systems engineers and sales people. Additional software developers are expected to be hired as well for EMC's Japan Technology Center. Set up last November, this facility has just been moved to Kawasaki in Kanagawa prefecture.
In an aggressive move by INTERNATIONAL BUSINESS MACHINES CORP. to recapture its former leadership position in disk storage, the company rolled out the IBM Enterprise Storage Server in Japan and elsewhere. Of its many selling points, IBM is touting in particular the system's ability to work with heterogeneous hosts — S/390 mainframes/servers, Unix platforms, Intel-based systems running Windows NT or in a NetWare environment and AS/400 — and with a variety of interfaces, including ESCON, Fibre Channel and Ultra SCSI. ESS, which pointedly was code-named Shark, can scale from 420 GB to more than 11 terabytes, a record capacity, according to IBM. Its performance is enhanced by two four-way SMPs (symmetric multiprocessors), the Serial Storage Architecture and a large cache with additional battery-backed memory. IBM JAPAN LTD. priced the base configuration of the Enterprise Storage Server at $516,600.
Market newcomer XIOTECH CORP. gave KANEMATSU ELECTRONICS LTD. nonexclusive rights to distribute its centralized storage subsystem and supporting REDI software family. Dubbed a SAN (storage area network) in a Box, the Eden Prairie, Minnesota manufacturer's MAGNITUDE provides up to 3 terabytes of centralized storage that can be continuously accessed by several heterogeneous servers.
CASTLEWOOD SYSTEMS, INC. added FUJIKURA LTD. as a manufacturer of the 2.2- GB ORB drive and ORB media. As part of the deal, the Japanese producer of electric wire and cable invested $3 million in Castlewood, acquiring a 10 percent stake in the Pleasanton, California company. Fujikura will make the ORB drive, the world's first removable hard drive to use magnetoresistive head technology, at a Thai subsidiary. It is targeting initial output of at least 20,000 units a month and full-capacity production of more than 1 million units in 2001. The ORB drive is marketed exclusively in Japan by SHINNICHI ELECTRONICS CORP. (see Japan-U.S. Business Report No. 358, July 1999, p. 16).
By the end of the year, QUANTUM CORP. and HITACHI MAXELL, LTD. hope to commercialize a digital linear tape drive that can deliver 100 GB (uncompressed) of storage capacity per cartridge with a fast 10-megabits-per-second data transfer rate — more than enough to meet the backup, archival and disaster recovery requirements of midrange servers. The Milpitas, California company is responsible for the tape drive, while its development partner is handling the media cartridge. Providing the foundation for the Super DLTtape system are several tape-drive technical breakthroughs made by Quantum that in time could bring about a storage capacity of 500 GB (uncompressed) per cartridge with a transfer rate of up to 40 Mbps.
GIGANET, INC. signed ITOCHU TECHNO-SCIENCE CORP. to distribute its server clustering solution in Japan and elsewhere in Asia. cLAN server cluster interconnects link Intel architecture-based servers, enabling them to synchronize and replicate information at high speeds with what the Concord, Massachusetts manufacturer says is little or no performance penalty. Moreover, the product's plug-and-play capabilities enable firms to scale clustered servers incrementally and transparently. In Japan, cLAN pricing starts at $20,700.
It now is possible for PC users to operate their machines with one hand, thanks to the Cut Key keyboard from the subsidiary of Fremont, California-based LOGITECH, INC. The small-footprint product has just 22 keys that are arranged like an adding machine, but these keys perform all standard PC keyboard functions. Cut Key costs $125.
LCD module maker THREE-FIVE SYSTEMS, INC. tapped MITSUI & CO., LTD. to facilitate its entry into the Japanese market. The marketing, sales and distribution agreement covers all three of the Tempe, Arizona firm's advanced display products in or nearing production. Both companies think that Three-Five's LCoS (liquid crystal on silicon) microdisplay technology, which is scheduled for production during the first quarter of 2000, might have the greatest near-term market potential. Mitsui will market this thumbnail-size display that delivers the resolution of high-definition television screens for such applications as rear-projection systems, cellular telephones, personal information appliances and portable multimedia terminals. Other possible uses for the microdisplay are HDTV sets and computer monitors, especially large-screen products.
Hoping to take sales away from SEIKO EPSON CORP. and CANON INC. in the SOHO (small office/home office) ink-jet printer market, LEXMARK INTERNATIONAL, INC.'s subsidiary introduced the Z series. This line offers the same image quality, printing speeds and other functions as the entrenched competition's products, but they are more affordable. The high-end Z51 already is on the market; it lists for $415. This fall, the Z11 will be on store shelves. It is a replacement for last year's low-end CJP1100. With the launch of the aggressively priced Z series, Lexmark believes that it can sell 150,000 ink-jet printers in 1999, triple the 1998 total.
The lightest and smallest projector ever built by INFOCUS SYSTEMS, INC. will be available in September from ADVANCED PERIPHERALS TECHNOLOGIES, INC. The LP330 "Dragonfly" weighs just 4.8 pounds and is the size of a hardback book, yet it provides a true XGA (extended graphics array) resolution of 1024 x 768 pixels bright images and true-to-light colors with its DLP (digital light processing) display. APTi is a Fujisawa, Kanagawa prefecture-based joint venture between IBM JAPAN LTD. and TOSHIBA TEC CORP. InFocus recently agreed to provide its ultraportable projectors to TOSHIBA CORP. on an OEM basis (see Japan-U.S. Business Report No. 358, July 1999, p. 17).
An exchange rate of ¥120=$1.00 was used in this report.
In other sign that knowledgeable investors believe that commercial property prices are nearing the end of their long and steep fall or already have hit bottom, STARWOOD CAPITAL GROUP — a Greenwich, Connecticut investment management firm that invests in real estate assets on behalf of institutional investors and wealthy individuals — formed a joint venture with NOMURA REAL ESTATE DEVELOPMENT CO., LTD. to buy midsize Tokyo office buildings. The new partners already have acquired three office buildings with a combined value of more than $65 million through a special- purpose vehicle set up to channel all their investments. In addition to the money that Starwood Capital and Nomura Real Estate Development put up themselves, the venture will have access to nonrecourse financing from GMAC COMMERCIAL MORTGAGE CORP. and NIKKO SALOMON SMITH BARNEY LTD. Industry sources say that the total invested could hit $250 million.
The third AMC ENTERTAINMENT INC. megaplex movie theater has opened. The 18- screen AMC Holiday Square 18, located in Toyohashi, Aichi prefecture, is the Kansas City, Missouri company's largest facility in Japan. Two more megaplexes — the AMC Shinsei 16 in Gifu prefecture and the AMC Maihama 16 at Tokyo Disneyland in Chiba prefecture — are scheduled to open in the spring of 2000 (see Japan-U.S. Business Report No. 350, November 1998, p. 16).
An exchange rate of ¥120=$1.00 was used in this report.
HONEYWELL INC., a world leader in the fields of home and building controls and industrial automation equipment, slowly is putting together a replacement marketing network for the one lost when it parted ways with YAMATAKE CORP. in late 1997 (see Japan-U.S. Business Report No. 358, July 1999, p. 17). In its biggest move to date, the Minneapolis manufacturer named MATSUSHITA ELECTRIC WORKS, LTD. as the exclusive distributor of its air-conditioning controls. The sales tie-up could lead to joint product collaboration, sources say.
A more energy-efficient fluorescent bulb for stores and offices will be released soon by HITACHI GE LIGHTING, LTD. The equally owned venture between GENERAL ELECTRIC CO. and HITACHI, LTD. says that when the 7.5-foot-long, 110-watt FHF86EX-N bulb is used with an inverter, power consumption is 22 percent less than with other products in this category. That savings, the company hopes, will help it sell 240,000 bulbs a year. For several years, Hitachi GE Lighting has been trying to boost the commercial/industrial side of its business, where GE is strong.
The IEEE 1394 standard for enabling the convergence of computing, consumer electronics and networking technologies is starting to take hold in Japan. One sign of this is the decision by ZAYANTE, INC. (formerly Firefly, Inc.) to convert its Tokyo representative office, which was set up last year, into a subsidiary. The Scotts Valley, California company provides complete 1394 interoperability solutions through hardware (silicon intellectual property), software and testing products and services. Its goal is to help manufacturers develop 1394-compliant product designs cost-effectively, accurately and quickly. Zayante's subsidiary is looking for revenues of $833,300 in its first year of operation.
The subsidiary of big connector maker MOLEX INC. has developed a 1394-compatible product for plastic-encased fiber-optical equipment that can handle data transmissions among diverse electronics products at speeds up to 400 megabits per second, the target for the current version of the standard. Designed for video cameras, videocassette recorders and other digital home appliances, the compact connector should be on the market by yearend. With the backing of seven Japanese consumer electronics giants, Lisle, Illinois-headquar-tered Molex is trying to make its connector the industry standard.
By the end of 1999, LITTELFUSE, INC.'s subsidiary expects to be selling its product line directly to Japanese automotive makers and their parts suppliers. Since the Des Plaines, Illinois producer opened a subsidiary in Yokohama in 1997, electronic parts trader PICO, INC. has been in charge of distribution. This Tokyo company will continue to market Littelfuse's fuses for electronic devices even after the U.S. firm takes over sales of automotive fuses. One focus of Littelfuse's new marketing team will be value- added products, such as fuses for electric and hybrid vehicles. The subsidiary also has enlisted the help of FUJIX K.K., a Tokyo vehicle parts maker and distributor, to develop the aftermarket for its fuses.
The marketing unit of Andover, Massachusetts-basedVICOR CORP., the largest merchant manufacturer of high-density power components, is projecting first-year sales of $4.2 million for its second-generation, 48V input family of DC-DC converter modules. Developed for communications and other distributed power systems, the new converter products are said to provide better performance and greater reliability as well as cost advantages. Three package sizes — micro, mini and maxi — are available at prices ranging from $105 to $215.
For years, SAWYER RESEARCH PRODUCTS, INC., one of the world's largest quartz crystal growers, has shipped what is called bulk-wave quartz directly to customers in Japan. Recently, though, the Eastlake, Ohio-headquartered company opened a sales office in Yokohama. That move was part of its decision to try to tap the market for wafers for SAW filters, which are used in the fast-growing mobile communications equipment business. Buyers of quartz for SAW filters require after-sale follow-up, however, hence the sales office. Sawyer Research, which has roughly 30 percent of the world market for quartz SAW wafers, hopes to capture 10 percent of the Japanese market for this product within a year. Adding in wafers made from such new materials as lithium tantalate and langasite, the target is 15 percent.
An exchange rate of ¥120=$1.00 was used in this report.
To the surprise of virtually no one in the know, CALTEX CORP. has decided to end its 50-year participation in Japan's oil-refining industry. The slow growth of the oil business and the elusiveness of profits were the decisive factors. The joint venture of CHEVRON CORP. and TEXACO INC. agreed to sell its half interest in refiner KOA OIL CO., LTD. to NIPPON MITSUBISHI OIL CORP., Japan's top distributor of oil products and the sole marketer of the midsize refiner's output, for roughly $217.8 million. Koa Oil, in which Caltex has been the majority owner since 1951, operates a 127,000- barrel-per-day refinery in Marifu, Yamaguchi prefecture and a 125,000-barrel-per-day refinery in Osaka. In FY 1998, it lost $88.3 million. A three-year restructuring program now is underway. Despite the sale of its stake to Nippon Mitsubishi Oil, which currently owns 5.8 percent of the refiner, Caltex will continue to supply crude oil to Koa Oil. The company's coming exit from Japan's oil-refining industry was signaled in March 1996 when Caltex sold its 50 percent share in NIPPON PETROLEUM REFINING CO., LTD. to one of the firms that formed Nippon Mitsubishi Oil this past spring. With the completion of the sale of Koa Oil, scheduled for late August to mid-September, Caltex's business in Japan will be limited to lubricants.
An exchange rate of ¥120=$1.00 was used in this report.
Two more transpacific alliances are convinced that the complete deregulation of brokerage fees, coming October 1, will create a surge of interest in on-line trading. One tie-up involves MICROSOFT CORP. with ITOCHU CORP., DAI-ICHI KANGYO BANK, LTD., ASAHI MUTUAL LIFE INSURANCE CO. and perhaps other companies in JAPAN ONLINE SECURITIES, INC. As early as this fall, the joint venture will offer round-the-clock securities trading via a Web site as well as by phone or fax; other means, such as interactive television, could be used in the future. All the details have not been finalized, but trader Itochu apparently will be the majority owner of Japan Online Securities, which is aiming for 300,000 brokerage accounts in five years. The other grouping pairs WIT CAPITAL GROUP, INC. with MITSUBISHI CORP. and TRANS COSMOS INC. (see Japan-U.S. Business Report No. 359, July 1999, p. 18). The two Japanese companies will put up $8.6 million to capitalize WIT CAPITAL JAPAN, INC. The New York City partner, the first on-line investment banking firm, will own 60 percent of the joint venture and contribute its expertise to the business. Wit Capital Japan, which hopes to be operational early in 2000, will develop electronic brokerage services using the Internet and the Web to offer individual investors the chance to invest in public offerings by Japanese companies and in domestically organized venture capital funds. The new company also will provide a variety of investment banking services to firms developing Internet businesses. Japan Online Securities and Wit Capital Japan will be competing for on-line brokerage customers with companies backed by E*TRADE GROUP, INC., a DONALDSON, LUFKIN & JENRETTE INC. affiliate and CHARLES SCHWAB & CO., INC.
Add sales of investment trusts (Japanese-style mutual funds) to the already long list of financial services that GE CAPITAL CORP. provides in Japan. GE ASSET MANAGEMENT CORP. will be the sponsor of the GE Japan Equity Focus fund, which will invest in anywhere from 20 to 40 Japanese stocks. This company was formed after GE Capital acquired an investment advisory firm as part of its March 1998 agreement to come to the rescue of TOHO MUTUAL LIFE INSURANCE CO. The GE Japan Equity Focus fund will be sold through NIPPON GLOBAL SECURITIES CO., LTD. as well as over the Internet and via other channels.
FIDELITY INVESTMENTS JAPAN LTD. will have a complete package of services ready for companies whenever the government authorizes 401(k) or defined- contribution pension plans. The go-ahead is expected sometime during FY 2000. Fidelity not only will manage the money that employees put into their retirement accounts but also will handle all the paperwork and other administrative tasks for the plan sponsor and educate people about the new retirement vehicle. The world's largest mutual fund manager will face considerable competition in this part of the financial services market, however, since any number of Japanese companies plan to move into the defined-contribution pension plan business.
J.P. MORGAN TRUST BANK LTD. is marketing to corporate pension plan administrators an actively managed international mutual fund that uses stock and bond futures contracts to achieve a target return of nearly 9 percent. The MORGAN GUARANTY TRUST CO. affiliate recommends the fund to companies that normally divide their pension plan assets among a number of money managers to minimize the downside risk.
The first multimanager funds for individual investors are available in Japan. Tacoma, Washington-based FRANK RUSSELL CO. is providing these risk-re-ducing investment products under an agreement earlier this year with BANK OF TOKYO- MITSUBISHI, LTD. (see Japan-U.S. Business Report No. 355, April 1999, p. 17). Forty-eight of the top commercial bank's branches now offer the M-CUBE Russell Investment Program. It should be an option at all 327 of Bank of Tokyo-Mitsubishi's nationwide offices by yearend. Specially trained bank representatives help clients with asset allocations and recommend portfolios of multimanager funds based on their investment objectives and risk tolerance.
Foreign expertise still is much in demand by Japanese financial services providers interested in offering investment trust products to their clients. For example, WELLINGTON MANAGEMENT CO., L.L.P. is working with TOYO TRUST & BANKING CO., LTD. on a diversified international fund. The Boston investment manager currently oversees the trust bank's U.S. stock investments. Similarly, BEAR STERNS ASSET MANAGEMENT INC. helped SAISON INTEX CORP. to create a foreign currency-denominated investment trust fund. The American firm is responsible for investing the fund's assets in foreign bonds with input from the member of the CREDIT SAISON CO., LTD. group.
The first product that CITIGROUP INC. developed for exclusive sale by NIKKO SECURITIES CO., LTD. to individual investors is a dollar-denominated bond whose returns are linked to the trading performance of 20 American Internet stocks. The minimum investment amount is $10,000. The American financial services giant expects to come up with other investment vehicles that Nikko Securities can market to its customers.
Tying up the loose ends in Japan from the acquisition of BANKERS TRUST CORP. by DEUTSCHE BANK AG, the two banks' investment management and trust banking operations are being merged. The combined money management business will go by the name of DEUTSCHE ASSET MANAGEMENT (JAPAN) LTD. At start-up, it will be managing nearly $9.2 billion. The trust banking activities of Bankers Trust and Deutsche Bank, which together have $20 billion in assets under management, will be merged as DEUTSCHE TRUST BANK LTD. As a group, Deutsche Bank affiliates already rank as the top foreign asset manager in Japan. Within five years, though, executives hope that they will be among the five biggest domestic and foreign asset managers in the country with client assets on the order of $83.3 billion. New York City hedge fund CERBERUS PARTNERS, L.P., which has made a name for itself in Japan by buying from banks and failed nonbank financial institutions nonperforming assets with a book value of nearly $14.2 billion in just 15 months, will open an office in Osaka to expand its purchases of real estate-backed bad loans in that part of the country. The company reportedly still has $1.5 billion earmarked for asset acquisitions in Japan.
In what both call a win-win deal, the subsidiary of FORD MOTOR CREDIT CO., the world's biggest provider of automotive financing, bought MAZDA CREDIT CORP. for $66.7 million. The former MAZDA MOTOR CORP. unit's 14 branches generated revenues of $83.3 million in FY 1998. The transaction frees Mazda, which effectively is controlled by Ford through a 33.4 percent ownership stake, to concentrate resources on its core business of building and selling cars and trucks while also trimming the company's net debt. Analysts suggest as well that buyers of Mazda vehicles will be able to get more favorable financing terms because of Ford Motor Credit's market power. For FORD CREDIT JAPAN INC., which provides financing for purchases of Ford vehicles, the acquisition represents a major expansion of its operations. Mazda Credit will continue to operate under that name.
GE CAPITAL FINANCIAL INC., which markets corporate bank cards to multinationals, has teamed with HITACHI CREDIT CORP. to extend its travel card products and services to Japan. Under the alliance, Hitachi Credit will issue yen-denominated MasterCard corporate credit cards to big international companies with local operations, send out Japanese-language statements and provide other in-country cardholder services. Multinationals participating in the program receive from GE Capital Financial consolidated global statements that give them a better idea of how their travel money is spent.
An exchange rate of ¥120=$1.00 was used in this report.
It took six months, but OUTBACK STEAKHOUSE INC. has found a partner to help it move into the Japanese market (see Japan-U.S. Business Report No. 353, February 1999, p. 19). The Tampa, Florida restaurant chain has signed an agreement with WDI SYSTEMS INC., which already has such American restaurant brand names as Hard Rock Cafe and Tony Roma's in its portfolio, to form a company to franchise as many as 200 Outback locations in time.
Fresh-baked cinnamon rolls could be available in central Tokyo by yearend and eventually at other stores in central Japan. Seattle's CINNABON, INC. licensed SUGAKICO SYSTEMS CO., LTD. of Nagoya to build 60 Cinnabon bakeries/cafes over the next five years, mostly in the Tokyo metropolitan area. The typical Cinnabon location is expected to be about 860 square feet and to have seating for 60 customers as well as on-site baking equipment. Sugakico Systems, which operates some 330 fast-food restaurants, expects each Cinnabon bakery to generate annual revenues of $666,700. Large cinnamon rolls will cost about $2.90 each, while smaller ones will be about $2.10. Since October 1998, Cinnabon has been owned by Atlanta-based AFC ENTERPRISES, INC.
SEATTLE'S BEST COFFEE, INC., another member of AFC ENTERPRISES, INC.'s brand portfolio, also has aggressive plans for Japan. It signed an agreement with NIPPON BRUNSWICK CO., LTD., a joint venture of Lake Forest, Illinois-based BRUNSWICK CORP. and MITSUI & CO., LTD., to develop 100 SBC espresso cafes in Tokyo as well as in Kanagawa, Ibaraki, Chiba, Gunma, Tochigi and Saitama prefectures. At the same time, Seattle's Best Coffee gave Osaka's MIFUNE CORP. exclusive rights to franchise 67 cafes, kiosks and coffee carts in Osaka, Kyoto, Wakayama, Hyogo, Fukuoka and Okinawa prefectures. The prototype SBC cafe for Japan is 1,300 square feet with seating for 50 customers. Sales are projected at $83,300 a month. Seattle's Best Coffee is a relative latecomer to Japan. Hometown rivals STARBUCKS COFFEE CO. and TULLY'S COFFEE CORP. already have stores open.
An exchange rate of ¥120=$1.00 was used in this report.
BLOCKBUSTER INC. might be synonymous with video rentals in the United States, but the company found Japan tough going. Eight years after moving into the market, the VIACOM INC. unit has called it quits. In that time, it opened just 40 of 1,000 planned stores and lost money in 1998 on revenues of roughly $25 million. Blockbuster sold its half interest in the company running the chain to partner FUJITA & CO., LTD., which also is a part owner of MCDONALD'S CO. (JAPAN) LTD. Analysts partly blame Blockbuster's failure to expand as rapidly as it had planned to its preference for opening large stores in prime commercial districts.
One American superstore operator has concluded that the big-box retailing concept is not the most appropriate for Japan, where prime commercial space in major cities is extraordinarily expensive. For the time being at least, OFFICE DEPOT, INC., which took over its subsidiary this past spring (see Japan-U.S. Business Report No. 355, April 1999, p. 19), plans to open discount office supply stores that have roughly 5,400 square feet of selling space rather than multiples of this figure. Three stores that recently were opened in central Tokyo fall into that new size class. Their location in busy business areas of the capital also reflects a decision by the world's largest seller of office products to limit its expansion to the Tokyo metropolitan area.
The 83rd TOYS "R" US INC. store in Japan, located in Sakai, Osaka prefecture, has opened its doors. Like other recent additions to the chain, this 21,500-square-foot facility has a different floor plan than older stores, one intended to make it easier for customers to find specific products. Similarly, the Sakai outlet houses a Babies "R" Us section. At the same time as it opens new stores, Toys"R" Us's subsidiary is starting to renovate some of its oldest locations. For certain stores, like two in Kyoto prefecture, that process includes converting about 20 percent to 25 percent of the selling space to the Babies "R" Us format.
An exchange rate of ¥120=$1.00 was used in this report.
The big Rockwell Automation unit of ROCKWELL INTERNATIONAL CORP., the world's largest supplier of high-performance automation products through its Allen-Bradley and Reliance Electric operations, now owns 50 percent of RELIANCE ELECTRIC JAPAN LTD. It acquired an additional 5 percent stake from partner ULVAC JAPAN, LTD. for an undisclosed price. REJ manufactures durable-speed electronic drives for AC/DC motors at a Yokohama factory. It had revenues of $59.2 million in 1998. Sales of REJ products are handled by Rockwell Automation, which has had a presence in Japan since 1980 and provides sales and support services through offices in Tokyo, Osaka and Nagoya.
In a breakthrough deal, garbage disposal systems manufactured by HYDROMAID INTERNATIONAL INC. will be installed in condominiums that AGA GROUP of Kanazawa, Ishikawa prefecture is developing. The Draper, Utah company's product is powered exclusively by water. That feature appealed to the developer, which is marketing its condos as environmentally friendly. The initial order covers HydroMaid disposal systems for 1,000 units in 14 buildings scattered around Japan. The installed cost of the system is about $333,300 for 100 units, including a wastewater treatment tank.
With its recently developed automatic low-pres-sure molding machine for making net shape parts from ceramic and metal materials, PELTSMAN CORP. plans to move back into the Japanese market. First, though, it wants to line up a distributor. The Minneapolis company had been selling a manually operated molding machine in Japan, but that business ended several years ago. The new MIGL-371 molding system lists for $58,900.
MAGNUM MANUFACTURING INC., a Phelan, California maker of torches used to cut metal, named ASAHI CHEM-MACHINERY CORP. as its exclusive distributor. The Kobe company is carrying the portable truck-mounted MAG6000, which has a heavy- duty MagmaFusion torch, and the portable MAG4000, which weighs just 18 pounds. As a set, they cost $2,500. Target markets for the products are ship repair companies and demolition businesses. Magnum expects to ship 500 sets to Asahi Chem- Machinery by the end of 1999.
In what must have been an in-house record for product launches in one month, SHIN CATERPILLAR MITSUBISHI LTD. released four products. New on the market is the CAT D300E articulated dump truck for use in quarries and civil engineering projects. Weighing only 24.3 tons but able to haul as much as 30 tons of material, it features improved traction thanks to a system that keeps all six wheels rotating at the same speed. Shin Caterpillar Mitsubishi expects to sell 10 of the $500,000 machines in the first year of marketing. The company also expanded its lineup of hydraulic excavators, adding the 72-ton CAT 365BL REGA. Designed to load dump trucks in the 10-ton to 40-ton class, the machine has a 3.5-cubic-yard bucket, making it the third-largest hydraulic shovel that CATERPILLAR INC. produces. Its Japanese affiliate is optimistic that it can sell 40 units over the next 12 months at prices starting at $633,300. A self- propelled concrete crusher is available as well from Shin Caterpillar Mitsubishi. The MRG40JG crushes pieces of concrete from demolished buildings, in the process separating out rocks and other debris so that the concrete can be recycled as aggregate. Able to handle as much as 235 tons of concrete an hour, the crusher is priced around $433,300. First-year sales of this product are targeted at 15 units. Finally, the Caterpillar-MITSUBISHI HEAVY INDUSTRIES, LTD. venture hopes to sell in the next year 500 MM57SR hydraulic mini-excavators. This 5.5-ton-class product with its 0.3-cubic-yard bucket goes for about $96,700.
The Kohler Power Systems generator division of KOHLER CO. has introduced through exclusive distributor TOMINAGA & CO., LTD. its largest generator set, a 2,000-kilowatt unit that can be powered by either gasoline or natural gas. Like competing products, the Kohler generator is designed to be used either as a primary source of electricity or as a standby source of power. What sets its system apart, the company says, is that it comes on-line faster. In Japan, though, the main marketing advantage of the Kohler generator could be price since it costs only about two-thirds of what Japanese manufacturers charge for 2,000-kW generators.
An exchange rate of ¥120=$1.00 was used in this report.
Broadening its product lineup, EASTMAN KODAK CO.'s subsidiary introduced three types of A4-size Kodak Inkjet Photo Letter Paper for photo-quality reproduction with all popular ink-jet printers. The most expensive paper — $19.60 for a box of 50 sheets — provides a product comparable in finish to a photo because of the thickness of the paper and its glossy surface. The Kodak unit also is selling a