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No. 360, September 1999

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American Companies in Japan


One of the biggest makers of self-adhesive labels and other office paper products is moving into Japan with plans to quickly capture a significant share of this market. AVERY DENNISON CORP. is teaming with HITACHI MAXELL, LTD. to sell some 200 Avery-brand and cobranded self-adhesive labels, customized card products, related software and other office products to PC users with desktop printers. The Pasadena, California company will own 51 percent of AVERY DENNISON-MAXELL CO. Using Hitachi Maxell's marketing channels, the joint venture expects to have its products in outlets across Japan by January 2000. The Tokyo-headquartered business, to be staffed by managers and employees from both parents, is going after 30 percent-plus of the $100 million market for labels and customized card products, with annual sales projected at $26.6 million in three years. In time, Avery Dennison-Maxell plans to have a domestic manufacturing capability.

Beginning January 1, 2000, CALLAWAY GOLF CO. will directly market its golf clubs and golf balls in Japan. SUMITOMO RUBBER INDUSTRIES, LTD. has had this job for the past 11 years. For reasons that were not given, the Carlsbad, California maker of the popular Big Bertha line of clubs and its distributor decided to end their relationship when the current marketing contract expires at the end of this year. Sales of Callaway products totaled a reported $88.5 million in 1998. The firm already has a wholly owned Japanese subsidiary.

Combining technology licensed from TEXACO INC. for the production of fuel from sewage sludge with its own proprietary know-how, TERRABOND CO., LTD. codeveloped with MN ENGINEERING CO., LTD. a production process for what it calls combustible refuse slurry. In simplified terms, the system for making this environmentally beneficial fuel involves the separation of combustible organic household, industrial and commercial waste into low heat-generation products, such as garbage and paper, and those like waste plastics that have high heat-generation capabilities. These products then are carbonized, turned into an oil substance and/or pulverized into a slurry. Several mixings later, the slurry is transformed into a fuel. One of the key attractions of the CRS system is its ability to separate solids and liquids from the same waste. Tokyo-based Terrabond, an environmental plant developer, now is seeking companies to utilize its fuel production system. Texaco signed the licensing agreement with Terrabond in January 1999. The arrangement explicitly excludes the White Plains, New York-headquartered oil major's gasification technology.

Two AMERICAN FIRETECT, INC. fire-retardant chemicals already are on the market in Japan through distributor CUBIC CORP.: the Safe-T-Guard fire retardant for on-bolt fabric, the Feasterville, Pennsylvania company's key product, and a Safe-T-Guard fire retardant for the treatment of wood products. Cubic, a specialty chemical trader located in Tokyo, now is in the process of introducing two other American Firetect products. One is a paint that, used on boats, enables barnacles, seaweed and other material sticking to the vessel's surface to be washed off. The paint also can be applied to the inside of pipes in sewage treatment plants, thereby allowing built-up sludge to be removed through washing. The other new product controls odors in, for example, water-treatment facilities.

YLA CELLULAR PRODUCTS CO., a Livermore, California manufacturer of specialty honeycomb materials sold under the ULTRACOR brand, named TOKYO TECHNOLOGIES, INC. to sell two of its cutting-edge products to Japanese aerospace companies. ULTRACOR is a very low-density honeycomb core material designed for use in highly weight-sensitive structures, including satellite antenna reflectors and solar arrays. Unlike the hexagonal or square cell shapes of other makers' honeycomb material, ULTRACOR incorporates a web construction. That difference means that a honeycomb can be produced from any structural fiber and that the fiber can be oriented in any desired direction or in more than one direction. The ULTRACOR products available in Japan are a carbon-carbon honeycomb with a 3/8-inch cell size and a one-fourth-inch quartz-fiber honeycomb. Tokyo Technologies' marketing rights extend to other Asian countries.

Medical institutions in Japan soon will have help in preventing and controlling infectious diseases in their facilities. The initiative is spearheaded by COLBY GROUP INTERNATIONAL, INC. of Edmonds, Washington, which specializes in transpacific biomedical business and technical relations. It has enlisted the cooperation of the ASSOCIATION FOR PROFESSIONALS IN INFECTION CONTROL AND EPIDEMIOLOGY, INC., a nonprofit, voluntary, international organization based in Washington, D.C., to establish an APIC-like group of infection-control professionals in Japan. This organization will draft voluntary standards for preventing and controlling infectious diseases in medical settings. Colby Group then plans to tie up with Japanese pharmaceutical companies in an organization that will help hospitals and other medical institutions meet the new standards.

MEDTAP INTERNATIONAL, INC., a health-services research firm based in Bethesda, Maryland, has teamed with Tokyo's CRECON RESEARCH & CONSULTING, INC. to offer what they call pharmacoeconomics consulting and research services to drug companies around the world. MEDTAP will contribute to the alliance its technical expertise as well as business support in the United States and Europe. Crecon, in turn, will provide its technical and market research knowledge of the Japanese market. With this input, MEDTAP will be better positioned to serve its multinational clients on a global basis. At the same time, Crecon should be able to respond more effectively to the growing demand in Japan for socioeconomic evaluations of health-care issues.

In a deal that should help fuel the growth of the investment trust or mutual fund industry in Japan, STANDARD & POOR'S CORP. acquired IFIS INC., one of the country's few independent sources of information and analysis on domestic mutual funds. The three- year-old Tokyo company provides data on 1,800 Japanese open-ended funds and 3,200 closed ones. IFIS market trackers have joined the analytical team that S&P has had in Tokyo since 1986. The acquisition, the terms of which were not disclosed, also bolsters S&P's claim of being the world's leading provider of independent mutual fund information and analysis.

Another American advertising agency is altering its relationship with its Japanese partner. In this instance, YOUNG & RUBICAM INC., which ranks fifth in the world in terms of billings, and DENTSU INC., Japan's top ad agency, are restructuring the ownership of three in-country joint ventures and 12 elsewhere in Asia in the hope of generating more business. In Japan, Y&R and Dentsu will switch their shareholdings, with the Manhattan firm becoming the minority (49 percent) partner in the trio. In the dozen non-Japanese companies, now equally owned, Y&R will increase its stake to two-thirds. Y&R and Dentsu have had a Manhattan tie-up since 1981.

An exchange rate of ¥113=$1.00 was used in this report.aaaaaa

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