For better or for worse, JAPAN TOBACCO INC. now owns what were the non-U.S. tobacco operations of RJR NABISCO HOLDINGS CORP. (see Japan-U.S. Business Report No. 355, April 1999, p. 11). It ended up paying RJR Nabisco slightly less than $7.8 billion for these businesses. JT also repaid a $5 billion bridge loan used to finance part of the purchase. Already, though, the company has downgraded the expected near-term business results of JT INTERNATIONAL BV, in part because of weak sales in Eastern Europe. Sales over the May- December period now are projected at $3.3 billion compared with the $4 billion estimated earlier, with earnings before interest, taxes, depreciation and amortization predicted at $250 million, down from an initial $430 million.
Beginning in November, SEKISUI JUSHI AMERICA, INC. will make plastic-covered steel garden poles at a new plant in Cartersville, Georgia. The $3.2 million facility is adjacent to the SEKISUI JUSHI CORP. subsidiary's plastic strapping band factory. The poles, in diameters of 8mm and 11mm, will be shipped to a Tustin, California distributor for sale to home centers. Sekisui Jushi America believes that the new product will add $3 million to its annual revenues in the first year and about $5 million after three years.
Osaka's NIPPON PILLAR PACKING CO., LTD. formed a subsidiary in California to boost U.S. sales of its fluorocarbon resin connectors and other mechanical seals. Marketing will be targeted at semiconductor manufacturers and other producers that require products with high chemical and leak resistance for use in their operations. Nippon Pillar is projecting American sales of $2.3 million in FY 1999 and $3.1 million in FY 2000.
Although all the details have not been finalized, MITSUBISHI HEAVY INDUSTRIES, LTD. will be a key Japanese industry participant in the work on a sea-based theater missile defense system that Washington and Tokyo agreed to research in mid-August. The five-year or six-year transpacific project will focus on an improved version of the SM-3 missile used in the U.S. Navy's Theater Wide missile defense program. MHI already has received an $8.3 million government contract keyed to Japan's part of the program. That involves the development of a lightweight nose cone, an infrared search and tracking sensor, a kinetic warhead equipped with course correction and a propulsion system for a second-stage rocket. MHI will work closely with RAYTHEON CO.'s Defense Systems unit in Tucson, Arizona, the prime contractor for the Navy's Theater Wide system.
An exchange rate of ¥108=$1.00 was used in this report.