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No. 362, November 1999

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Japanese Companies in the US


CHEMICALS

The decade-long relationship between MITSUI CHEMICALS, INC. and ROGERS CORP. has resulted in an agreement to make a flexible circuit board laminate used in the read/write head suspension assemblies of cutting-edge hard disk drives. Equally owned POLYIMIDE LAMINATE SYSTEMS LLC will build a factory in Chandler, Arizona to produce the specialty adhesiveless laminate, comprised of copper, polyimide and stainless steel. Custom-manufactured for demanding flexible circuit applications, the material now is turned out by Mitsui Chemicals at a Nagoya factory. PLS will sell the imported product until the Arizona plant is operational, which should be no later than 2003. A primary customer will be HUTCHINSON TECHNOLOGY, INC. of Hutchinson, Minnesota, the world's leading supplier of suspension assemblies for HDDs in the form of TSA Trace Suspension Assemblies. In addition to its ties to Mitsui Chemicals, Rogers, Connecticut- based Rogers has an equally owned joint venture with INOAC CORP. that makes high- performance elastomer products at facilities in Nagoya and Mie prefecture.

North American automotive production is so strong that JSP CORP. is having trouble meeting demand for the expanded polypropylene bead foam used to make the cores of the plastic bumpers found on most of today's vehicles. Accordingly, the dominant (three- quarters or so of the market) manufacturer of EPP bead foam in the United States has committed $2.8 million to build its sixth American production facility. Located in Tullahona, Tennessee, the factory is scheduled to be completed in July 2000. It will boost the capacity of JSP's Malvern, Pennsylvania subsidiary by 20 percent to roughly 18,500 tons a year. The Tennessee location, which will have a work force of 15, could add $11.3 million to JSP's annual U.S. revenues. The company's other EPP bead foam plants are in San Bernadino, California, Milledgeville, Illinois, Detroit, Butler, Pennsylvania and Monoca, Pennsylvania. It also has a Mexican facility.

Now that commercial production of biaxially oriented polyamide film has started at its Canadian joint venture, NICHIMEN CORP. has launched marketing of the material. Recently formed BIAXIS PACKAGING SALES, INC. of Arlington Heights, Illinois initially is targeting sales of the nylon film for meat packaging. It is projecting first-year revenues of $18.9 million. Manufacturer AMERICAN BIAXIS, INC., owned by the trader and a Canadian company, is located in Winnipeg, Manitoba.

In the latest phase of a relationship that dates back to 1980, FUJIKURA KASEI CO., LTD. and RED SPOT PAINT & VARNISH CO., INC. are pursuing the development of water- based, environmentally friendly paints for polypropylene plastic automotive parts. Coatings containing potentially harmful organic solvents now typically are applied to this material. Ecologically sound yet high-performance coatings for automotive plastics is an area in which the Evansville, Indiana-headquartered manufacturer has made a name for itself. A joint research and development team already is at work at Red Spot, hoping to commercialize products within three years. If successful, the partners say that they will consider forming a manufacturing and marketing venture aimed at supplying the paints to Japanese vehicle builders operating in North America.

Japan's number-two pharmaceutical company is positioning itself to better capitalize on business opportunities in the United States. For starters, SANKYO CO., LTD. will merge its two wholly owned U.S. subsidiaries at the end of 1999 in a move designed to accelerate decisionmaking and to forge closer ties between product development and marketing. SANKYO PHARMA INC., based in New York City, will be the surviving company. Moreover, to buttress its U.S. development capabilities, Sankyo planned to open in November a research facility in Edison, New Jersey. The center could have as many as 30 people on staff in the next few years. The company's current U.S. product development research efforts are spearheaded by a 35-member team in New York City. Sankyo also announced that by the middle of 2000, it expects to file its first independent new drug application with the Food and Drug Administration. CS-866 (olmesartan medoxil) is an oral antihypertensive angiotensin-II receptor antagonist that the drug company discovered in its Japanese laboratories. Three Sankyo products already are on the American market, but they are all licensed to major U.S. pharmaceutical firms (see Japan- U.S. Business Report No. 360, September 1999, pp. 2-3). Although Sankyo made clear on this occasion as it has in the past that it wants to build its own U.S. marketing capability, nothing was said about the future of SANKYO/PARKE-DAVIS CO., its Parsippany, New Jersey venture with WARNER-LAMBERT CO. The company's other operations here are a discovery research information center in San Diego, California and LUITPOLD PHARMACEUTICALS INC. of Shirley, New York, a manufacturer of multisource injectable drugs and animal health products acquired in 1990.

TEIJIN LTD. gave TAP PHARMACEUTICALS INC. the right to develop in the United States TMX-67, a xanthine oxidase inhibitor that is in Phase II clinical trials in Japan, as a possible treatment for gout and to market it in North America if testing is successful. Reportedly, no new oral therapy to treat gout has been introduced in this country for more than 30 years. The disease is characterized by sudden, recurring attacks of very painful arthritis caused by deposits of monosodium urate crystals. These accumulate in the joints because of an abnormally high level of uric acid in the blood. TAP Pharmaceuticals is a long- standing venture between TAKEDA CHEMICAL INDUSTRIES, LTD., Japan's biggest drug company, and ABBOTT LABORATORIES. It recently filed a new drug application for UPRIMA (apomorphine HCI tablets) sublingual for the treatment of male erectile dysfunction (see Japan-U.S. Business Report No. 359, August 1999, p. 3).

One of the gaps in MERCK & CO., INC.'s current product lineup is a treatment for prevalent adult-onset or Type II diabetes. That hole could be plugged if a product that KYORIN PHARMACEUTICAL CO., LTD. licensed to the leading prescription drug manufacturer pans out. KRP-297, which is undergoing Phase I clinical trials in Japan, is an insulin sensitizer that also corrects certain lipid abnormalities. Merck plans to begin clinical testing in the United States in the first quarter of 2000. Its development and marketing rights to KRP-297 cover all areas of the world outside of Japan, the People's Republic of China, South Korea and Taiwan. Kyorin Pharmaceutical received an up-front licensing fee. It also will get royalties on sales if Merck commercializes KRP-297.

Through a private placement, SANGAMO BIOSCIENCES, INC. raised $7.5 million from existing investor JAFCO CO., LTD. as well as from three other companies. The Point Richmond, California biotechnology firm's technology platform, based on engineered zinc- finger proteins, is used to accelerate the functional analysis of newly discovered genes and to validate genes. It also has application in the areas of human therapeutic, plant genomic and clinical diagnostic products. Over the last year, Sangamo has launched collaborations with 14 generally major pharmaceutical and biotechnology companies. One of those is JAPAN TOBACCO INC. (see Japan-U.S. Business Report No. 355, April 1999, p. 2).

The shift in production of aluminum substrates for hard disks to Southeast Asia has forced a reorganization of the North American operations of C. UYEMURA & CO., LTD. The Osaka manufacturer is one of the world's biggest suppliers of plating chemicals for this product. Its Ontario, California marketing subsidiary, formed in 1992 with MITSUBISHI CORP. as a minority (13.3 percent) partner, had outsourced production of the plating chemical to a Mexican firm for U.S. sale, but that arrangement has ended. Instead, UYEMURA INTERNATIONAL CORP. will import it while trying to build up sales of chemicals used in the manufacture of integrated circuit packages and printed circuit boards. To that end, it opened a technical center in Southington, Connecticut. Trial production of PCB-use chemicals already is underway. If successful, Uyemura says that it will consider commercial U.S. production of that and related chemicals.

An exchange rate of ¥106=$1.00 was used in this report. aaaaa

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