Japan-US Business Report LogoJapan-U.S. Business Report

No. 340, January 1998

Issue Index

 American Companies in Japan


The world's top producer of greeting cards and related personal expression products is managing its Japan business through a wholly owned Tokyo subsidiary. In December, HALLMARK CARDS, INC. bought the one-third share in AESOP CO., LTD. that it did not own already and made what had been the nation's second-largest publisher of greeting cards its vehicle for building the Hallmark brand presence locally. The Kansas City, Missouri multinational had purchased 67 percent of Aesop's stock in 1994. For more than 20 years before then, Hallmark had licensed its products in Japan. The new Hallmark subsidiary has 90 employees who develop, sell and distribute greeting cards and related products to 2,000 retail outlets nationwide.

The less expensive Parker line of pens is getting more marketing attention from GILLETTE CO.'s subsidiary in an effort to boost sales of writing instruments to $76.9 million in the year 2000. In 1996, about 70 percent of the company's $50 million in pen sales was generated by its more expensive brands. Key to the new strategy is tripling the number of supermarkets, convenience stores and other retailers that carry the Parker line to 20,000.

WARNER-LAMBERT CO.'s subsidiary has completed a nationwide marketing network for its Halls cough drops, Clorets breath gum and other consumer products by opening an office in Sapporo. For the last three decades or so, the company had concentrated its marketing and promotional efforts on the Tokyo metropolitan region.

Starting this fall, TRUE TEMPER SPORTS INC. will supply four different carbon shafts for golf clubs to local manufacturers on an OEM basis. The TTG-45 was developed specifically for the Japanese market. Through this arrangement, the company's subsidiary hopes to boost sales to $3.9 million in the year 2000 from an estimated $1.5 million last year. Most of that business was from steel-shaft clubs, but local golfers increasingly are buying carbon-shaft clubs. With the OEM deals, True Temper believes that it can gain 20 percent of the now mainstream market.

One of the biggest road builders and pavement maintenance contractors in Japan, OBAYASHI ROAD CORP., has licensed from POLYMAC CORP. a microsurfacing system for roads that acts as a preventive maintenance overlay. The OBAYASHI CORP. affiliate plans to introduce the Polymac-brand system this fall. The product's Vestal, New York developer will provide technical support and act as Obayashi Road's agent for acquiring the necessary equipment and materials. The Polymac microsurfacing system is expected to cost between $7.70 and $9.65 per square yard.

From this year, ALL NIPPON AIRWAYS CO., LTD. will use environmentally friendly paint strippers from GAGE PRODUCTS CO. to maintain its fleet of 136 planes. Japan's second-biggest airline repaints about 20 of its planes every year. The Ferndale, Michigan company's Stingray 874B and Stingray 853 paint strippers will expedite this process. Neither product contains phenol or methylene chloride. Moreover, the low odor and the neutral pH of the 874B allow it to be used on aircraft next to regular maintenance activities. Another plus of the Stingray products is that Gage will take back waste stripper and paint chips collected directly into drums.

New York City-headquartered OMNICOM GROUP INC., the world's leading marketing communications company, has an agreement in principle to acquire 20 percent of I&S CORP., the eighth largest advertising agency in Japan with revenues of $840.8 million in the year through March 1997. Omnicom Group sees the investment as a way to strengthen its presence in the huge Japanese advertising market. Under the company's umbrella are the BBDO Worldwide, DDB Needham Worldwide and TBWA International advertising agency networks.

RISK MANAGEMENT SOLUTIONS, INC., a specialist in the evaluation and the management of catastrophe risk, and OYO CORP., the biggest Japanese geological research firm, believe that a significant market exists among insurers, reinsurers, investment banks and other financial institutions in natural disaster-prone Japan for sophisticated risk modeling products and services. They plan to exploit these opportunities by forming a company in February that will leverage RMS's catastrophe modeling experience and Oyo's local expertise. The Menlo Park, California firm will own one-third of OYO-RMS CORP.

American Quality Assessors — a Columbia, South Carolina-headquartered organization accredited by the American National Standards Institute and the Registrars Accreditation Board to register corporate quality management systems as being in compliance with the requirements of the ISO 9000 standard — has opened a branch in Tokyo. AQA will offer its registration services to businesses in all industries, including the automotive field, for the QS 9000 motor vehicle standard. It also will advise companies on how to improve their quality as-surance programs. AQA is forecasting revenues of $384,600 in the first year. The group also plans to open branches in Osaka in 1999 and in Hiroshima in the year 2000.

An exchange rate of ¥130=$1.00 was used in this report.

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