No. 353, February 1999

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Japanese Companies in the United States

American Companies In Japan

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Japanese Companies in the U.S.


Two of the biggest players in the American market for industrial gases, both owned by Japan's top company in this field, NIPPON SANSO CORP., have been merged in a cost-cutting move. The merger combined TRI- GAS INC. of Irving, Texas with Parsippany, New Jersey-headquartered MATHESON GAS PRODUCTS, INC. The latter is a major producer of specialty electronic gases, especially for the semiconductor industry, as well as of gas-handling equipment and purification systems. Its key products, provided from facilities across the country, are ULTRA-LINE high-purity gases, the SDS Safe Delivery Source and Semi-Gas Systems brands of gas-handling equipment and Nanochem purification systems. Nippon Sanso acquired Matheson in 1983 and later bought other suppliers that were folded into Matheson. Tri-Gas, purchased in the spring of 1995, is a leading manufacturer of industrial gases, with 56 distribution centers in the southern United States. The new company will have annual revenues of approximately $400 million.

The five American companies wholly owned by MITSUBISHI RAYON CO., LTD. have been placed under the umbrella of a new holding company in order to reduce corporate taxes and to promote administrative efficiency. MRC HOLDINGS (AMERICA), INC. includes Mitsubishi Rayon's Manhattan-based sales subsidiary, MITSUBISHI RAYON AMERICA INC., plus four manufacturing operations. The largest is NEWPORT ADHESIVES AND COMPOSITES, INC., an Irvine, California maker of adhesives and composites with yearly sales of $34 million and 92 employees. Close behind is GRAFIL, INC. of Sacramento, California, a 96-person maker of carbon fibers. Its annual sales run around $33 million. Folded into the holding company as well were DIANAL AMERICA, INC. of Pasadena, Texas and MIRWEC FILM, INC. of Bloomington, Indiana. Dianal produces coating resins with a work force of 48 people. It has sales of $24 million a year. The 19 people employed by Grafil make $3 million worth of polypropylene film a year.

Under a 10-year agreement, SEKISUI PLASTICS CO., LTD., Japan's largest manufacturer of foamed plastics, licensed a patented process for making PET (polyethylene terephthalate) foam to EASTMAN CHEMICAL CO. The big Kingsport, Tennessee-headquartered plastics manufacturer initially is using the know-how in its Eastalite foam technology for food packaging. This product results in food containers that can withstand temperatures from minus 40 degrees Fahrenheit to 400 degrees Fahrenheit, allowing containers to go from the freezer to a microwave or a conventional oven and then to the table. To the extent that Eastalite foam technology incorporates Sekisui Plastics' patents and licenses, Eastman Chemical has the right to market the product worldwide outside of Japan, South Korea and Taiwan.

Nine months after it took over GREEN CROSS CORP., once the major supplier of blood products in Japan, YOSHITOMI PHARMACEUTICAL INDUSTRIES, LTD. indirectly boosted the capital of Green Cross' production unit. Los Angeles-headquartered ALPHA THERAPEUTIC CORP. will use the $25 million to increase its capacity to make plasma products, especially IGIV (immune globulin intravenous), and, at the same time, to ensure that its output meets increasingly strict Good Manufacturing Practice requirements. Alpha began a five-year project in 1998 to expand and enhance its manufacturing facilities. The first of the added capacity is expected to come onstream in 2000. By 2004, Alpha will have nearly twice the capacity as now to make IGIV.

A semi-automated nucleic acid probe test developed by GEN- PROBE INC. for early detection of the hepatitis C virus and the human immunodeficiency virus in pooled samples of plasma from blood donations (see Japan-U.S. Business Report No. 347, August 1998, p. 2) will be investigated by the American Red Cross. The testing will be conducted at the Red Cross' new, state-of-the-art National Genome Testing Laboratory in San Diego, California. Gen-Probe, a wholly owned CHUGAI PHARMACEUTICAL CO., LTD. company that also is located in San Diego, and its development partner, Emeryville, California-based CHIRON CORP., will provide NAT (nucleic acid testing) kits and instruments to the Red Cross. Tests like Gen-Probe's that use viral nucleic acid could provide faster and more sensitive identification of blood contaminated by HCV and HIV than current tests, which detect antibodies or viral proteins, thereby adding another layer of safety screening to the U.S. blood supply.

Venture capitalist JAFCO CO., LTD. joined the original investor in PENTOSE PHARMACEUTICALS, INC. in providing $7 million in financing for the Cambridge, Massachusetts firm. Pentose will use part of the money to support the development of its INACTINE compounds, which are designed to inactivate pathogens in blood-derived therapeutic products. Clinical trials of these compounds will start in the first half of 1999. Other funds will be applied to the continued clinical development of PEN203, the firm's lead PAPIRINE topical compound for the treatment of cutaneous and genital lesions caused by the human papillomavirus.

SANKYO CO., LTD., the number-two Japanese pharmaceutical company, opened a research and development facility in San Diego, California as part of its drive to internationalize its drug discovery and development effort. Part of SANKYO PHARMA, INC., the company's Parsippany, New Jersey subsidiary, the mandate of the laboratory is to develop products that Sankyo can market around the world. Researchers will focus primarily on treatments for diabetes, Alzheimer's disease and immune-related disorders.

By 2002, FUJISAWA PHARMACEUTICAL CO., LTD. hopes, offshore sales will generate 50 percent of its revenues versus 32 percent in FY 1997. To support achievement of this objective, the drugmaker has penciled in an expansion over the coming year of the number of medical representatives or sales personnel on staff at FUJISAWA HEALTHCARE, INC. in Deerfield, Illinois to 150 from 100. The increase also is tied to the marketing in 2000 of what the company envisions will be its next big-selling drug in the United States — Protopic, a treatment for dermatitis. Much of Fujisawa Healthcare's business now is generated by the immunosuppressant Prograf.

In their second gene discovery alliance, GENE LOGIC INC. will use its READS gene expression and bioinformatics technologies to identify new drug targets for JAPAN TOBACCO INC. in an undisclosed therapeutic area. Over the project's nearly four-year estimated lifetime, JT will pay the Gaithersburg, Maryland company at least $12 million, plus make milestone and royalty payments associated with the development and marketing of any drugs resulting from the use of its technologies. Since September 1997, Gene Logic has been using its READS technology to build a data base for JT of genes "differentially expressed" between normal kidney tissue and tissue from patients with glomerulonephritis, a type of kidney disease. A number of genes that represent potential drug targets for glomerulonephritis have been identified. Gene Logic and Japan Tobacco now are selecting and developing assays for these genes preparatory for them entering JT's new drug screening program.

A third Japanese company has signed on with COMBICHEM, INC. to accelerate its drug discovery program. ONO PHARMACEUTICAL CO., LTD. has given the San Diego, California computational drug discovery company the job of generating lead drug candidates for a target reported to be autoimmune diseases using its Discovery Engine process. The target was selected from a group of possibilities screened by CombiChem's Universal Informer Library. The terms of the two-year agreement call for Ono to provide an initiation fee, research support and milestone payments to CombiChem. The midsized Japanese pharmaceutical company has exclusive global rights to develop and market products resulting from the collaboration. CombiChem also has worked with SUMITOMO PHARMACEUTICALS CO., LTD. and TEIJIN LTD.

In the second such deal in less than a year, SS PHARMACEUTICAL CO., LTD. has awarded ARENA PHARMACEUTICALS, INC. the right to develop, make and market one of its ethical compounds in the United States and Europe. The product is AHL157, a cholesterol treatment. The San Diego, California biotechnology company expects to begin Phase I clinical trials in this country in late spring or early summer. The first tie-up between SS Pharmaceutical, best known as a supplier of over-the-counter drugs, and Arena Pharmaceuticals involves T-82, an aceticholinesterase inhibitor for the treatment of Alzheimer's disease (see Japan-U.S. Business Report No. 342, March 1998, p. 2).

Backstopped by an American contract research organization, ASAHI CHEMICAL INDUSTRY CO., LTD. has launched its first drug development program in the United States. In January, the pharmaceutical division of New York City-based ASAHI CHEMICAL INDUSTRY AMERICA, INC. opened a facility in Princeton, New Jersey staffed by three clinical researchers to work on drugs for cardiovascular problems. That is one of the four pharmaceutical areas in which Asahi Chemical is specializing. The others are bone, immunological and central nervous system diseases.

The only orally available approved drug in the world that addresses the cause of pulmonary vascular disease has been licensed by developer TORAY INDUSTRIES, INC. to UNITED THERAPEUTICS CORP. for North America. Beraprost is part of a class of drugs called prostacyclin. This molecule is key to the maintenance of healthy blood vessels. People with pulmonary vascular disease — a heart-lung disorder caused by collapsed blood vessels within the lungs and consequent high blood pressure between the heart and the lungs — do not produce enough prostacyclin. The only currently available therapy is a 24-hour-a-day intravenous drip. Silver Spring, Maryland-headquartered United Therapeutics expects to complete within this year Phase II clinical trials of Beraprost, which usually is taken three to four times daily. Phase III testing could be finished by 2001. As part of their collaboration, Toray Industries spent $3 million to acquire 5 percent of United Therapeutics' stock.

The Food and Drug Administration cleared for sale PLETAL (cilostazol), a drug commercialized by OTSUKA PHARMACEUTICAL CO., LTD.'s Rockville, Maryland subsidiary for relief from the leg pain caused by hardening of the arteries. PLETAL is the first new compound approved in more than 15 years for what is known as intermittent claudication, which can be so severe that patients have trouble walking. OTSUKA AMERICA PHARMACEUTICAL, INC. will have PLETAL available early this year.

CIBA VISION CORP. has taken over U.S. marketing of OTSUKA PHARMACEUTICAL CO., LTD.'s Ocupress (carteolol hydrochloride) Ophthalmic Solution, 1%, from the Japanese company's Rockville, Maryland subsidiary. Ocupress is a nonselective beta-adrenoceptor blocking agent used in the treatment of glaucoma. Duluth, Georgia-headquartered CIBA Vision, the eye- care unit of Switzerland's NOVARTIS AG, already has European distribution rights to Ocupress.

Under a 10-year exclusive agreement, SEIKAGAKU CORP. gave SMITH & NEPHEW, INC. the right to market an ultrapure hyaluronic acid product that is injected into a patient's knee joint to help alleviate the pain associated with osteoarthritis. The agreement for what will be named SUPARTZ covers the United States, Canada, Australia, South Africa, the United Kingdom and parts of Europe. FDA approval of SUPARTZ is pending. The Orthopedic Division of London's Smith & Nephew is located in Memphis, Tennessee. It designs and manufactures replacement knee, hip and shoulder implants. Tokyo-headquartered Seikagaku is forecasting sales under the marketing pact at $8.8 million in 2000.

By giving FISHER SCIENTIFIC L.L.P. exclusive rights to market in the United States its reagents used in genetic research, TAKARA SHUZO CO., LTD. hopes to quickly boost U.S. reagent sales to $4.4 million a year from $1.3 million in FY 1997. The agreement with Pittsburgh-based Fisher Scientific will give the Kyoto company access to a much broader group of customers, including universities, research institutes and businesses. Takara Shuzo has an extensive line of molecular biology and polymerase chain reaction products.

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

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To better position HITACHI DATA SYSTEMS CORP. as a solutions provider in the extremely competitive North American market, majority owner HITACHI, LTD. will buy out ELECTRONIC DATA SYSTEMS CORP.'s 16.2 percent stake in the Santa Clara, California company for an undisclosed amount. The two formed Hitachi Data Systems in 1989 and then took over NATIONAL ADVANCED SYSTEMS, INC., the company that had been marketing, selling and servicing Hitachi's mainframes and related storage products in the United States and elsewhere. Today, Hitachi Data Systems employs 2,300 people and operates in 30 countries. Its line of high-performance S/390-compatible enterprise servers includes the HDS Skyline Series and the HDS Pilot Series. It also handles Hitachi Freedom Storage subsystems, which provide multiplatform support across S/390, Unix and Windows NT environments. Right before a restructuring Hitachi announced the agreement to acquire EDS's share, Hitachi Data Systems disclosed plans to form an open systems unit to further its systems integration business in North America.

Japanese computer makers continue to keep pace with their American rivals in introducing products that capitalize on the performance enhancements of INTEL CORP.'s latest microprocessor technology. The release of the 450-megahertz Pentium II Xeon processor, for instance, was quickly followed by the announcement of new enterprise-class servers from HITACHI PC CORP., the NEC Computer Systems Division of PACKARD BELL NEC, INC. and the Computer Systems Division of TOSHIBA AMERICA INFORMATION SYSTEMS, INC. The Hitachi VisionBase 8460, the NEC Express5800 HX4500 line and Toshiba's Magnia 7000 series all can support up to four 450-MHz Xeon processors. These engines offer a larger and faster on-chip Level 2 cache, with the option of 512 kilobytes, 1 megabyte or 2 megabytes. A 100-MHz front-side bus and Intel's 450NX PCI (peripheral component interconnect) chipset also are common features. The Express5800 HX4500 starts at $11,600 for a single processor with 512 KB of L2 cache, 128 MB of ECC (error checking and correcting) DRAM (dynamic random access memory) and a 4-GB hard drive. The Magnia 7000, which comes standard with 256 MB of internal memory, is priced from $7,900. Hitachi PC did not release pricing for either the VisionBase 8460 or for the VisionBase 8880, which now can be powered by up to eight 450-MHz Xeon processors. Each of the companies' products can be configured to order.

The release of the 450-MHz Pentium II Xeon processor also marked the debut of the fourth member of HITACHI PC CORP.'s VisionBase server family. The midrange VisionBase 8450, like the 8460, is a four-way server that is available in either a tower or a rack-mounted configuration. It can support as much as 4 GB of main memory and features seven 32-bit PCI slots and six externally accessible hot-swap drive bays. Milpitas, California- based Hitachi PC has positioned the VisionBase 8450 for multiserver clustering environments. The base configuration has an estimated street price of $14,000.

The Computer Systems Division of TOSHIBA AMERICA INFORMATION SYSTEMS, INC., the U.S. market leader in portable personal computers, also unveiled machines that sport new, faster processors from INTEL CORP. for notebook PCs. The sleek, thin (1-inch thick) and lightweight (4.2 pounds) Portégé 7020CT for mobile professionals features the 366-MHz mobile Pentium II processor. The estimated street price of $3,700 also buys a 13.3-inch TFT (thin-film-transistor) LCD (liquid crystal display), a full-size keyboard, 64 MB of high-speed synchronous DRAM, a 6.4-GB Ultra DMA hard drive and other bells and whistles. The same processor also powers the latest models in the Tecra 8000 Series, a line known for all the configuration possibilities that are available. One option, expected to go for around $3,900, includes the 366-MHz mobile Pentium II chip, a 13.3-inch TFT LCD display, 64 MB of SDRAM memory, an 8.1-GB hard drive and a 24X CD-ROM drive. For budget-conscious buyers that want the performance of the 366-MHz mobile Pentium II processor, TAIS CSD introduced the Satellite 4080XCDT. Its price of $3,200 includes a 6.4-GB hard drive and a 14.1-inch display, the largest screen available to date in the Satellite line. The Irvine, California company also released its first notebook with the new 300-MHz mobile Celeron processor. Priced around $2,000, the Satellite 4030CDT offers 4.3 GB of storage and a 13.3-inch TFT LCD display.

Also vying for the business of the mobile professional, the NEC Computer Systems Division of PACKARD BELL NEC, INC. introduced the third generation of its Versa SX notebook PCs. Measuring 1.3 inches high and weighing 4.8 pounds, the new machine features the performance-enhancing 366-MHz mobile Pentium II processor as well as a 14.1-inch TFT LCD display, 64 MB of RAM and a 4-GB hard drive. Like other Versa notebooks, the new SXs also include the VersaBay III, which accepts seven different, hot- swappable storage and power tools. The standard configuration of the built-to-order Versa SX goes for around $3,600. For customers who find that price too stiff, Mountain View, California-based NEC CSD announced the second generation of its Versa Note notebook. It sports INTEL CORP.'s just- released 300PE-MHz mobile Pentium II processor as well as an all-in-one design that makes the CD-ROM drive, floppy drive and modem simultaneously available. These capabilities plus a 13.3-inch TFT LCD screen, 32 MB of internal memory and a 4-GB hard drive are priced at $2,200 or so.

HITACHI PC CORP.'s latest solution for the functionality, flexibility and pricing requirements of the corporate marketplace is the Hitachi VisionBook 800 Series. These notebooks offer the option of a 366- MHz mobile Pentium II processor, a 300PE-MHz mobile Pentium II chip or these processors at a slower clock speed as well as the choice of the size of the internal memory, hard drive and screen. Three standard configurations are available, all of which contain a built-in modem, 10/100Base-TX local area network card and a lithium-ion battery. A VisionBook 800 with a 366-MHz mobile Pentium II chip, a 14.1-inch TFT LCD display, 128 MB of RAM and a 10-GB hard drive is priced at $3,000. A combination of the 300PE-MHz processor, a 13.3-inch TFT LCD screen, 64 MB of internal memory and a 6.4-GB hard drive costs $2,900. The third configuration features the 266PE-MHz processor; it lists for $2,500.

Not to be outdone, SONY ELECTRONICS, INC. extended its VAIO line of notebook computers with the introduction of the PCG-F Series. The four all-in-one models in the line are among the first portable systems to offer full multimedia capabilities, yet they cost only between $1,700 and $3,300. The high-end VAIO PCG-F190, for instance, allows full digital video editing, a first for the industry. This capability comes in a package with a 366-MHz mobile Pentium II processor, a 14.1-inch TFT LCD display, 64 MB of SDRAM and a 6.4-GB hard drive. For the SOHO (small office/home office) user, there is the VAIO PCG-F150 with a 300-MHz mobile Pentium II chip. It allows digital video still editing using, like the other models, SONY CORP.'s iLINK (IEEE-1394) port. All four VAIO PCG-F Series systems measure less than 1.7 inches thick and weigh under 7 pounds.

For the mobile professional looking for ultraportability, SONY ELECTRONICS, INC. simultaneously released two additions to its sleek VAIO 505 SuperSlim notebook line. The VAIO PCG-505TX and the VAIO PCG-505TS weigh a mere 2.7 pounds and are less than 0.9 inch high. Powered alike by a 300-MHz Pentium processor with MMX technology, the two models include 64 MB of SDRAM, a 4.3-GB (505TS) or a 6.4-GB (505TX) hard drive, an iLINK port for digital video still editing and a 10.4-inch TFT LCD display. The high- end model, though, incorporates SONY CORP.'s XBRITE display technology, which delivers a resolution of 1024 x 768 pixels versus the standard SVGA (super video graphics array) resolution of 640 x 480 found in other notebook computers. The VAIO PCG-505TX has an estimated selling price of $2,500, while the VAIO PCG-505TS is expected to go for about $2,000.

These machines will be going up against HITACHI PC CORP.'s VisionBook Traveler 600 mininotebooks, which are 1-inch thick and weigh just 2.9 pounds. Claimed to be the industry's only ultraportable to offer a choice of a built-in modem or LAN, the line features a 266-MHz Pentium processor with MMX technology, a minimum of 32 MB of SDRAM expandable to 160 MB, a 3.2-GB or a 4.3-GB hard drive and a 10.4-inch TFT SVGA screen. The estimated retail prices of the four standard configurations of the VisionBook Traveler 600 run from $2,000 to $2,400.

Thinner, lighter form factors also are coming to the world of handheld PCs. The NEC Computer Systems Division of PACKARD BELL NEC, INC., for one, announced the MobilePro 770, which weighs 1.7 pounds and measures 9.6 x 5.2 x 1.1 inches. Powered by NEC ELECTRONICS, INC.'s VR4121 64-bit processor, the $800 device has an 8.1-inch, half-VGA display (a resolution of 640 x 240), three data-entry options and instant connectivity means. It comes bundled with Windows CE software from leading vendors and will support Windows CE Handheld PC Professional Edition when MICROSOFT CORP. releases that operating system. NEC CSD's line of MobilePro H/PCs now includes three models.

Handheld PCs are marketed as companions to desktop or notebook systems. FUJITSU PERSONAL SYSTEMS, INC. is pushing a replacement, at least for portable PCs. The Santa Clara, California company's Stylistic 2300 is a pen tablet. Running either Windows 98 or Windows NT off a 233-MHz Pentium processor with MMX technology, the machine has a ruggedized 4.1-GB hard drive, a built-in 56-kilobit-per-second modem, two Type 2 PC Cards and an 8.4-inch color Super VGA display that is optimized for both indoor and outdoor viewing.

As an option with its new line of Power Macintosh G3 desktop machines, APPLE COMPUTER, INC. is offering a rewritable digital video disk drive supplied on an original equipment manufacturer basis by MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. The LF-D101 DVD-RAM drive also can read disks written in other formats, including DVD-ROM (ready-only memory), CD- ROM and CD-R (recordable).

Subsidiaries of HITACHI, LTD. and TOSHIBA CORP. are shipping slim disk drives with a storage capacity of 10 GB to manufacturers of high- performance notebooks. Both companies overcame the capacity constraint imposed by ariel density, or the amount of data per square inch on a hard drive platter, by employing the giant magnetoresistive head technology pioneered by INTERNATIONAL BUSINESS MACHINES CORP. Hitachi's 2.5-inch, three-platter DK229A-10 drive, for example, represents more than a 60 percent increase in data density compared with drives it introduced just last year. GMR heads also were used in Hitachi's simultaneously released 2.5-inch, two-platter DK-239A-65 drive, which has a capacity of 6.49 GB. Toshiba's corresponding drives, each of which provides 3.3 GB of storage per platter, are the 10-GB MK1011GAV and the 6.4-GB MK6411MAT.

Multifunction desktop devices are starting to crowd the shelves of computer stores. Among the new products is the CFX-L3500F from CANON INC.'s subsidiary. The $1,100 system makes laser prints at 6 pages per minute and allows 14.4-kbps plain paper faxing, PC faxing and scanning.

The M Series of departmental-level scanners from FUJITSU COMPUTER PRODUCTS OF AMERICA, INC. of San Jose, California has a new model that supports Irvine, California-based KOFAX IMAGE PRODUCTS' ScanRight Virtual ReScan software. This technology automatically adjusts the quality of the scanned image, thereby reducing time and labor costs. It also trims scanned file sizes up to 15 percent for more on-line storage. Fujitsu's M3097D with ScanRight VRS is designed for high-volume (up to 1,000 pages a day) users, such as scanning houses specializing in forms processing. It has a list price of $11,000.

SEIKO EPSON CORP.'s Torrance, California marketing unit has added two scanners to its lineup. The Expression 800 flatbed single-pass color scanner delivers a resolution of 800 x 3200 dots per inch thanks to the company's Micro Step Drive technology. It is available in three cross- platform software configurations: Executive ($700), Artist ($800) and Professional ($1,000). For home and SOHO consumers looking for a flatbed scanner that works with USB (universal serial bus) devices like the iMac, Epson has the Perfection 636U. It provides a resolution of 600 x 2400 dpi using the company's Micro Step Drive technology. Like other Epson scanners, it also features the built-in ColorTrue Imaging System. The estimated street price of the Perfection 636U, which will be available in March, is $230.

The Brisbane, California Computer Division of HITACHI, LTD.'s main U.S. subsidiary has released a second-generation multimedia appliance for use with the Macintosh platform. The M2 is billed as the world's first multimedia recording device capable of digitally capturing and storing up to 27 minutes of full-motion video (MPEG-1 format), 3,000 photographs (JPEG format), four hours of MPEG audio and combinations of all three formats. Priced at $1,500, it comes bundled with a full suite of Macintosh software to download images, cut and arrange video clips and replay MPEG movie files.

SMARTDISK CORP. — the Naples, Florida company TOSHIBA CORP. and FISCHER INTERNATIONAL SYSTEMS CORP. formed in March 1998 to make and market the Smarty smart card reader/writer (see Japan-U.S. Business Report No. 343, April 1998, p. 3) — has another Japanese partner, NEC CORP. The big industrial electronics maker will invest in SmartDisk as well as make and market Smarty worldwide. This adapter, which has the same dimensions as a 3.5-inch floppy disk, allows any PC with a floppy drive to read and write data to a smart card.

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

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The unwinding of corporate Japan's portfolio of high-profile American real estate continues. The latest property to be sold is the Essex House hotel, located on Central Park South in Manhattan. JAPAN AIRLINES CO., LTD. sold the 597-room Art Deco hotel to STRATEGIC HOTEL CAPITAL INC. The price was not disclosed but was thought to be around $250 million. Something on that order would exceed what JAL paid for the property in 1985; however, it would not cover what the airline invested in the hotel or its operating losses.

Custom home builder SHELTER CO., LTD. of Yamagata prefecture has moved into the American market. It opened a marketing subsidiary in Seattle and started work on a two-story house in Salt Lake City, Utah that showcases the company's building technology. Shelter hopes to win contracts to build 10 homes in the United States in 1999.

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

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Trader MITSUBISHI CORP. and SGI INTERNATIONAL, a developer of energy technologies, have formed a company to advance the La Jolla, California partner's liquids from coal technology. This patented process turns low-grade coal into higher Btu, "super compliance" fuel and coal liquids that can be refined into chemicals. LFC TECHNOLOGIES LLC plans to tap Mitsubishi's engineering and other technical expertise to reduce the cost of LFC equipment. It also will have access to SGI personnel in the areas of engineering, technology and marketing. The Japanese company will market the LFC technology and LFC products outside the United States. SGI retained American marketing rights.

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

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At a time when other Japanese banks are pulling out of the U.S. marketplace, INDUSTRIAL BANK OF JAPAN, LTD. strengthened its commitment by buying the shares it did not own in IBJ SCHRODER BANK & TRUST CO. IBJ acquired a 49 percent stake in the New York City bank from London's SCHRODER P.L.C. in 1985 and increased its ownership to 97.3 percent in 1987. Following IBJ's purchase of the remaining shares, IBJ Schroder, which has $2.5 billion in assets, changed its name to IBJ WHITEHALL BANK & TRUST CO. It will continue to focus on providing financing and investment advice to the middle market as well as on serving institutions and high-income individuals. Through headquarters and regional offices in Atlanta, Boston, Cleveland and Miami, IBJ Whitehall employs about 550 people.

With the goal of boosting its futures and derivatives businesses in the United States, FUJI SECURITIES, INC., a subsidiary of FUJI BANK, LTD., spun off its Chicago-based futures division into a separate company. Over the 1990s, that operation has expanded to account for nearly 40 percent of the New York City-headquartered parent's revenues. It is the top trader in Eurodollar interest-rate futures on the Chicago Mercantile Exchange.

As part of its wide-ranging strategic alliance with CITIGROUP INC. (see Japan-U.S. Business Report No. 346, July 1998, p. 15), NIKKO SECURITIES CO., LTD. sold its American and European futures operations to that company's SALOMON SMITH BARNEY INC. investment banking/brokerage unit. In the United States, the transaction meant the closure of the broker's Chicago office. Nikko Securities started that operation in 1985. Three years later, it became the first Japanese company to serve as a clearing member of the Chicago Board of Trade and the Chicago Mercantile Exchange.

Come July, DAI-ICHI KANGYO BANK, LTD. will liquidate DKB SECURITIES (U.S.A.) CORP. Established in 1989, the Manhattan brokerage is one of less than three dozen companies authorized to function as primary dealers in U.S. government securities. .....As another part of its international restructuring, DAI-ICHI KANGYO BANK, LTD. is closing its San Francisco branch after shuttering its offices in Atlanta and Houston in December. Once the consolidation of its U.S. operations is completed, the big commercial bank will have branches in New York City, Chicago and Los Angeles.

JAPAN ASIA INVESTMENT CO., LTD., the largest independent Japanese venture capital company, has formed a wholly owned subsidiary in Menlo Park, California. As its name suggests, the firm, which also has the distinction of being just one of two Japanese venture capital companies whose stock is traded on the over-the-counter market, now focuses on investments in start-ups in Japan and Southeast Asia. However, with the establishment of JAIC AMERICA, INC., the firm has set its sights on investment opportunities in the United States.

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

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Through a series of acquisitions dating back to 1985, SUNTORY WATER GROUP, INC., a wholly owned subsidiary of SUNTORY LTD., has emerged as the second-largest supplier of bottled water for both home and office delivery and retail sale in the United States. The Marietta, Georgia company strengthened its hold on that position, which translates into a 9.2 percent market share, through the purchase of CLOISTER SPRING WATER CO. for an undisclosed price. That Lancaster, Pennsylvania-based company distributes bottled water in Pennsylvania, New Jersey, Delaware, Maryland, Virginia and Washington, D.C. Suntory Water Group's other brands include Belmont Springs, Crystal Springs and Polar. Industry analysts put the company's 1997 sales at $362 million. The top bottled water company in the United States is NESTLE S.A.'s Perrier Group, with a 28.1 percent market share.

Shochu manufacturer TAKAHASHI SHUZO HONTEN LTD. is trying to break into the American market. The Kumamoto prefecture company has signed up MUTUAL TRADING CO., INC. of Los Angeles to distribute its Hakutake Shiro Shochu to Japanese supermarkets and restaurants. It has a modest first-year sales goal of $74,300. A 750-milliliter bottle of Takahashi Shuzo's shochu costs between $17.70 and $26.55. Shochu is a clear, distilled liquor.

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

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Machine tool builder SHIN NIPPON KOKI CO., LTD., in partnership with DAIWA CAN CO., acquired ORLANDO MACHINE ENGINEERING CENTER from steel container manufacturer U.S. CAN CORP. of Oak Brook, Illinois for an undisclosed price. The renamed Orlando, Florida-based SHIN ORLANDO MACHINE ENGINEERING CENTER supports the global can-making equipment business. It manufactures this equipment as well as provides engineering services, tool and die design and production work, overhaul services and spare parts. SOMEC also produces a line of air-pocket testers formerly known as the Borden Air Pocket Tester and multidie presses, irregular shape flangers and semi-automatic, single-head seamers sold under the Callahan name. The acquisition includes as well U.S. Can's Proprietary Products Group, which builds electrostatic sheet and coil lubricating equipment and supplies chemicals to the glass and bottle industry.

In a major win, ISHIKAWAJIMA-HARIMA HEAVY INDUSTRIES CO., LTD. will supply six big transfer presses to GENERAL MOTORS CORP. The $265.5 million contract covers four 6,500-ton crossbar transfer presses and two 4,500-ton three-dimensional AC servo transfer presses. Shipments are scheduled to begin in mid-2000. To handle the GM order as well as to better position the company to gain contracts from other customers, IHI made its press business an independent division. It also assigned engineers and other IHI people to work directly with GM counterparts and is in the process of expanding staffing at its Troy, Michigan office.

The American market remains a strong draw for Japanese machine tool suppliers. The newest player is HAKUSUI CHEMICAL INDUSTRIES, LTD. The Osaka company recently moved into this business from its primary business of making inorganic pigments. It formed a wholly owned subsidiary in Schaumburg, Illinois to market three CNC (computer numerically controlled) lathe models. What sets its products apart from the competition's is EcoLeg, an environmentally friendly metal processing system. Equipped with this system, Hakusui's lathes cost around $88,500.

In a move designed to bolster their competitive positions around the world in the market for superhard tool tips and other tooling for the metalworking industry, TOSHIBA TUNGALOY CO., LTD. and KENNAMETAL INC. signed a wide-ranging business cooperation agreement. Although both companies will continue to market their own products through their traditional distribution channels, Latrobe, Pennsylvania-based Kennametal will sell complementary Toshiba Tungaloy products through its North American and European sales networks. The Japanese company also will supply its much larger U.S. partner with carbide cutting tools and related components. Other areas of cooperation include product development, R&D and cross- licensing. The two have collaborated on a number of R&D projects since the early 1990s. As part of the tie-up, Kennametal will buy roughly 4.9 percent of Toshiba Tungaloy's outstanding shares for some $14.9 million from TOSHIBA CORP. The transaction will leave Toshiba as the single largest shareholder in Toshiba Tungaloy with a 37 percent stake. Kennametal, a longtime marketer in Japan, recently opened a technical center in Nagoya (see Japan-U.S. Business Report No. 351, December 1998, p. 17).

Although known as one of the world's largest manufacturers of sewing machines, JUKI CORP. also makes other types of equipment. One is SMT (surface-mount technology) assembly equipment. Since 1987, it has supplied this line on an OEM basis to ZEVATECH, INC., a Morrisville, North Carolina maker of printed circuit board manufacturing equipment. Beginning in April, Juki will use Zevatech's American and European marketing channels to sell on an OEM basis two PWB (printed wiring board) machines. The KE-775 high-speed dispenser features three glue-dispensing heads and automatic controls for constant quality. The KS-1700 is a fully automatic PWB screen printer with machine vision.

This spring, KAWASAKI HEAVY INDUSTRIES, LTD. will add a diesel- engine version to the line of three internal-combustion-engine Mule off-road utility vehicles made at the Lincoln, Nebraska plant of KAWASAKI MOTORS MANUFACTURING CORP., U.S.A. KHI codeveloped the 950-cubic-centimeter, 4- stroke, liquid-cooled diesel engine with DAIHATSU MOTOR CO., LTD., which will supply it to KMMC on an OEM basis. The existing Mule models, all of which have two seats, consist of a pair of heavy-duty utility vehicles, including a four-wheel-drive version, capable of hauling more than 800 pounds in their tilting cargo beds and a compact model that can carry over 350 pounds in its tilting cargo bed. KHI expects to sell 2,000 diesel-engine Mules in 1999. This model also will be available in Japan and Europe this summer.

Japan's top maker of precision pumps for the chemicals industry, NIKKISO CO., LTD., has opened an $8.9 million, state-of-the-art cryogenic test facility in North Las Vegas, Nevada. NIKKISO LNG TESTING, INC. provides performance testing of submerged cryogenic pumps and other cryogenic components and systems. It can handle all sizes of pumps at full capacity. On-site piping, power supply and controls permit testing over the full operating curve. Test fluids include liquefied natural gas and liquefied petroleum gas as well as such others as nitrogen dioxide, ethane and ammonia. Until the Nevada site became operational, Nikkiso used the testing facility of longtime partner and cryogenic submerged pump developer J.C. CARTER CO., INC. of Costa Mesa, California.

Osaka's DAISHIN KOGYO RESEARCH CO., LTD. has tapped ENGELHARD CORP. to distribute its Flowtron automatic gas flow control system. The Iselin, New Jersey company will market Flowtron by itself as well as with welding machines. The Japanese manufacturer is looking for annual sales of $442,500.

In the latest deal in a collaboration going back to the mid-1950s, TOSHIBA CORP. will build 20 steam turbines and generators for GENERAL ELECTRIC CO. The world's largest supplier of power-generating machinery will use this equipment in systems it sells to the independent companies moving into the U.S. electricity market with the coming of deregulation to this business. The contract could be worth as much as $88.5 million to Toshiba, which will start work on the order in the second half of 1999 at its Yokohama plant. Last year, the Japanese company signed on as a risk- and revenue- sharing partner on GE's next generation of power plants, the combined-cycle H System (see Japan-U.S. Business Report No. 346, July 1998, p. 6).

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

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The CVC-1000 progressive scan video camera that COGNEX CORP., the world leader in machine vision systems used to inspect the surfaces of products manufactured in a continuous fashion, recently introduced was developed to the Natick, Massachusetts company's requirements by SONY CORP. The top manufacturer of industrial cameras is making the system exclusively for Cognex, which says that it is the first camera for industrial machine vision applications that combines high-speed image acquisition, enhanced image quality, compact size and flexible control options. The CVC-1000 can capture images at 60 frames a second, or about twice the speed of most cameras, thanks to its progressive scan video technology. That capability, Cognex believes, will be particularly appealing in applications like can and bottle cap inspection where objects are moving quickly by the camera and the results must be reported instantly.

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

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The Food and Drug Administration has approved NIDEK CO., LTD.'s EC-5000 excimer laser for use in photorefractive keratectomy, a surgical procedure designed to correct mild to moderate myopia or nearsightedness by altering the shape of the cornea. The Aichi prefecture company developed the system in 1992 and since then has sold about 400 units in 50 countries. It applied for FDA marketing approval in 1994. NIDEK, INC. of Fremont, California has priced the EC-5000 around $560,000. It is projecting sales of 50 or so units in the year starting April 1.

Four unnamed Japanese organizations, including two companies described as among the largest display makers, are part of a development team put together by SI DIAMOND TECHNOLOGY, INC. to develop the Austin, Texas firm's hybrid HyFED display. This technology combines properties of the cathode-ray tubes found in television sets and field emission displays using the proprietary diamond/carbon films of a SIDT subsidiary. The HyFED display has the potential to be larger and brighter than CRTs with better resolution while also being cost-competitive. Each of the team members is funding its own part of the work on the 4-inch (diagonal) HyFED display prototype.

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

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In a huge boost for its business prospects, the Salem, Oregon subsidiary of MITSUBISHI MATERIALS CORP. will be the primary supplier of silicon wafers to MOTOROLA INC. For 40-odd years, the big semiconductor maker has made many of its own wafers, but as part of a restructuring, it decided to outsource this operation. The transfer could take place at midyear, when Motorola plans to shut down its wafer production facilities, but no later than the end of 1999. Under what is said to be a three-year contract, MITSUBISHI SILICON AMERICA CORP. will supply 3.1 million wafers a year to Motorola, split between 1.4 million polished wafers and 1.7 million epitaxial wafers. This volume is estimated to translate into annual sales on the order of $53.1 million. MSA's sales and marketing offices are located in Palo Alto, California.

With an equipment investment of $177 million, TOSHIBA CORP. reportedly will start production of 128-megabit DRAM chips by the end of 1999 at DOMINION SEMICONDUCTOR LLC as well as at its big Yokkaichi, Mie prefecture complex. Both wafer fabrication facilities will employ 0.18-micron processing technology. The part, claimed to have the smallest cell size of any DRAM, was codeveloped by Toshiba and longtime DRAM R&D partners INTERNATIONAL BUSINESS MACHINES CORP. and SIEMENS AG. IBM is an equal owner with the Japanese company in Manassas, Virginia-located Dominion, which launched volume production of 64-megabit DRAMs in the fourth quarter of 1997. Toshiba hopes that by switching output to the next- generation product, it can avoid the pricing pressures that have played havoc with profitability in the 64-megabit DRAM market.

NEC CORP. and TEXAS INSTRUMENTS INC. have codeveloped a very high bit-rate digital subscriber line module for applications that can benefit from far faster data transmission speeds than are available with conventional telephone lines. These include extremely high-speed Internet access, multimedia data transmission and simultaneous multiple-channel video-on-demand. Both companies have an early second-quarter volume production launch date for the module, which is a printed circuit board containing a four-part VDSL chipset. The VDSL module will be deployed in the metallic part of fiber-to-the-home/building/curb/cabinet access systems to support FSAN (full-service access network) applications. As part of their joint development agreement, NEC and TI will work to ensure that their future VDSL solutions are interoperable and robust.

In the hope of expanding its automotive-related semiconductor business, SANKEN ELECTRIC CO., LTD. has teamed with ANALOG DEVICES, INC. and INTERNATIONAL RECTIFIER CORP. to develop and market electronic control system solutions tailored to specific makes and models of vehicles. The transpacific work will focus on control components for air bags, antilock brakes and other vehicle safety systems, power systems, including engines and transmissions, and VICS (vehicle information and communication system) and ITS (intelligent transportation system) systems.

Six months into a 32-month development agreement, KANSAI ELECTRIC POWER CO., INC. and Durham, North Carolina-based CREE RESEARCH, INC. have succeeded in designing a silicon carbide power diode with a blocking voltage of 6.2 kilovolts for use in power transmission systems (see Japan-U.S. Business Report No. 347, August 1998, p. 6). Cree is the world leader in SiC-based semiconductor products. Designed for high-voltage, high-power switching applications, SiC devices are expected to produce substantial savings due to the reduced power loss made possible by these parts. Cree now will make prototypes of the codeveloped SiC power diode for testing while the partners continue their development program.

The wafer steppers required to fabricate 16-gigabit DRAMs moved closer to commercialization, thanks to a technical collaboration between NIKON CORP., the world leader in photolithography step-and-repeat tools and scanners, and INTERNATIONAL BUSINESS MACHINES CORP. Today's state-of-the-art steppers can print line widths of 0.15 micron. Given the density of 16-megabit memories, however, circuit geometries will have to be less than 0.1 micron. That is where the Nikon-IBM work comes in. They figured out a way to scale the mask pattern before it is projected, something not done now. Based on its current planning, Nikon will have 16- megabit DRAM-capable steppers available for R&D use in the 2002-2003 time frame.

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

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At a cost of $11.2 million, NIPPON TELEGRAPH AND TELEPHONE CORP. bought an 80 percent stake in AUTOWEB COMMUNICATIONS, INC. Formed in March 1997, the Oak Park, Michigan company has developed secure platforms using original encryption technology and file-sharing servers that allow vehicle manufacturers and their parts suppliers to reliably and inexpensively exchange sensitive technical information, including CAD (computer-aided design) data. More than 1,000 companies in the United States already use AutoWeb's services. By combining its technology with that of its new subsidiary, NTT hopes to expand AutoWeb's business to include the development of platforms that support the entire supply chain management system. The communications giant also wants to broaden AutoWeb's customer base by extending it to industries outside vehicles and to Japan and elsewhere in Asia. SUMITOMO CORP. and two of its affiliates are among the original investors in the start-up.

The 3.0 release of TurboLinux, PACIFIC HITECH, INC.'s flagship Linux product and the top-selling version of this server operating system in Japan, is selling in the United States for $50. TurboLinux 3.0, which also has the distinction of being the only version of Linux available in English, Japanese, Chinese and several European languages, bundles more than 700 applications, including Corel WordPerfect for Linux, Netscape Communicator 4.5, Apache, Samba 2.0 and the TurboDesk graphical user interface.

A number of Japanese companies are trying to revive interest in the once controversial but recently dormant TRON (real-time operating system nucleus) architecture as an alternative to Windows for PCs. About 45 companies, including MITSUBISHI ELECTRIC CORP., have formed Tokyo- based SENNET CORP. to develop and promote BTRON (business TRON). One of its earliest moves will be the establishment of GLOBAL OS CORP. in Sunnyvale, California to develop English-language application software for BTRON.

Independent software developer COMPUTER INSTITUTE OF JAPAN, LTD., which has been in business since 1976, now has a wholly owned subsidiary in Cupertino, California. CIJSJ AMERICA, INC.'s primary job is to convert into Japanese English-language software for sale in Japan. It also will conduct market research, engage in software development and provide integration and consultation services. Yokohama-based CIJ has another California affiliate, UNITECH RESEARCH, INC. of Irvine, which it opened in 1989.

In April, start-up software developer GLOBALCOM, INC. will open a subsidiary in Denver. GCI (USA) CORP. initially will study the feasibility of developing software for PDA (personal digital assistant) devices. It also will collect information for its Tokyo-based parent, which MIJ CO., LTD. formed in March 1998. GCI (USA) expects to hire 10 people this year but to have 100 employees in 2001. By then, its parent projects that it will be doing $20 million worth of business.

To help American retailers and distributors respond quickly to changing consumer preferences, NEC CORP.'s main U.S. subsidiary formed DCM SOLUTIONS, INC. in Irving, Texas. The company, which has 30 employees but expects to expand over the next three years to 110 people, will provide integration services and software initially to such retailers as convenience stores, supermarkets and drug stores. Demand chain management, the origin of the new company's name, is the organizing concept for DCM's business. With it, retailers can achieve better inventory management and more timely feedback for merchandise management. NEC projects that DCM, which will leverage its experience in building and supporting systems for retail chains in Japan, will have revenues of $65 million in FY 2002.

The next evolution of NICHIMEN GRAPHICS INC.'s N-World suite of real-time content creation tools will arrive in March. The three-dimensional animation package Mirai is a suite of software development tools that, according to the NICHIMEN CORP. company, will deliver new levels of performance, versatility and usability not available until now in a single package. Mirai is designed primarily for game developers and high-end character animators, but industry analysts believe that it also could find a market in such applications as film and video, visual simulation and Web- based content creation. Mirai will have a suggested price of $6,500.

In a coup for YOKOGAWA ELECTRIC CORP. in the electronic design automation field, CADENCE DESIGN SYSTEMS, INC., the international leader in this business, will distribute around the world YEC's processor models and its VirtualICE coverification tool, which includes a software debugger. The multiyear OEM agreement gives San Jose, California-based Cadence access to more than 20 of Yokogawa Electric's processors for embedded applications along with the associated coverification technology. These products allow fast virtual prototyping so that chip designers can address hardware/software integration issues before a design is committed to physical prototyping. The VirtualICE coverification debugger is tightly linked with Cadence's Affirma hardware/software verifier. They will be sold as a package for $40,000 in the United States. The processor models will be marketed separately at prices between $20,000 and $25,000 each.

YAMAHA CORP.'s software-based music synthesizer will be preinstalled in COMPAQ COMPUTER CORP.'s Presario home computers. The S- YXG50 reproduces music that meets the international electronic musical instrument standard known as MIDI, says the world's largest manufacturer of musical instruments. With the Compaq order in hand, Yamaha expects to ship 10 million music synthesizers in 1999.

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

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NEC BUSINESS NETWORK SOLUTIONS, INC., the Irving, Texas communications systems integration subsidiary of NEC CORP., exercised a December 1997 option to purchase the network integration division of ENTERPRISE NETWORKING SYSTEMS, INC. The acquisition of this part of the Redwood City, California company's business is aimed at better positioning NEC BNS to deliver integrated multiservice network solutions to big companies and national accounts by combining ENS's experience in network integration with NEC BNS's voice, data and video hardware/software products and services. The enlarged NEC BNS has a payroll of 960 people. It is projecting revenues of $700 million or so in 2002, or roughly three times more than the 1998 figure.

In a major endorsement of its SONET/SDH (synchronous optical network technology/synchronous digital hierarchy) digital microwave radio technology, NEC CORP., through its main U.S. subsidiary, has a five-year, nearly $100 million contract to supply this equipment to PATHNET, INC. This four-year-old Washington, D.C.-based wholesale communications services provider had as of last September 1,200 route miles of operational network. At that time, an additional 5,500 route miles of network were under construction, and 10,000 route miles of network were under contract. The 2000 Series SONET/SDH-based digital microwave radio ordered by Pathnet provides high-capacity radio links for networks. NEC has provided technical assistance to the start-up since its formation.

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

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Starting in the spring of 2000, TOYODA TRW AUTOMOTIVE INC., a manufacturer of pumps and hoses for power steering systems, will switch to the P4 power steering pump at its Morristown, Tennessee factory. The nine- year-old joint venture among TOYODA MACHINE WORKS, LTD., TOYOTA TSUSHO CORP. (10 percent) and TRW INC. (10 percent) will spend about $8.9 million to launch production of the new pump. It is said to improve fuel consumption by up to 50 percent compared with the current P3 power steering pump, while being more compact, weighing less and lowering noise and vibration. Production of the P4 is expected to run to 40,000 units a month at full-capacity operation. All of this output will go to TOYOTA MOTOR CORP.'s North American assembly plants.

FUJI HEAVY INDUSTRIES, LTD. has delivered the first production wing for RAYTHEON AIRCRAFT CO.'s Hawker Horizon business jet under a summer 1996 development and production agreement. The Hawker Horizon, which is scheduled to enter commercial service in 2001, is designed to carry eight to 13 passengers up to 3,400 nautical miles, or across the United States. It features a carbon-fiber composite fuselage and swept, all-metal wings. FHI spent about $17.7 million to develop the wings. It expects to ship wings for six planes to Raytheon Aircraft's Wichita, Kansas plant during 1999.

With technical assistance from the Euless, Texas-based Menasco Aerosystems Division of COLTEC INDUSTRIES INC., a leading maker of aircraft landing gear, SUMITOMO PRECISION PRODUCTS CO., LTD. has developed the main and nose landing gear for BOMBARDIER, INC.'s CRJ700 70-passenger jet. The Hyogo prefecture company already has delivered prototypes to the Montreal aircraft manufacturer. It will start commercial production of the landing gear in March.

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

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MITSUBISHI HEAVY INDUSTRIES, LTD., the prime contractor for Japan's all-domestic H-II heavy-lift booster, has won a contract to supply second-stage liquid hydrogen fuel tanks for the Delta IV, the next-generation launch vehicle being developed by BOEING CO. for both the U.S. Air Force and commercial customers. The Delta IV family includes five rockets with payload capacities ranging from 9,200 pounds to 29,000 pounds. All variants use Boeing's Rocketdyne RS-68 liquid hydrogen/liquid oxygen-burning, 650,000- pound-thrust common booster core engine. A Delta II or a current-generation Delta III second stage then will be mated to the CBC. The first U.S. Air Force launch of the Delta IV is scheduled for 2001. MHI already supplies second- stage liquid hydrogen fuel tanks for the Delta III as well as its first-stage fuel tanks.

Commercial production will start in March at IBIDEN CO., LTD.'s Portland, Oregon plant. IBIDEN GRAPHITE OF AMERICA CORP. will import graphite products from its Gifu prefecture parent and then finish them to customers' specifications. These products are used in semiconductor parts and as electrodes in electrodischarge machines. IGA is looking for sales of $17.7 million in the first year of full-scale operation.

The prospect of a fourth year of losses persuaded NIPPON PAINT CO., LTD. to sell SUPRATECH SYSTEMS INC., a manufacturer of flexographic printing plates. The Charlotte, North Carolina company opened for business in the spring of 1995. At the time, its plates represented an environmental breakthrough since they were water-developable; that eliminated the use of harmful chloride organic solvents.

The strength of U.S. stock prices proved irresistible to two Japanese companies that need to raise money for operations, including restructuring. Upscale retailer MITSUKOSHI, LTD., Japan's number-two department store operator, sold the 12 percent stake in TIFFANY & CO. that it had owned since 1989. Despite the sale, Mitsukoshi and Tiffany will continue their business relationship in Japan, which dates back to 1972. The jewelry retailer has more than three dozen boutiques in Mitsukoshi stores as well as several freestanding stores. For its part, ITOCHU CORP. sold its remaining block of stock in TIME WARNER INC. for a profit of roughly $520.4 million. Altogether, this transaction plus sales of Time Warner stock last March and again in September netted the trader an estimated gain of $796.5 million on its $500 million investment in the media conglomerate in 1992. TOSHIBA CORP., which also invested $500 million in Time Warner at that time, has sold all but a few hundred thousand shares of its stake.

Another Japanese organization is ready to help Japanese start- ups and entrepreneurs raise venture capital money in the United States or establish a presence here (see Japan-U.S. Business Report No. 349, October 1998, p. 11, and No. 350, November 1998, pp. 10-11). The nonprofit Smart Valley Japan has opened an office in San Jose, California to provide a broad range of services to companies just starting up or individuals with marketable business ideas. Smart Valley Japan hopes to sign up 50 companies and 170 individuals for its services in 1999. In 2001, it projects, revenues could total $1.1 million or so.

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

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American Companies in Japan


In what surely is a record for action by the Ministry of Health and Welfare, Viagra (sildenafil citrate), PFIZER INC.'s oral therapy for erectile dysfunction, was cleared for marketing in just six months (see Japan-U.S. Business Report No. 347, August 1998, p. 9). Pfizer attributed the quick approval in part to MHW's willingness to review clinical information from the United States and other countries where Viagra is in use in addition to conducting clinical trials in Japan. To be available in late March in both 25- milligram and 50-milligram tablets, Viagra will be manufactured locally by PFIZER PHARMACEUTICALS INC. The drug will not be covered by Japan's national health insurance system so patients will have to cover the complete cost themselves. Pfizer Pharmaceuticals has suggested that dispensers charge about $9.75 for the 25mg tablet and and $11.50 for the 50mg version. Given the expected popularity of Viagra and other drugs that the company plans to introduce, Pfizer Pharmaceuticals hopes to add 560 medical representatives between 1999 and 2001 to its current staff of 1,280 salespeople. Over the same time frame, the company projects that its annual sales will expand to nearly $2.4 billion from about $1.3 billion in 1998.

BRISTOL-MYERS SQUIBB CO.'s subsidiary is marketing what in the United States is called Betapace (sotalol hydrochloride). This drug, a beta- blocker, is designed for the treatment of life-threatening ventricular arrhythmia. It was cleared for Japanese sale under the provision for treatments for rare conditions. Betapace was the first such drug approved for arrhythmia.

Genotropin, a genetic recombinant natural human growth hormone product that is the world's leading treatment for growth hormone deficiency, is being sold directly by the subsidiary of developer PHARMACIA & UPJOHN, INC. From 1988 until mid-1998, SUMITOMO PHARMACEUTICALS CO., LTD. had Japan sales and marketing rights to Pharmacia & Upjohn's top- selling product (see Japan-U.S. Business Report No. 341, February 1998, p. 11). With the start of direct sales, P&U's Tokyo operation detailed 130 medical representatives to work exclusively with Genotropin.

An oral medication for the management of the manifestations of psychotic disorders, including schizophrenia, discovered and developed by the Wilmington, Delaware-based Zeneca Pharmaceuticals unit of ZENECA INC., will be marketed exclusively in Japan by FUJISAWA PHARMACEUTICAL CO., LTD. SEROQUEL (quetiapine fumarate) belongs to a new class of atypical antipsychotics known as dibenzothiazepine derivatives. It has been available in the United States since the fall of 1997. The Osaka subsidiary of London's ZENECA GROUP PLC filed a new drug application for SEROQUEL with MHW in December. Fujisawa Pharmaceutical hopes to have the drug on the market around 2001.

In exchange for an up-front fee of $2 million and future milestone payments, TRANSKARYOTIC THERAPIES, INC. of Cambridge, Massachusetts gave SUMITOMO PHARMACEUTICALS CO., LTD. the right to develop and commercialize in Japan and elsewhere in Asia an enzyme replacement therapy for Fabry disease. This rare genetic disorder is caused by deficient activity of the lysosomal enzyme alpha-galactosidase A, which leads to the buildup of a toxic lipid in various organs and tissues of the body. These deposits can result in pain in the extremities, renal and cardiovascular disease, and stroke. In the United States, where Phase II clinical trials of TKT's alpha-gal A treatment recently started, the enzyme replacement therapy is on FDA's fast approval track. It also has received orphan drug status from the regulatory agency.

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

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For whatever reason, American vendors have won few government-funded contracts for supercomputers, whether traditional vector machines or massively parallel processing systems, lately. IBM JAPAN LTD. is a rare recent exception. It received an order worth $12.4 million from the Ministry of International Trade and Industry's Agency of Industrial Science and Technology for a RS/6000 SP parallel processing system. Equipped with 256 332-MHz PowerPC 604e processors, the Unix-based system will be installed by the end of March in AIST's information and calculation center. It will be used for complex scientific calculations, including materials research.

In a deal that could give IBM JAPAN LTD. a better chance of supplying hardware/software solutions to Mitsubishi Group companies, particularly financial data systems, the company signed MITSUBISHI ELECTRIC CORP. to market its RS/6000 line of Unix servers and also agreed to provide its Netfinity line of PC servers to the big electronics manufacturer on an OEM basis. The new relationship is off to a fast start. IBM Japan and MELCO will install a RS/6000 SP system at BANK OF TOKYO-MITSUBISHI, LTD. to handle settlements at the top commercial bank's nationwide branches via a network of 800 servers.

The slow but steady migration of workstation users from the Unix platform to Windows NT machines has trimmed SILICON GRAPHICS, INC.'s mainstream computer graphics business as much in Japan as at home. Its subsidiary has mapped out a comeback strategy, however. The centerpiece is SGI's first Windows NT workstation, the Visual Workstation 320 minitower line and the Visual Workstation 540 tower series. At the heart of these machines, which will be sold alongside the company's proprietary Unix workstations, is a custom-designed chipset known as Cobalt that is based on INTEL CORP. integrated circuits but includes SGI-specific chips for video, audio and three-dimensional modeling. The Mountain View, California maker claims that this part allows faster communications between the processor and video systems than is possible with the AGP (accelerated graphics port) chipset found in competing Windows NT workstations. SGI maintains as well that its machines offer better price/performance than other systems on the market. The Visual Workstation 320, which can handle two Pentium II processors, starts at $6,000 in Japan, while the Visual Workstation 540, a machine capable of harnessing the power of four Pentium II Xeon processors, has a base price of $10,600.

SILICON GRAPHICS, INC.'s subsidiary is betting that it can sell 20,000 Windows NT workstations in 1999. Roughly 3,000 of these sales are expected to result from an OEM deal with TOSHIBA CORP. The local unit's first OEM supply arrangement also marks the first time that the big Japanese manufacturer has sold Windows NT workstations. It currently sources Unix workstations from SUN MICROSYSTEMS, INC. for resale in Japan.

Another element of SILICON GRAPHICS, INC.'s strategy for reenergizing its Japanese business involves a partial reorganization of its subsidiary's operations. Four new business units have been formed. One handles direct sales of ERP (enterprise resource planning) and large data- base systems to corporations. Another manages workstation sales by distributors. The company now also has a stand-alone systems integration unit. The fourth new group is in charge of devising marketing campaigns.

Other U.S. computer makers are adding services to build their customer bases and revenues. HEWLETT-PACKARD JAPAN LTD., for example, has started a network technical support service. Through either telephone consultations or remote diagnostics during regular business hours, the HP Network Environment Support service helps customers locate and fix problems in their local area networks and wide area networks. The service charges vary depending on the size of the network. For its part, the Japanese operation of direct marketer DELL COMPUTER CORP. has launched a technical support program for its corporate customers. For a fee, they can receive help with hardware and software problems either by talking directly with a service representative or via fax or electronic mail. The assistance actually comes from a network services affiliate of UNISYS CORP.'s subsidiary under a worldwide services-support partnership agreement between the two parent companies.

The local unit of fellow direct marketer GATEWAY 2000, INC. has contracted with Tokyo-based THE POINT STUDIO to provide setup and training for buyers of its PCs. It also has tapped MARUBENI CORP. to provide Internet services to Gateway customers through one of the trader's affiliates. .....In another business-boosting move, GATEWAY 2000, INC.'s subsidiary has formed a sales division to market PCs to corporate Japan and the government. These potential buyers can order systems built to their specifications as well as customized software. Through this redeployment of its marketing staff, Gateway hopes to achieve a 20 percent gain in major- account sales.

The direct marketing strategies of DELL COMPUTER CORP. and GATEWAY 2000, INC. are taking sales away from COMPAQ COMPUTER CORP. in Japan as well as in the United States — or so it would seem from the world PC leader's decision to give Japanese customers the option starting this summer of ordering machines from its Internet site. The company simultaneously will release new Prosignia server, desktop and notebook models priced 20 percent to 30 percent below current machines. On-line buyers will be able to customize these machines by choosing processor type and speed, system memory size and hard drive capacity. The new Prosignia models also will be sold through Compaq's traditional value-added reseller and retail store channels. The company hopes to sell at least 20,000 PCs over the Internet in the first six months after its Compaq Customer Choice Model becomes available. In time, it would like to generate anywhere from 20 percent to 30 percent of its Japan business from on-line sales.

Rounding out its Sun Enterprise 450 line of Unix workgroup servers, SUN MICROSYSTEMS, INC.'s subsidiary introduced a model that can support up to four 400-MHz UltraSPARC-II processors with 4 MB of cache memory each. It joins models powered by 250-MHz and 300-MHz processors. With as much as 4 GB of main memory, up to 182 GB of hot-swap UltraSCSI (small computer system interface) internal storage and more than 6 terabytes of hard drive storage, the Sun Enterprise 450 family is designed for e-mail, data-base applications, clustering, Web service or ERP. A model configured with two 400-MHz UltraSPARC-II chips starts at $55,500.

Targeting the emerging market for interactive video-on-demand, CONCURRENT COMPUTER CORP.'s subsidiary put on the market the MediaHawk Video Server. This system incorporates the Fort Lauderdale, Florida company's system architecture and real-time operating system and provides a scalable performance exceeding 1,000 MPEG-2 digital video streams. Each stream is completely independent and interactive, allowing quick start, pause, rewind, fast forward search and fast backward search of each digital video stream. Concurrent says that the video streams are delivered with no degradation of performance or video quality regardless of the number of simultaneously supported digital video streams. The company's Japanese arm priced the smallest configuration of the MediaHawk Video Server at $35,400. In advance of introducing high-end servers powered by the next- generation Alpha 21264 64-bit RISC (reduced instruction-set computing) processor, the Japanese unit of COMPAQ COMPUTER CORP. released an AlphaServer Render Tower running off four to 16 powerful 600-MHz Alpha 21164A chips. Designed for the preproduction and postproduction entertainment and animation markets, the system can utilize either the Digital Unix or the Windows NT operating system. The Digital Unix version costs $197,300 for the top-end, 16-processor configuration. The Windows NT system, which supports four processors, lists for $137,200. The AlphaServer Render Tower is premounted in a rack, and each rack comes prewired for additional systems and has a built-in hub.

The fast growth of the Linux server operating system has attracted the attention of HEWLETT-PACKARD CO. It announced worldwide support for this freeware version of Unix across its NetServer family in cooperation with RED HAT SOFTWARE, INC., one of the top Linux distributors. The HP NetServer LPr will be the first system to run Red Hat Linux v5.2. It will be released in Japan in April. Designed for Internet service providers and corporate information technology departments, the HP NetServer LPr features one or two 400-MHz or 450-MHz Pentium II processors, two hot- swap hard disk drives and up to 1 GB of memory.

Quickly filling out its lineup of PC servers, a market it entered last fall, GATEWAY 2000, INC.'s subsidiary introduced the midrange ALR 8300. Built around a 450-MHz Pentium II Xeon processor with 512 KB of L2 cache, this system comes standard with 128 MB of ECC synchronous DRAM memory (expandable to 1 GB), a 9-GB hard drive, a 13X/32X CD-ROM drive, a 1.44-MB 3.5-inch diskette drive and seven PCI slots for $5,700.


For cost-conscious small and midsized businesses, DELL COMPUTER CORP. released worldwide a workgroup server with a desktop system-like price. In Japan, the base configuration of the PowerEdge 1300 costs $2,100. That covers a 350-MHz Pentium II processor, 64 MB of internal memory, a 4-GB hard drive and HEWLETT-PACKARD CO.'s OpenView Network Node Manager Special Edition for system and network management of up to 250 nodes and HP's ManageX Special Edition for application and operating system management.

In a move that generated a lot of speculation in the industry about motives, GATEWAY 2000, INC. released a Japan-only desktop PC powered by ADVANCED MICRO DEVICES, INC.'s 400-MHz AMD-K6-2 processor. This marks the first time that a build-to-order PC manufacturer adopted an AMD part. The compact machine has 64 MB of main memory (expandable to 224 MB), a 4.3-GB hard drive, an innovative 2X DVD-ROM drive that doubles as a 20X CD-ROM drive with a hardware MPEG decoder, and a 15-inch TFT LCD display. Available through Gateway's direct sales operation and at the three Gateway Country stores in Japan, the system has an estimated street price of $1,800 to $2,200.

GATEWAY 2000, INC. also attracted industry attention with the introduction of the Solo 3100 SE-DVD notebook PC. This machine includes a 2X DVD-ROM drive as well as Dolby 5.1-channel surround-sound Digital Theater speakers from BOSTON ACOUSTICS, INC. of Peabody, Massachusetts. For a real home theater experience, the portable can be plugged into a television set. For mobile computing, the Solo 3100 SE-DVD offers a multimedia-optimized 266-MHz Celeron processor, 64 MB of system memory, a 2.1-GB hard drive and a 12.1-inch TFT LCD display. The base system goes for about $2,500.

About $3,700 buys the mobile professional a COMPAQ COMPUTER CORP. notebook that runs the Windows NT operating system and is compatible with the forthcoming Windows 2000. This all-in-one portable is the latest member of the Japan-adapted Armada 1700 Value Series. Employing a 266-MHz mobile Pentium II processor and offering 32 MB of synchronous DRAM standard, a 4-GB hard drive and a 24X CD-ROM drive, the machine has a 13.3-inch TFT LCD display, a full-sized keyboard and dual integrated speakers. With the release of this system, Compaq cut prices on four other Armada 1700 Value Series models by up to 12 percent.

COMPAQ COMPUTER CORP. hopes to win over some of Japan's huge ranks of first-time home PC buyers with the feature-laden but aggressively priced Presario 5200 Series. These new models use the fastest ADVANCED MICRO DEVICES, INC. AMD-K6-2 processor, the key to pricing that in the United States runs from $900 to $1,300. The series features what Compaq calls the Creativity Action Center, which provides USB and gaming ports on the front of the machines for easy connection to joysticks, digital cameras and other peripherals, as well as ATI 2X AGP 3D graphics. Included, too, is a port for connecting next-generation digital displays.

The instant success of the iMac home computer in Japan no doubt has created more than a little envy among PC vendors. APPLE COMPUTER, INC.'s subsidiary intends to keep the sales momentum going with the release of faster, more colorful versions of the sleek, all-in-one machine. Buyers now have a choice of strawberry, tangerine, lime, grape or blueberry models in addition to the original teal. More important, the new iMacs are powered by a 266-MHz PowerPC G3 processor and include a 6-GB hard drive. And, they are priced to sell at $1,400 or so, 11.2 percent less than the original iMac (see Japan-U.S. Business Report No. 348, September 1998, p. 11). To spur sales of that model, Apple cut the price 28 percent to $1,100.

In its own words, APPLE COMPUTER, INC. "reinvented" its mainstay Power Macintosh G3. The new system has a faster processor (the 400-MHz PowerPC G3), plus up to 1 MB of 150-MHz or 200-MHz backside cache and a 100-MHz system bus. It also provides up to 1 GB of system memory, as much as 100 GB of internal disk storage, four PCI slots and additional ways to connect to external devices using built-in 10/100 Base-T Ethernet, USB and FireWire ports. The new Power Mac G3 also comes with the first built-in ATI RAGE 128 graphics accelerator for faster 3D graphics. In the process of adding capabilities, Apple also made the minitower smaller and introduced a side panel that swings open for instant access to all components.

The many companies in Japan that still use S/390 mainframes but have added Netfinity PC servers soon will have a way to directly connect the two types of hardware. IBM JAPAN LTD. has a late March ship date for the $21,200 Netfinity Escon adapter, which makes it possible to transfer data back and forth between the mainframe and the servers at a rate of 17 megabits per second.

With the IEEE 1394-compliant DVLink hardware/software solution, users of SILICON GRAPHICS, INC.'s O2 graphics workstation can receive and transfer multiple digital video streams simultaneously from other IEEE-enabled devices, such as digital video camcorders, as well as from other desktop systems at the standard's maximum data transfer rate of 400 Mbps. This capability, SGI says, makes it extremely simple and cost- effective to produce high-quality video on the desktop. The company's subsidiary has priced DVLink at $1,100.

Big companies have two new backup and archiving options. The Sun StorEdge L1000 Tape Library system from SUN MICROSYSTEMS, INC.'s subsidiary supports up to four DLT7000 digital linear tape drives and 30 cartridges. One of the deskside or rack-mounted units can handle as much as 1 terabyte of data with a throughput of 72 GB per hour. The base configuration starts at $308,000. Meanwhile, the marketing arm of Louisville, Colorado-based STORAGE TECHNOLOGY CORP. has released a new approach to storage capacity problems: Virtual Storage Manager. Working with the storage industry's Nearline automation architecture, VSM, stripped to its essentials, makes better use of existing space. It does this by initially storing data in a disk buffer and then grouping the information so that it can be stacked and written on a single tape cartridge. The cost of adding capacity without adding real space or real media is not inexpensive, though. VSM starts at $432,700.

MTI TECHNOLOGY CORP., a manufacturer of enterprise storage products, has moved into the Japanese market through a distribution agreement with SOLITON SYSTEMS K.K. The Anaheim, California company's Gladiator 6000 and 3000 series of RAID (redundant array of independent disks) devices provide high-availability, terabyte-class fault-tolerant storage solutions for UltraSCSI and Fibre Channel environments. These products start at $26,500. Soliton also will handle MTI Technology's StorageWare line of non-RAID disk and tape storage expansion products for Windows NT and Unix platforms. The new partners plan to work together to deliver SAN (storage area network) solutions for the Tokyo distributor's customers.

The Fireball line of 3.5-inch hard drives for desktop systems soon will have a new member. QUANTUM CORP.'s subsidiary is sampling the Fireball Plus KA, which is said to be the first 7,200-rotations-per-minute Ultra ATA/66 drive. To be available in capacities ranging from 6.4 GB to 18.2 GB, the new products also are the first to incorporate the Milpitas, California maker's Data Protection System for determining hard-drive functionality in PCs that exhibit system failure. The 18.2-GB Fireball Plus KA is sampling for $520.

IBM JAPAN LTD. is working with CLARION CO., LTD. to adapt INTERNATIONAL BUSINESS MACHINES CORP.'s 340-MB "microdrive" for the multifunctional Clarion Auto PC for vehicles (see Japan-U.S. Business Report No. 352, January 1999, p. 3). Clarion believes that it will need the capacity of this subminiature format when the intelligent transportation system comes into use. The main focus of the IBM Japan-Clarion collaboration is to make the microdrive vibration-resistant as well as immune to temperature changes.

The list of licensees of COLOROCS INFORMATION TECHNOLOGIES, INC.'s patented color imaging technology now includes CANON INC. It has the right to use this know-how in its copiers, printers and fax machines. The Atlanta company's previous Japanese licensees are MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., MINOLTA CO., LTD., MITSUBISHI ELECTRIC CORP. and RICOH CO., LTD.

The subsidiary of CALCOMP INC. is projecting sales of 800 of the Solus 4 Model 54424 LP LED (light-emitting diode) networked plotter for CAD, graphics and document management applications. The system can output A to D-size (A4 to A1) plotting with a resolution of 400 x 400 dots per inch at a rate of 10 pages per minute for A-size plots. The plot scan can be as long as 26 feet and as wide as nearly 24 inches. At a cost of $29,200, Anaheim, California-based CalComp, a LOCKHEED MARTIN CORP. company, claims that the Solus 4 beats the performance and the pricing of comparable laser plotters.

PLANAR SYSTEMS, INC., the largest of the few U.S. makers of flat panel displays, has licensed its electroluminescent display product technology to DENSO CORP. on a royalty-bearing basis and agreed to share its manufacturing know-how with Japan's top automotive parts maker. The tie-up is expected to accelerate the use of EL displays in all types of vehicle electronic systems. Denso has worked on developing EL display technology for cars and light trucks, while Beaverton, Oregon-headquartered Planar has focused on the nonconsumer vehicle market, including aircraft, trains, taxis and long-haul trucks. Electroluminescent flat panel displays are known for their wide viewing angle, long life and reliability under harsh environmental conditions.

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

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The world's top real estate services company, Los Angeles-based CB RICHARD ELLIS, will merge its Tokyo operations with those of IKOMA CORP. and acquire 20 percent of the real estate services market leader in Japan. IKOMA/CB RICHARD ELLIS, to be headquartered in Osaka, will be part of the CB Richard Ellis global network, which has more than 200 offices in 30 countries. The merger comes at a time when many analysts believe that the Japanese property market, on the skids for years, is poised to rebound. Through a nationwide network of 20-plus offices, the joint venture will be positioned to provide enhanced property sales and leasing, property management, facilities management and other corporate services as well as investment services to CB Richard Ellis clients doing business in Japan. The American company, itself the product of a merger and an acquisition within the last year, found Ikoma an attractive partner in part because of its data base of information on office space in some 100,000 buildings in Japan.

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

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RIMAGE CORP., the largest manufacturer of replication and finishing equipment for CD-ROM, CD-R and other digital media, has moved into the Japanese market through a distribution arrangement with MARUBENI MACHINERY CORP. The Tokyo company will market two models of the Perfect Image Producer System, described by the Minneapolis vendor as the only automated CD-R publishing system that fully integrates file transfer, recording and surface printing in a continuous flow. The original Autostar has one to four recorders, with the largest configuration priced at $43,400. The newer, compact Protege has two recorders and costs $30,100. Marubeni Machinery expects to sell 100 Perfect Image Producer Systems in 1999 and 500 units a year after three years.

In March, the subsidiary of AMERICAN POWER CONVERSION, the market leader in uninterruptible power supplies for computer systems, routers, switches, hubs and similar products, will release the APC Web/SNMP Management Card. Via a Web browser, the $485 product manages the UPS devices that protect networking equipment from power-related events. The APC Web/SNMP Management Card works with the West Kingston, Rhode Island firm's Smart-UPS, Matrix-UPS and Symmetra PowerArray.

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

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Still attempting to reap the efficiency gains of a merger without actually taking this step, EXXON CORP.'s two affiliates will combine their sales, finance, management and distribution divisions by June or July (see Japan-U.S. Business Report No. 346, July 1998, p. 15). On the personnel front, ESSO SEKIYU K.K. and GENERAL SEKIYU K.K. plan to cut their work forces by 25 percent, or 650 people, through early retirement and attrition for a projected annual saving of $115 million. The two service station operators also will trim their branch offices to a total of 19 from 32. Whatever other changes occur, Esso Sekiyu and General Sekiyu will continue to operate their own chain of gas stations.

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

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GE CAPITAL CORP. is known for its willingness to use acquisitions to build a leading position in different parts of Japan's financial services market. It now has the distinction of paying the highest price ever for a Japanese company — an estimated $7.7 billion for the equipment leasing business of JAPAN LEASING CORP., two of its support services affiliates, plus JAPAN LEASE AUTO CORP. and its maintenance subsidiary (see Japan- U.S. Business Report No. 351, December 1998, pp. 15-16). Bankrupt Japan Leasing, the country's third-largest equipment lessor, has 41 nationwide sales offices and 71,000 customers. Its assets total $17.7 billion, including $7 billion in leasing assets. It will continue to operate under the Japan Leasing name, with GE Capital retaining about 800 of the company's 1,000 or so employees. Japan Lease Auto, which ranks as the second-largest auto leasing company with 140,000 vehicles under lease, has 27 sales branches, four remarketing centers, nearly $1.2 billion in assets and roughly 15,000 customers. Already in the auto leasing business in Japan through a 1996 acquisition, GE Capital is keeping all 500 of Japan Auto Lease's employees. In addition to its leasing operations, the wholly owned GENERAL ELECTRIC CO. subsidiary provides consumer finance services in Japan through three firms and offers life insurance and investment management services through GE CAPITAL EDISON LIFE INSURANCE CO.

The brokerage subsidiary of MERRILL LYNCH & CO., INC. — the other American company whose activities have come to symbolize the new environment in Japan for American and other foreign financial services providers — will increase its sales staff during 1999. Last July, MERRILL LYNCH JAPAN SECURITIES CO., LTD. launched a nationwide network of 33 offices with some 2,000 employees hired from failed YAMAICHI SECURITIES CO., LTD. (see Japan-U.S. Business Report No. 347, August 1998, p. 14). It plans to add as many as 200 people to its current sales force of 1,000 or so in the hope of quickly boosting the relatively small $2.2 billion in assets that it had under management at the end of 1998.

The 1 million-plus AMERICAN EXPRESS CO. cardholders in Japan have a ready-made source of financial services and products. Minneapolis- head-quartered AMERICAN EXPRESS FINANCIAL ADVISORS INC. has opened a Tokyo branch. The new business will distribute its products directly to AmEx cardholders in the first half of 1999 before expanding its mail and telemarketing operations to targeted prospects later in the year. A range of investment products will be offered to customers, although the initial ones will be money market mutual funds.

One of the oldest and biggest American asset management companies is bringing its expertise to Japan. T. ROWE PRICE ASSOCIATES, INC., the investment adviser to the T. Rowe Price family of no-load mutual funds, has an agreement in principle to partner with SUMITOMO BANK, LTD. and DAIWA SECURITIES CO., LTD. when the two Japanese companies merge their money management subsidiaries in April. The Baltimore company will acquire a 10 percent interest in tentatively named DICAM SB ASSET MANAGEMENT CO., LTD. for approximately $16 million. Sumitomo Bank and Daiwa Securities, which will contribute the $29 billion in assets they collectively manage to the joint venture, will each own 44 percent of the new company. The remaining 2 percent will be held by SUMITOMO TRUST & BANKING CO., LTD. Tokyo-headquartered DICAM SB will start off as one of Japan's biggest asset managers, serving both retail and institutional investors. Its non-Japanese equity investments will be managed by an equally owned company that T. Rowe Price will form with its longtime British partner, ROBERT FLEMING HOLDINGS, LTD. The American investment adviser also is expected to develop investment trusts (Japanese-style mutual funds) for DICAM SB and to help it pursue opportunities in the defined contribution pension market in Japan as this business develops.

In a less formal arrangement, ALLIANCE CAPITAL MANAGEMENT L.P. reportedly will help MITSUI MARINE & FIRE INSURANCE CO., LTD. develop investment trust products for the local market. The relationship will start in April when Japan's third-largest nonlife insurer makes MITSUI MARINE INVESTMENT MANAGEMENT CO., LTD., in which it now has a 10 percent stake, a wholly owned subsidiary. The insurer already is marketing investment trust products from Manhattan-based Alliance Capital, which provides mutual funds for individual investors as well as for institutional investment management and other mutual fund companies.

In a twist, a New York City investment advisory and venture capital company founded by Japanese interests is introducing the very American fund-of-funds concept to institutional investors and high-income individuals in Japan. ZERON GROUP has established a Tokyo subsidiary and launched the 9-year-old Ultima Fund, said to be the pioneer fund of funds. ZERON hopes to raise $100 million a year from banks, insurers, pension fund managers and other institutional investors for investment in the Ultima Fund, which it helped to establish.

Some competition is on the horizon. With investment advice from PACIFIC CORPORATE GROUP, a La Jolla, California business that specializes in advising institutional investors and high net worth individuals on private market investment alternatives, MITSUBISHI CORP. plans to establish a private equity fund of funds for local institutional investors. Structured specifically for Japanese investors, the fund of funds will invest in global rather than country-specific assets. Mitsubishi hopes to raise $50 million for the dollar-denominated fund, which will seek a minimum annual return of 20 percent. The trader will market the fund of funds, expected to be the first of several developed with the help of Pacific Corporate Group, through a securities subsidiary of its merchant bank department that will begin operations April 1.

Some new Franklin Templeton internationally oriented mutual funds are available in Japan, initially through SUMITOMO BANK, LTD. and MEIKO SECURITIES CO., LTD., a midsized broker affiliated with Sumitomo Bank. FRANKLIN MUTUAL FUND ADVISERS, INC., a subsidiary of San Mateo, California-based FRANKLIN RESOURCES, INC., is managing the funds, which invest in the securities of American and European companies.

Investment banker BEAR STERNS COS. INC. will advise CLAREMONT CAPITAL HOLDING INC., a venture capital company, on mergers and acquisitions. The New York City business will suggest deals or evaluate targets identified by Claremont Capital as well as handle the takeover negotiations. Bear Sterns also reportedly will help SANYO INVESTMENT TRUST MANAGEMENT CO., LTD., which is part of the Claremont Capital group, to develop and manage investment trusts.

CITIBANK N.A. and SHIZUOKA BANK, LTD. have jointly issued a bank card, marking the first such tie-up between banks in Japan. The regional bank's customers can use the card at Shizuoka Bank cash dispensers and automatic teller machines as well as at any of the ATMs that Citibank has outside Japan. It also can be used as a debit card at stores that honor a Citibank card. With the jointly issued card, the big American bank receives a commission every time it is used at an offshore ATM, while Shizuoka Bank saves the cost of launching an international ATM card on its own. During the rollout, the pair plans to issue between 20,000 and 30,000 cards. This initiative is the latest result of Citibank's strategy of working with regional banks to expand its Japanese presence (see Japan-U.S. Business Report No. 346, July 1998, p. 16).

Continuing to earn its title as the insurance product innovator in Japan, AMERICAN LIFE INSURANCE CO. introduced the first dollar-denominated life insurance policy. The policy has a guaranteed minimum yield of 4 percent.

REINSURANCE GROUP OF AMERICA INC. will help TOKYO MUTUAL LIFE INSURANCE CO. develop new products more quickly. The midsized insurer apparently is eyeing cancer insurance and other so-called third-sector products. The St. Louis company will reinsure — guarantee payment — on the new policies that Tokyo Mutual Life issues. RGA already has a reinsurance arrangement with DAIHYAKU MUTUAL LIFE INSURANCE CO. (see Japan-U.S. Business Report No. 344, May 1998, p. 14).

The changes roiling Japan's financial services market have created consulting opportunities for expert American businesses. For instance, the big accounting company of ERNST & YOUNG LLP has formed a subsidiary to offer its expertise in asset and risk management to financial institutions. E&Y owns 60 percent of ERNST & YOUNG GLOBAL FINANCIAL SERVICE, while its British arm has a 15 percent stake. Japanese accountant SHOWA OTA & CO. put up the remaining 25 percent. The new company is staffed by people from both E&Y and Showa Ota.

For its part, nationalized LONG-TERM CREDIT BANK OF JAPAN, LTD. selected GOLDMAN, SACHS & CO. from a pool of more than 20 interested companies to help it choose a buyer for the bank's viable banking operations. LTCB spokespeople indicated that the investment bank was tapped in large part because of its considerable experience with mergers and acquisitions. Goldman, Sachs also served as a financial adviser to LTCB affiliate JAPAN LEASING CORP. on its sale to GE CAPITAL CORP.

The new consulting opportunities even extend to the government. The Bank of Japan has hired international management consultant MCKINSEY & CO., INC. to advise it on ways to become more efficient and to cut costs, which could involve closing some branch offices and cutting personnel. The central bank expects to receive McKinsey's restructuring recommendations sometime this summer.

HOSPITALITY ASSET SERVICES, L.L.C., a San Diego, California hotel management and consulting firm, is evaluating more than $500 million in nonperforming hotel loans for Japanese bankers and investors. The company is in the process of establishing an office in Tokyo in the hope of winning more such contracts.

Shares of ORACLE CORP. JAPAN are trading on Japan's over-the- counter market after the subsidiary of the big data-base software developer made an initial public offering of 5 million shares, or about 7 percent of the total outstanding. The IPO raised close to $310 million, which the company will use to expand its Japanese operations. One of the few other name American-affiliated firms trading on the OTC market is YAHOO! JAPAN CORP., a joint venture between the Sunnyvale, California Internet search engine provider and SOFTBANK CORP. It went public in October 1997.

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

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The 17 independent COCA-COLA CO. bottlers in Japan — the second-biggest contributor to the soft drink giant's bottom line — long have resisted consolidation and the efficiency gains that mergers would bring to production and distribution. That finally is changing. In a tie-up apparently engineered by headquarters in Atlanta, KITA KYUSHU COCA-COLA BOTTLING CO., LTD. and SANYO COCA-COLA BOTTLING CO., LTD. will merge July 1 in a deal valued at $2.2 billion. The new, publicly traded company, COCA-COLA JAPAN CO., LTD., will be the largest bottler in Japan, with annual revenues estimated at $1.6 billion based on 1998 sales. It will be what Coca-Cola calls an anchor bottler, a company that can exploit economies of scale, tap capital markets for money to expand, boost sales and increase profits. Cola-Cola Japan will serve Fukuoka, Saga and Nagasaki prefectures on Kyushu, Kita Kyushu Coca-Cola's marketing territory, as well as Hiroshima, Okayama, Yamaguchi, Shimane and Tottori prefectures in western Japan, Sanyo Coca- Cola's sales area. Through COCA-COLA HOLDINGS WEST JAPAN CO., LTD., a subsidiary that it will form, Coca-Cola will own about 5 percent of the stock of the merged, Fukuoka-based business. Other major shareholders will be RICOH CO., LTD. (16 percent) and NICHIREI CORP. (8 percent), the top investors in the merging bottlers.

Big Macs will be available in Japan through at least 2030. MCDONALD'S CORP. and MCDONALD'S CO. (JAPAN) LTD. have extended a licensing agreement set to expire at the end of 2000 for another 30 years. McDonald's Japan, which has close to 2,900 outlets now and is gunning for 10,000 restaurants by 2010, is planning an IPO on the local OTC market. The sale is tentatively scheduled for 2002, by which time the company expects to be a $4.4-billion-a-year business. McDonald's, the world's largest food- service organization, will continue to own 50 percent of McDonald's Japan even after the sale of shares to the public.

Consumer spending might be on the skids, but lower property prices are encouraging more American restaurant chains to move into the Japanese market. The latest to announce plans is OUTBACK STEAKHOUSE INC. The Tampa, Florida business could have its first restaurant in operation at a yet-to-be-selected Tokyo location by the fall. According to current thinking, the company will own and manage its initial three or four locations before signing franchise agreements. It is projecting 200 restaurants across Japan within 10 years. Other newcomers include TGI FRIDAY'S INC. (see Japan-U.S. Business Report No. 352, January 1999, p. 16) and QUIZNO'S CORP. (see Japan-U.S. Report No. 349, October 1998, p. 17).

At a cost of $21.3 million, the subsidiary of premium ice cream maker HAAGEN-DAZS CO. has opened a second factory in Aramachi, Gunma prefecture as part of its strategy of producing products specifically for the Japanese market. The PILLSBURY CO. unit adopted this sales-boosting approach in 1995.

Some very American foods have arrived in Japan. KELLOGG CO.'s local operation has introduced two types of frozen bagels (plain and cinnamon raisin) as well as plain and banana bread frozen waffles. AJINOMOTO CO., INC. is handling distribution. For its part, AJINOMOTO GENERAL FOODS INC. is marketing smoothies, drink mixes that buyers freeze and then mix with cold milk. Frozen Club is available in three flavors: expresso, a strawberry, raspberry and blueberry combination and a tropical fruit mix.

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

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For reasons that were not disclosed, TITANIUM METALS CORP. has decided not to buy 5 percent of the stock of new business partner TOHO TITANIUM CO., LTD. (see Japan-U.S. Business Report No. 350, November 1998, p. 19). Other details of their October 1998 alliance remain unchanged, however. For example, TIMET, a Denver-headquartered maker of titanium metal products, and the Kanagawa prefecture-based supplier of titanium sponge and ingot still plan to form a hearth-melting joint venture in Japan.

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

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Some of the world's biggest makers of bearings are headquartered in Japan. That does not deter the subsidiary of TIMKEN CO., a Canton, Ohio supplier of roller and other types of bearings. Its latest strategy is to modularize its bearings and market them aggressively to automotive manufacturers, which find modules easier to use on assembly lines. One potential module is the sensor pack, which combines bearings with the sensors for antilock braking systems. Through such product innovations, Timken believes that in time it can win 10 percent of Japan's bearing market.

SHIN CATERPILLAR MITSUBISHI LTD. expects to sell annually 250 of its remodeled 22-ton-class hydraulic excavators to construction companies and equipment leasing firms. The CAT 322B REGA, which has won the Ministry of Construction's designation as a low-noise piece of equipment, features a redesigned hydraulic mechanism that improves performance. It is available with a bucket capacity of 1.3 cubic yards or 1.4 cubic yards at prices starting at $274,300. The Tokyo operation of landscaping equipment manufacturer TORO CO. is marketing a new golf course management riding mower. Depending on the cutting unit attached, the Reelmaster 3100-D, which uses a KUBOTA CORP. liquid-cooled, three-cylinder diesel engine, can cut a swath 72 inches or 85 inches wide. The height of the cut ranges from 1/4 inch to 2- 5/8 inches.

Rochester, New York-based TRANSMATION, INC. has added model 23617P to the line of pneumatic pumps distributed by JAPAN-USA INSTRUMENT CO., LTD. Weighing just 1.1 pounds, the pump switches between vacuum and pressure with the press of a button. In the United States, the pump costs under $500.

The subsidiary of spray systems manufacturer NORDSON CORP. reported revenues of $74.3 million in the year through September 1998, mainly from the sale of spray adhesive equipment used to seal cardboard boxes. It hopes to add to this total by introducing a system that attaches electronic parts to printed circuit boards by spraying them at low pressure with fast-setting polyamide resin. The Amherst, Ohio company's system includes polyamide resin applicators and a workstation with an integrated work table and controllers. The workstation itself costs $25,700 and up. Nordson's subsidiary is projecting sales of 50 units a year.

Small offices in Japan almost always use stamps rather than a postage meter to mail material. The subsidiary of postage meter giant PITNEY BOWES INC. is out to change that. It has introduced Despo (short for desk post office), a compact postage meter that can be rented for as little as $16.80 a month. Moreover, money can be added to the meter simply by making a phone call. To promote Despo, Pitney Bowes will help customers obtain a permit for the meter and register the machine.

HYDROMAID INTERNATIONAL INC., a maker of garbage disposal systems powered exclusively by water, has tied up with PACIFIC AMERICAN CULTURAL EXCHANGE INC. to bring its products to Japan and other Asian markets. The Draper, Utah company will acquire a 50 percent interest in the Tokyo start-up in exchange for PACE's license to distribute HydroMaid systems in 22 countries. To remain the sole distributor, PACE, which will concentrate its marketing efforts initially in Japan, has to sell roughly $2.5 million worth of HydroMaid systems in 1999, $7.2 million in 2000 and $7.7 million each year thereafter. This spring, TOKYO BOEKI LTD. will launch marketing of an innovative distributed power source developed by Torrance, California-based ALLIEDSIGNAL POWER SYSTEMS INC. The 2,000-pound TurboGenerator delivers 75 kilowatts of power. Multiple units can be linked together to produce up to 1 megawatt of electricity. The system can be used for distributed generation, peak-shaving, standby power, off-grid power generation, portable power, cogeneration and uninterruptible power supply. It runs off a number of fuels, including natural gas, diesel fuel, unleaded gasoline and kerosene. The TurboGenerator is said to operate more quietly and to produce fewer vibrations than conventional gas turbines because it has only one moving part in the engine core: a single shaft on which the compressor, turbine and generator are mounted. Tokyo Boeki has exclusive rights to sell, lease, distribute and service the 75-kW TurboGenerator, which will cost between $53,100 and $88,500.

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

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Two of the biggest North American forest products companies — Atlanta's GEORGIA-PACIFIC CORP. and Vancouver, British Columbia- headquartered CANFOR CORP. — have decided to join forces in the tough Japanese market to build sales of market pulp and other pulp and paper products. Both companies have had local marketing offices for years. Through equally owned CANFOR/GEORGIA-PACIFIC JAPAN CORP., which will be formed in April, each firm will continue to market and sell products under its own brand names while gaining the efficiencies of a joint operation.

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

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In its largest single order ever, WATERS CORP. has won an $8 million contract from the National Police Agency for liquid chromatography/mass spectrometry systems. Forensic scientists at police laboratories across Japan will use this equipment to analyze the aftermath of poisonings, bombings and other crimes for residual trace chemicals. The Milford, Massachusetts company's subsidiary is working with NPA to train and support the scientists who will be operating the instruments, which will be delivered during 1999.

Continuing to make inroads in the market for computer-based testing and simulation equipment used by the automotive industry, MTS SYSTEMS CORP. has a $2.5 million order from a manufacturer of vehicle seats for a new crash simulation system. The cutting-edge simulation technology incorporated in the Eden Prairie, Minnesota company's product provides major improvements in the test setup and in the fidelity of reproducing crash pulses. It also minimizes the number of times the test must be run.

The world leader in solid imaging, 3D SYSTEMS CORP. of Valencia, California, has signed a patent cross-licensing agreement with NTT DATA CORP. and one of its majority-owned subsidiaries. Under it, NTT Data and its NTT DATA CMET CORP. unit have nonexclusive rights to produce and sell stereolithography systems in the Asian Pacific, while 3D Systems gained nonexclusive, worldwide rights to their stereolithography system know-how. 3D Systems and SONY CORP. have a similar arrangement. ASAHI DENKA KOGYO K.K., an investor in NTT Data Cmet and the supplier of stereolithographic systems to it, has a patented epoxy resin used to fabricate solid objects that apparently is of interest to 3D Systems. NTT Data acquired a 77.5 percent stake in what become NTT Data Cmet from MI- TSUBISHI CORP., which formed the company in 1990.

The first products to emerge from the early 1998 development tie-up between LECROY CORP., a manufacturer of electronic test instruments, and telecommunications equipment maker IWATSU ELECTRIC CO., LTD. (see Japan-U.S. Business Report No. 342, March 1998, p. 18) are four additions to the Chestnut Ridge, New York firm's Waverunner series of digital oscilloscopes. The new models, all of which offer 500 MHz of bandwidth, include the two-channel LT342 and the four-channel LT344L. The former costs $8,400 in Japan, while the latter is priced at $17,500. The partners hope to sell 2,000 of the new Waverunner models in Japan in the first year and 5,000 units elsewhere.

SONY TEKTRONIX CORP. has introduced a line of low-cost oscilloscopes from Wilsonville, Oregon-based TEKTRONIX, INC. that incorporates the advantages of both analog and digital technology. The products' analog function allows users to monitor waveforms in real time, with digital analysis and storage of the signal information. The six models in the series range in price from $3,500 to $13,200. Sony Tektronix is looking for combined sales in the first year of 6,000 units.

For power measurements in the 50-gigahertz to 75-GHz frequency range, HEWLETT-PACKARD JAPAN LTD. is marketing the HP V8486A V-band power sensor. The product, which works with various HEWLETT-PACKARD CO. power meters, has a fixed SWR to minimize problems in radio frequency and microwave power measurements caused by a mismatch between the sensor and the source. The power sensor lists for $5,000. HP Japan is projecting annual sales of 60 units.

Working through a Tokyo distributor, OPOTEK INC. of Carlsbad, California has brought to the research laboratory market a compact, tunable laser system featuring its patented optical parametric oscillator technology. The VIBRANT system consists of a Nd:YAG (neodymium:yttrium-argon- germanium) laser and the OPO. Tuning ranges extend from 210 nanometers to 2.2 micron, with output energies up to 100 millijoules. The 40 percent conversion efficiency of energy from the pump laser to the OPO boosts the performance of the laser. Primary applications for the VIBRANT system include photobiology, photochemistry, medical diagnostics, remote sensing and combustion research.

DCH TECHNOLOGY, INC. has signed up a strong partner to market its line of sensors for gas detection and safety monitoring systems in Japan and elsewhere in Asia. HORIBA, LTD. is one of the world's top makers of analytical and measurement equipment and is especially big in emissions testing. It will distribute DCH's robust hydrogen sensor, thick-film hydrogen sensor, fiber-optic sensor and universal gas sensor. The Valencia, California company believes that the deal with Horiba could produce more than $1 million in annual sales.

A company has been formed in Yokohama to take over distribution and servicing of SELA USA INC.'s SEM (scanning electron microscope) and TEM (transmission electron microscope) sample preparation systems for the semiconductor industry. SELASTAR CORP. replaces INNOTECH CORP. Santa Clara, California-based SELA pioneered microcleaving technology for cross-section preparation, which supports applications in failure analysis, process monitoring and R&D. Marking the latest chapter in their 20-year relationship (see Japan-U.S. Business Report No. 351, December 1998, p. 7), FERROFLUIDICS CORP. has transferred responsibility for sales and support of its vacuum seal components in Asia from its Tokyo subsidiary to FERROTEC CORP. This business is worth an estimated $885,000 a year. Nashua, New Hampshire- based Ferrofluidics will continue to handle sales of these products in the United States and Europe, though.

X-RITE, INC. has opened an office in Tokyo to backstop sales of its color quality control instruments and software. The Grandville, Michigan company says that a local presence will help it better support its distributors while penetrating major accounts. X-Rite also plans to form a team of technical representatives that will work with dealers. Its products are designed for a wide variety of color applications, including corporate branding, medical diagnostics, consumer products and on-line commerce.

The Ministry of Health and Welfare has approved for sale Troy, Michigan-based SOMANETICS CORP.'s INVOS 4100 Cerebral Oximeter patient monitoring system. The only commercially available system of its kind, it provides doctors with regional brain oxygen information on a continuous, noninvasive basis during surgery and in critical-care situations. The subsidiary of BAXTER INTERNATIONAL INC. has exclusive rights to distribute the INVOS 4100 Cerebral Oximeter patient monitoring system.

The December 1997 acquisition of VISITEC CO. by BECTON DICKINSON AND CO. has led to changes in the distribution of the company's ophthalmic products for eye surgery. These products had been marketed by Osaka's MATSUMOTO MEDICAL INSTRUMENTS, INC. Now, Becton Dickinson's subsidiary is handling VISITEC's products in addition to its own line of products for eye surgery. The VISITEC products are designed for use in cataract, vitreoretinal, oculoplastic, refractive and corneal surgery.

With MHW marketing approval in hand, OCULAR SCIENCES INC. is shipping its daily and weekly disposable contact lenses to eye-care practitioners. The South San Francisco, California manufacturer's contact lenses, which it says are easier to handle and more comfortable to wear than the competition's, are brand-differentiated by private label and channel. Japan is the world's second-largest contact lens market.

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

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In an attempt to boost its sales of DRAMs to $265.5 million in FY 1999 from just a fraction of that amount, MICRON TECHNOLOGY INC. gave KOBE STEEL, LTD. affiliate SHINSHO CORP. the right to market its computer memory chips in the huge Japanese market. The companies are no strangers. When the Boise, Idaho chipmaker bought TEXAS INSTRUMENTS INC.'s DRAM business last year, it also acquired TI's 25 percent stake in KTI SEMICONDUCTOR, LTD. (see Japan-U.S. Business Report No. 346, July 1998, pp. 18-19). Kobe Steel is the majority owner of that Nishiwaki, Hyogo prefecture DRAM wafer fabrication facility, all of whose output goes to Micron Technology. This spring, KTI will start to make 64-megabit DRAMs, using the American parent's product and process technologies.

Longtime MIPS TECHNOLOGIES INC. licensees NEC CORP. and TOSHIBA CORP. have signed new agreements covering a faster microprocessor technology than the Mountain View, California company's 64- bit RISC design. The arrangements are for parallel floating-point processors with clock speeds of up to 1 gigahertz. NEC and Toshiba expect to commercialize the new technology in the 2000 to 2001 time frame. MIPS is a SILICON GRAPHICS, INC. company.

Manufacturers of midrange and high-end servers and workstations using four or more processors now have available a 450-MHz version of INTEL CORP.'s Pentium II Xeon. Buyers have a choice of 512 KB, 1 MB or 2 MB of on-board Level 2 cache. Intel calculates that systems using the new processor with 2 MB of L2 cache deliver more than 10 percent greater performance than systems powered by a 400-MHz Pentium II Xeon processor with 1 MB of L2 cache. Intel's subsidiary priced the 450-MHz processor at $890 for 512 KB of L2 cache, $2,100 for 1 MB of L2 cache and $4,000 for 2 MB of L2 cache, all in quantities of 1,000. Japanese hardware vendors releasing four-way and bigger systems based on the 450-MHz Pentium II Xeon processor include FUJI-TSU, LTD., HITACHI, LTD., MITSUBISHI ELECTRIC CORP., NEC CORP. and TOSHIBA CORP.

The first two of what INTEL CORP. says will be many products for low-cost desktop PCs to be released in 1999 are on the market. The 400- MHz Celeron processor yields as much as a 20 percent performance improvement over the Celeron operating at 333 MHz, while the 366-MHz Celeron processor provides up to 10 percent more performance. These two parts, like the 333-MHz and 300A-MHz Celeron versions, have 128 KB of integrated L2 cache on the processor core. To further enhance the performance and the flexibility of low-cost PC systems, Intel's subsidiary simultaneously introduced the 440ZX AGPset. The subsidiaries of direct marketers DELL COMPUTER CORP. and GATEWAY 2000, INC. were the first PC manufacturers to put out products incorporating the new Celeron processors.

Suppliers of notebook computers have several new processor options that can help them lower price points while boosting performance. One is INTEL CORP.'s 300-MHz Pentium processor with MMX technology. Not only is it up to 12 percent faster than the previous top-of-the-line 266-MHz Pentium processor with MMX technology, but the new part enhances multimedia applications. In quantities of 1,000, the 300-MHz processor costs $155 each.

INTEL CORP.'s subsidiary also extended its line of mobile Pentium II processors for the mainstream notebook computer market with the release of 333-MHz and 366-MHz versions of this engine with 256 KB of integrated cache. At the same time, it announced the availability of the first mobile Celeron chips for low-cost notebooks. They run at 266 MHz and 300 MHz. All of these processors deliver better performance at prices that are no higher or even lower than the parts they replaced. EPSON DIRECT CORP., FUJITSU, LTD., HITACHI, LTD., IBM JAPAN LTD., MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., NEC CORP., SONY CORP. and TOSHIBA CORP. all launched new notebook computers powered by the faster processors.

These processors have direct competition in the value-priced notebook market from ADVANCED MICRO DEVICES, INC.'s low-power mobile AMD-K6-2 processor. With a top speed of 333 MHz, the family, which includes parts running at 300 MHz and 266 MHz, offers the highest clock- speed mobile processor. The new line also marks the first appearance of AMD's 3DNow! graphics-accelerating technology in processors for notebook computers. The processors are priced in 1,000-unit lots at $320 (333 MHz), $200 (300 MHz) and $150 (266 MHz). TOSHIBA CORP., the world's leading notebook manufacturer, is the first Japanese maker to chose the successor to the original mobile AMD-K6 line. It is using the 300-MHz mobile AMD-K6-2 in its Japan-only line of 11 DynaBook Satellite 2520 models. ADVANCED MICRO DEVICES, INC. has picked up another customer for its desktop AMD-K6-2 processor with 3DNow! technology. NEC CORP., Japan's top manufacturer of PCs, is using the 333-MHz version of this chip in NEC Mate NX-R Series models targeted at the small and midsized Japanese business market. For the home computing market, NEC has incorporated the 400-MHz and the 333-MHz AMD-K6-2 in the VALUESTAR NX-R Series. AMD's other Japanese customers for this part are FUJITSU, LTD. and TOSHIBA CORP.

American chipmakers reporting recent design wins also include ZORAN CORP. of Santa Clara, California. TOSHIBA CORP. chose its Vaddis DVD decoder chip to power the fourth generation of DVD players that the Japanese company plans to release in the first half of this year. Vaddis brings to DVD players such cutting-edge technologies as high-definition CD, 3D audio, karaoke and audio algorithms like Dolby Digital. Announced at the end of 1997, Vaddis is the result of an 11-year collaboration between Zoran and FUJIFILM MICRODEVICES CO., LTD.

All the hardware and software needed to control a DVD player's back-end decoding or playback functions, including host processing, have been integrated on a single chip. MEDIAMATICS CORP. is the developer of what parent NATIONAL SEMICONDUCTOR CORP. is calling the first DVD-On-A- Chip solution for DVD players. In Japan, National Semi's subsidiary is marketing the Pantera-DVD (NDV8401) for $265 to $355.

Under a nonexclusive license from COMPETITIVE TECHNOLOGIES, INC. of Fairfield, Connecticut, MI-TSUBISHI ELECTRIC CORP. has the right to use laser diode technology known as impurity induced layer disordering. In simplified terms, this technique converts layers of a semiconductor structure into an "alloy" that has important electronic properties. Laser diodes incorporating this technology exhibit enhanced performance and durability, making them ideal for DVD players and other optical storage equipment.

ANALOG DEVICES, INC.'s subsidiary is sampling a low-power, integrated triple 8-bit, 140-megasamples-per-second analog-to-digital converter designed specifically for demanding graphics processing, LCD monitor and projector, plasma display panel and scan-converter applications. The AD9884 graphics digitizer can support display resolutions up to 1280 x 1024 at a refresh rate of 75 Hz. It also has sufficient input bandwidth to accurately acquire and digitize each pixel for crisp image quality. The Norwood, Massachusetts company is launching commercial production of the AD9884 during the first quarter.

The local operation of NATIONAL SEMICONDUCTOR CORP. has combined on a single chip all the functions required for high-resolution color scanning. The low-power LM9830 is said to provide four times the scanning speed of conventional multiple chip parts. It also allows individual pixel resolution settings for better image quality since the horizontal and the vertical resolution range of 50 to 600 dots per inch can be set in increments of one dot per inch. The LM9830 costs $10.60 per chip in quantities of 1,000 units.

For about $42 per chipset, NATIONAL SEMICONDUCTOR CORP.'s subsidiary is offering three parts that perform the transceiver function in synchronous digital hierarchy systems at a data rate of 155 megabits per second. The cost-effective, space-saving chipset consists of the CLC005 cable driver, the CLC012 cable equalizer and the CLC016 data retiming phased locked loop. It is designed for such SDH interfaces as those found in add-drop multiplexers, digital cross-connects, SDH repeaters and digital cellular base stations.

If HEWLETT-PACKARD JAPAN LTD.'s projection is right, it will sell about 100,000 units a year of a pair of optical transceiver modules. The HFBR-5903 and the HFBR-5905, which are priced around $92 a part in small purchase orders, are designed for such telecommunications equipment as 100Base-FX Ethernet and ATM (asynchronous transfer mode) systems.

An unnamed company described only as a major semiconductor maker will soon take delivery of a Tegal 6500 Series etcher from TEGAL CORP. The Petaluma, California firm's system will be used to develop and produce nonvolatile ferroelectric RAMs.

Developers of flash memory test programs now have a time- slashing way to do their job. The Personal KALOS from automatic test equipment maker CREDENCE SYSTEMS CORP. allows engineers to develop a test program from their desktops. The finished product then can be automatically transferred to the Fremont, California company's high- throughput, volume production KALOS tester. Depending on the configuration, the Personal KALOS ranges in price from $100,000 to $150,000, although a typical system costs about $132,700. INNOTECH CREDENCE CORP., a business equally by Credence and semiconductor manufacturing equipment distributor INNOTECH CORP., expects to sell 30 Personal KALOS systems a year.

A sixth Japanese company has licensed TESSERA INC.'s Micro BGA (ball-grid array) chip-scale package technology. SHARP CORP. joins HITACHI CABLE CO., LTD., HITACHI, LTD., MITSUI HIGH-TEC, INC., SHINKO ELECTRIC INDUSTRIES CO., LTD. and SONY CORP. The San Jose, California manufacturer's package is only slightly larger than the integrated circuit itself, saving valuable space on increasingly crowded printed wiring boards. The Micro BGA technology is particularly well-suited for memory products, including flash memories, DRAMs and static RAMs.

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

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A joint venture backed by BROADCAST.COM INC. (40 percent), SOFTBANK CORP. (50 percent) and YAHOO! JAPAN CORP. (10 percent) is launching a major Internet streaming service. BROADCAST.COM JAPAN INC., which is expected to begin operations this fall, not only will aggregate and transmit local Japanese audio and video content but also will have access to the Dallas firm's many thousands of hours of English-language programming, including sports events, music CDs and videos. Internet users in Japan also can subscribe to's business information services, which can be delivered over corporate intranets.

SUPERSCAPE INC. of Santa Clara, California has finished constructing a second-generation, interactive, 3D virtual shopping mall for NTT DATA CORP. The new Machiko electronic mall initially hosts 30 client stores organized into eight virtual worlds: Plaza, Park, Elegant, Casual, Lobby Night Club, Beach and Mountain. It has the capacity to handle up to 200 visitors simultaneously, either for shopping or for on-line chat groups. As part of the deal, NTT Data has purchased an unlimited license to customize and distribute Superscape's Viscape 3D Web browser for subscribers to the Machiko service.

Austin, Texas-based GLOBESET, INC. has licensed its electronic commerce transaction software to OKI ELECTRIC INDUSTRY CO., LTD. for use in an on-line shopping experiment. The pilot project, launched in January, is testing the security and the convenience of GlobeSet's ServerWallet and ServerPOS server-based SET (secure electronic transaction) and e-debit payment options as well as examining the interoperability of server-based and conventional SET systems. Also participating in the pilot project is DAI NIPPON PRINTING CO., LTD., which is attempting to integrate its existing e- commerce system with GlobeSet's software. Likewise, FUJI BANK, LTD. and CREDIT SAISON CO., LTD. are working to interface their payment systems. GlobeSet tied up with Oki Electric last fall (see Japan-U.S. Business Report No. 349, October 1998, p.22). The pilot project is being conducted in conjunction with the Japan Information Processing Development Center, a Ministry of International Trade and Industry organization.

Also dipping their toes into the potentially huge market for e- commerce software are UNISYS CORP.'s subsidiary and HITACHI, LTD. The Unisys unit initially will bundle with its hardware e-commerce software from Hitachi that is compliant with the CORBA (common object request broker architecture) standard. Sales of these systems could start as soon as April. In time, the partners plan to codevelop new software, especially for electronic financial transactions.

An industrial-strength Internet e-mail server from SUN MICROSYSTEMS, INC. has the lowest total cost of ownership, boasts the company. Besides being fully localized, Sun Internet Mail Server 3.5 is offered in a departmental version for $2,400 or as an enterprise package at a cost of $5,600.

A client e-mail package from Menlo Park, California-based BEATWARE, INC. will be bundled with HITACHI, LTD.'s FLORA Prius line of desktop PCs. This line has Japanese-language versions of the Windows 98 operating system and BE, INC.'s BeOS preinstalled. BeatWare's Mail-It package is the number-one e-mail client software for BeOS.

RSA DATA SECURITY, INC. has released two new versions of its encryption engine designed specifically for Internet and e-commerce applications. BSAFE SSL-C is the San Mateo, California firm's first protocol- level toolkit for the worldwide Internet market, harnessing its strong encryption know-how to the Secure Sockets Layer Internet standard. Similarly, BSAFE S/MIME-C allows software writers to make RSA's encryption technology native to the Secure Multipurpose Internet Mail Extensions standard. Both technologies are available only on an OEM basis, with license fees starting at $22,100.

Shipments have started of a new version of INTERNATIONAL BUSINESS MACHINES CORP.'s popular WebSphere Web-site development tools. WebSphere Studio for Windows 95/98 handles the development and the creation of a Web site from start to finish, with tools for programmers, artists and content authors. IBM JAPAN LTD. has priced a one-server license at $700, with additional licenses adding $650 each to the bill.

The local operation of SUN MICROSYSTEMS, INC. has begun tailoring the new version of the Java language to easily handle Japanese in cooperation with 15 local partners, including FUJITSU, LTD., JUSTSYSTEM CORP. and IBM JAPAN LTD. Sun hopes to begin shipping a fully localized Java 2 by midyear. More than 150 local software developers already have said that they will support the new version, which should make development of Japanese applications much simpler.

In the meantime, SUN MICROSYSTEMS, INC.'s subsidiary has released a Java application environment aimed at consumer devices for home, office and mobile use. PersonalJava includes a Java Virtual Machine, core application programming interfaces and libraries, and APIs unique to consumer applications, all written with the resource limitations of consumer devices in mind. Clearly courting Japan's industry-leading consumer electronics makers, Sun introduced released PersonalJava in Japan before its global launch.

In a related move, SUN MICROSYSTEMS, INC. has launched its Jini connection technology in Japan. This technology promises to allow users to connect any consumer or business device to any network from any location. Japan's prominence in consumer and business electronics products again puts it at the heart of Sun's strategy for Jini. The company already has signed up at least seven firms to build products incorporating Jini. They are: CANON INC., FUNAI ELECTRIC CO., LTD., OKI ELECTRIC INDUSTRY CO., LTD., SEIKO EPSON CORP., SHARP CORP., SONY CORP. and TOSHIBA CORP.

A less ambitious alternative to the PersonalJava and Jini standards has been chosen by TOSHIBA ENGINEERING CORP. to link, control and manage small consumer and business devices. It will promote the use of Naperville, Illinois-based SPYGLASS INC.'s Device Mosaic thin-client Web browser and MicroServer small-footprint Web server in a wide range of appliances, such as televisions, TV set-top converters, videophones and handheld devices. The two programs require only a small amount of memory, even though they offer a full-featured graphical-user interface and other refinements found in much larger programs. That combination appealed to Toshiba Engineering.

In a bid to prevent defections prior to the availability of the much-delayed Windows 2000 family of operating systems, MICROSOFT CORP.'s Japanese arm is offering customers an incentive to stick with the Windows NT Server network operating system. Firms that purchase Windows NT Server 4.0 before June 30 will get a free upgrade to Windows 2000 Server when it ships.

At the other end of the operating system spectrum, MICROSOFT CORP. has won a commitment from TOSHIBA INFORMATION SYSTEMS CORP. to use Windows CE in a full line of consumer electronics devices, including digital electronic products, car navigation systems, mobile phones, point-of-sale units and information appliances. In addition, the TOSHIBA CORP. software development unit, which until now has generally customized operating systems for specific products, will market Windows CE for Microsoft — a first for a local firm.

IBM JAPAN LTD. is offering to help corporate customers avoid problems associated with the coming of the Year 2000. Engineers will inspect a client's PCs for potential Y2K problems, plan preventive steps and support installation of new hardware and software as needed. Although the final cost will vary according to each customer's computing assets and architecture, IBM Japan calculates that the service should cost an average of $175 per computer.

Arcadia, California-based CCD ONLINE SYSTEMS, INC. has brought its Y2K computer code renovation software to Japan with the help of distributors COMPUTER SOFTWARE DEVELOPMENT CO., LTD. and CINCOM SYSTEMS (JAPAN) LTD. CCD's Beyond 1999 code renovation package and Beyond 1999/Validate Y2K-fix verification tool have strong track records in the United States. CCD will set up a subsidiary to handle the actual recoding and validation processes, with fees expected to be in the range of 9 cents to 18 cents per line of code inspected. Customers in Japan are enjoying a growing pool of choices in the applications development area. Farmington Hills, Michigan-based COMPUWARE CORP., for example, emphasizes the benefits of the modular approach to developing strategic business applications offered by its UNIFACE package. By applying a component architecture to the development, deployment and delivery of applications, designing and implementing new programs and updates are greatly simplified. Compuware's subsidiary also offers the Rational Rose object-oriented front-end modeling tool for UNIFACE. Developed by RATIONAL SOFTWARE CORP. of Santa Clara, California, Rational Rose (and the Rose UNIFACE Link utility) lets programmers use visual modeling techniques to analyze business needs, design objects, construct components and assemble applications.

In head-to-head competition, PROGRESS SOFTWARE CORP.'s local arm signed a distribution agreement with KOMATSU SOFT LTD. covering the Bedford, Massachusetts firm's self-named family of component-based, visual development environments. Progress creates multitiered, enterprise- class applications, while Progress WebSpeed makes existing and new business software Internet-friendly. Komatsu Soft expects Progress' Universal Application Architecture to appeal to customers because it allows programs to run on any type of user interface and on any server with any type of data base. Progress' subsidiary was established at the beginning of 1995 by the U.S. company, NISSHO IWAI CORP. and INES CORP.

Hoping to capitalize on the popularity of the Linux open-source operating system among researchers and engineers, NATIONAL INSTRUMENTS CORP.'s subsidiary has released a Linux version of its LabVIEW measurement and automation application development environment. LabVIEW 5.01 for Linux/x86 has all the features that make the development environment popular in the academic world: an intuitive GUI, compiled source code, true multitasking, serial input/output, support for TCP/IP and virtual memory. In addition, the Austin, Texas firm has assembled numerous general Linux data-acquisition and process-control drivers and libraries for many of its general-purpose interface bus and data-acquisition modules. While the Linux OS is available free or at minimal cost, LabVIEW for Linux retails at $2,800 a copy.


An even more specialized software development tool is being offered by INSTALL SHIELD SOFTWARE CORP. The Schaumburg, Illinois firm's self-named product eases the task of distributing and installing software in corporations with large numbers of computers. InstallShield 5.5 Professional makes it easy for network administrators to create powerful and reliable automatic installation scripts for Windows environments. Available from distributor NETSERVE INC., sales of the $160 development tool are expected to hit 5,000 units a year.

To keep ahead of a growing field of competitors, SILVERSTREAM SOFTWARE, INC. has thoroughly overhauled its SilverStream Application Server. Version 2.0 not only adds a host of network/server/client management tools, but also tightens the integration between its server and client development environments. An integrated, visual development environment hides the coding of Java and complex Web technologies while providing a full range of sophisticated Web elements based on Internet standards. The server environment uses object-oriented programming concepts to bring client-side HTML and Java, solid security, full-option management and unlimited data connectivity to scalable, enterprise-class networks. SilverStream 2.0 is available through NICHIMEN DATA SYSTEMS CORP. at prices ranging from $4,000 for a basic developer package to $15,900 for an unlimited Web server license.

BEA SYSTEMS, INC. and OKI ELECTRIC INDUSTRY CO., LTD. have agreed to deepen their cooperation in the middleware market. Now the San Jose, California firm's master distributor, Oki Electric will recruit new distributors and partners for BEA's Tuxedo middleware. With the demand for on-line transaction processing skyrocketing, Oki Electric has successfully marketed Tuxedo as part of its systems integration solutions to firms linking legacy and new computing resources. It plans to increase its systems integration staff to 100 to support the closer ties with BEA. Oki Electric was the first Japanese Tuxedo licensee. Last year, it formed the OLTP Competence Center with HEWLETT-PACKARD JAPAN LTD. to promote Tuxedo-based OLTP solutions.

WRQ, INC. continues to localize its full line of middleware products for the Japanese market. The Seattle developer put out its Reflection X software for Windows NT/Unix shops last year (see Japan-U.S. Business Report No. 349, October 1998, p. 22). It now is offering another product targeted at the same group. Reflection for Unix and Digital allows PCs running under any Windows operating system to emulate a VT102, VT220, VT320 or VT420 terminal, giving them full access to Unix and Digital host computers. The middleware is available individually shrink-wrapped for $450 or in multiple units via a negotiable license.

To counter stiffer competitive challenges, Atlanta's INTERNET SECURITY SYSTEMS, INC. has morphed its monolithic RealSecure product into a family of modules, allowing customers to buy only what they need. With prices starting at $15,000, the RealSecure 3.0 family includes the RealSecure Network Engine firewall, the RealSecure System Alert monitor, the RealSecure Management Console and the RealSecure Manager for HP OpenView. The new system monitor watches network operating system log files for suspicious activity, while the management tool offers policy-based controls and agents.

A new version of ABIRNET, LTD.'s Internet/intranet security monitoring package is on the market through the Dallas company's distributor, FORVAL CREATIVE, INC. For $3,000 for a 25-user license, SessionWall-3 Release 3 watches all aspects of network activity, including logs, alerts, displays and document content. It can unobtrusively block information that violates administrator-determined rules.

In a major win, NETWORK ASSOCIATES, INC. has convinced NEC CORP. to deploy its CyberCop Scanner network-vulnerability detector throughout the electronics manufacturer's distributed computing environment. Already used by about 50 companies in Japan, CyberCop Scanner continually tests and probes NEC's 80,000 communications nodes, looking for more than 500 different weaknesses. The package automatically flags any problems for network administrators and produces 3D graphs to help identify patterns and "big-picture" problems. CyberCop Scanner's per- person cost runs about $40 for networks of 1,000 users.

A competing network security analyzer is available from the subsidiary of INTERNET SECURITY SYSTEMS, INC. Internet Scanner 5.6 adds more than 85 new methods for detecting network vulnerabilities and the horsepower to watch over globe-spanning corporate networks. ISS's SmartScan technology uses artificial intelligence to learn about a network and to devise new tests and responses to potential intruders.

Taking a more hands-on approach to detecting network vulnerabilities, CROSSBAR SECURITY, INC. of New York City and Tokyo's INTERNATIONAL NETWORK SECURITY CO., LTD. have teamed up to offer a network security testing service to Japanese clients. The two will simulate attacks on a corporation's network just like real hackers, then propose remedies. Crossbar Security and INS also will offer employee training and seminars on network security. The basic service costs about $90 and up per PC.

To hasten the adoption of the next generation of network security protocols, SECOM CO., LTD. is staging training courses across Japan for both providers and customers based on material developed by partner ENTRUST TECHNOLOGIES INC. about the requirements, operations and benefits of public-key infrastructures. PKIs provide a high level of security to com-panies. They stop unauthorized access to networks and to customers by preventing theft or eavesdropping on electronic transactions. For now, a PKI Consultant Certificate is available, but plans are underway to add Administration and Technical courses this year. At the end of 1998, Richardson, Texas-based Entrust Technologies formed a subsidiary with a group of 16 companies spearheaded by Secom (see Japan-U.S. Business Report No. 352, January 1999, p. 21).

A new version of COMPUWARE CORP.'s network application analysis tool is available from the Farmington Hills, Michigan firm's subsidiary. EcoSCOPE 3.7 can evaluate the performance of large, fully switched networks, then produce reports on application service levels. The $29,800 network utility also interfaces closely with TIVOLI SYSTEMS INC.'s network management software.

Also releasing an update of a staple product is SEAGATE SOFTWARE, INC.'s subsidiary. Backup Exec for Windows NT v7.2J works with Windows NT 4.0 to provide transparent protection of all network data. Pricing begins at $1,200 for a single server license and tops out at $2,500 for an unlimited license. An add-on for systems employing RAID mass storage and tape drives also is available.

A new version of NOVELL, INC.'s data replication server is available from its local operation. Novell Replication Services 1.21 constantly updates and synchronizes all corporate data resources, ensuring that only the most recent and correct data are available throughout the corporate computing environment. The package works with hardwired LANs as well as with WANs using wireless and intermittent links. In the United States, NRS 1.21 costs about $1,000 per server. For its part, ORACLE CORP.'s local arm has put on the market a new version of its popular on-line analytical processing software, Oracle OLAP Server r6.2. The multidimensional data base incorporates new, "smarter" search and analysis technology to improve users' ability to mine corporate data sources. Oracle OLAP Server r6.2 for Windows NT systems retails for $10,600, while the one for Unix machines costs $11,200.

As it has in the United States, MICROSOFT CORP. has challenged relational data base heavyweights in the Japanese market by releasing a localized version of SQL Server 7.0. Microsoft claims that its latest data base server has enough horsepower, scalability and reliability to take on perennial leaders ORACLE CORP. and INTERNATIONAL BUSINESS MACHINES CORP. A basic SQL Server 7.0 setup costs $2,300, while the enterprise edition is tagged at $13,000, both significantly lower than the competition's pricing.

SYBASE, INC. has freshened its relational data base server and client software for mobile applications. Adaptive Server Anywhere 6.0 and SQL Anywhere Studio, which bundles the server with client tools for $780, are feature-rich yet memory stingy. The server software is designed to automatically handle intermittent connections by mobile users, while the client tools give field agents sophisticated access to central data repositories.

Attracted by the accelerating momentum behind the Linux operating system, ORACLE CORP. has announced that it will port its data base management software to the newest operating system on the block. Oracle8 Workgroup Server, Linux v8.05, will start at $1,900. The company's subsidiary expect sales of 10,000 licenses in the first year. Oracle sees Linux taking 10 percent to 20 percent of the departmental server market in Japan, and it has begun porting some of its other products, including an enterprise resource planning package, to the open-source variant of Unix.

A partnership between NCR CORP.'s unit and DELOITTE TOHMATSU CONSULTING CO. is devising an ERP package for local customers. Set for release by the end of March, the system will collect and digest a company's daily financial, production and inventory data, allowing executives to extract consolidated management information in near real time. The partners also claim that their package will be the first product in Japan to handle overseas subsidiaries that may operate under different accounting rules. At the heart of the system is NCR's RAPID management information system, which takes advantage of the company's Teradata large-capacity data warehouse.

Responding to customer complaints about the cost and the time that it takes to install an ERP system, UNISYS CORP.'s local operation has developed a system that not only can be deployed in as little as half the normal time (five months versus 10 months) but that also integrates both ERP and supply chain management functions. The system combines ORACLE CORP.'s Oracle Applications R11, Tokyo-based DIVA CORP.'s DivaSystem consolidated accounting package, Beaverton, Oregon-based ABC TECHNOLOGIES INC.'s Oros99 activity-based costing and management package and the Mercator enterprise application integration software from TSI INTERNATIONAL SOFTWARE LTD. of Wilton, Connecticut. Unisys hopes that the combined ERP/SCM bundle will drive up its revenues in this area to $88.5 million in FY 1999.

Meanwhile, UNISYS CORP.'s subsidiary is offering a tool that will speed up installation of the financial module of ORACLE CORP.'s Oracle Applications R11 ERP system. FaSet Financials — short for fast setup — allows installation of the complicated Oracle system in one-half to one-third the usual time. Unisys charges $53,100 for a FaSet Financials license for up to 10 clients. It also has developed FaSetHR to accelerate deployment of the human resources management part of the Oracle system. Unisys hopes to sell 20 FaSet products.

In a coup for Morrisville, North Carolina-based ENGINEOUS SOFTWARE, INC., its subsidiary has received a contract from the Science and Technology Agency's National Aerospace Laboratory to install the iSIGHT manufacturing execution software at NAL's supercomputer facility. The package blends optimization, automation and integration technologies (see Japan-U.S. Business Report No. 342, March 1998, p. 21) that NAL hopes will boost the efficiency of its supercomputer simulation projects.

PARAMETRIC TECHNOLOGY CORP. is offering through its subsidiary a new version of its product and process life-cycle management system, Windchill r2.0. The highlight of the update are workflow capabilities that are entirely Web-based and tightly integrated with core Windchill services and applications. The package lets discrete and process manufacturers manage all phases of a product's life cycle from concept to production, service, maintenance and retirement. The base price for Windchill r2.0 is $1,900 per user.


MATRIXONE, INC. has teamed up with Yokohama's ZUKEN INC. to penetrate the market for product data management software. By closely integrating the Chelmsford, Massachusetts firm's Matrix v6 PDM software with Zuken's DS-1 product information data base, the two hope the bundle's full features and rapid deployment will win customers. Zuken has set up an Enterprise Product Management team of 30 people to support the effort as well as future joint PDM-tool develop-ment work with MatrixOne. The partners are aiming to generate $4.4 million in PDM-related sales the first year.

Interestingly, ZUKEN INC. also recently signed a pact with INFORMATIVE GRAPHICS CORP. to localize and sell in Japan the Phoenix, Arizona firm's Myriad PDM package. Myriad views, redlines and plots more than 1,000 CAD, raster, word-processing, data base and spreadsheet formats. It also performs point-to-point measuring, batch printing and clip- board exports. Zuken also has a similar deal with WORKGROUP TECHNOLOGY CORP. of Lexington, Massachusetts to localize and distribute its CSM family of PDM software.

The subsidiary of REMEDY CORP. is making a major assault on the market for front-office applications, armed with version 4.0 of its Mountain View, California-based parent's Action Request information system. In cooperation with 300 current users and other companies, Remedy has begun tailoring the product for such applications as customer tracking and query response. It also is localizing Action Request to handle Japanese. Remedy's local operation now has 40 people on staff, up from 10 initially. It also is boosting the number of sales channels and systems integrators used.

Aiming for some of the same customer pie, PRISM SOLUTIONS, INC. has given distribution rights for its customer relations management software to the Japanese unit of UNISYS CORP. The Sunnyvale, California firm's CRMS 21 handles the preparation and the loading of customer data into the corporate data warehouse, performs marketing and profitability analysis at the back-end and supports on-line customer interactions at the front-end. Prism Solutions also has developed a package for financial institutions — a product that Unisys hopes will help it sell as many as 30 of the front-office systems. Pricing of that package starts at $26,500.

A specially modified version of LOTUS DEVELOPMENT CORP.'s Lotus 1-2-3 spreadsheet has won the approval of the Ministry of Finance's National Tax Administration Agency as an acceptable format for submitting corporate accounts. The Lotus 1-2-3 Account bundles include all relevant tax code information and forms to generate electronic financial reports for submission to the government. The NTAA approval is seen as another step toward full electronic tax filing in Japan.

In step with the proliferation of digital cameras and camcorders, MICROSOFT CORP.'s subsidiary has released a digital image editing package aimed at the home market. Microsoft Graphics Studio Picture It! 99 is priced at only $69 but allows users to capture digital images from almost any source, then crop, cut, rotate, flip, combine and retouch them. Users can affix digital stamps, impose special affects or add text to the images, then upload them to a Web page. They also can use any of the program's 400 templates to create cards, calendars and posters.

For people with more serious multimedia needs, ADOBE SYSTEMS, INC. has bundled together six of its top-rated graphics and image-editing programs and priced them at a discount. Included in the Adobe Publishing Collection are Photoshop 5.0, Illustrator 8.0, Pagemaker 6.5J, Dimensions 3.0J, Acrobat 3.0J and Streamline 4.0J. Purchased separately, these industrial-strength software tools would cost more than $4,600, but as a bundle, they will only set the buyer back $1,800.

In a bit of a twist on the usual cops-and-robbers game theme, Police Quest SWAT-2 from SIERRA ON-LINE, INC. allows players to take the role of either the good guys or the bad guys. The Bellevue, Washington firm's shoot'em-up game has more than 30 scenarios and the ability to link up to four players for head-to-head network mayhem. The under $90 game for Windows 95/98 machines is available through CYBERFRONT CORP. of Tokyo, which sees sales reaching 20,000 a year.

With multigigabyte hard drives now the standard even on low-end PCs, SYMANTEC CORP.'s subsidiary will release in March a localized version of its Norton Ghost 5.1 disk-cloning utility. The software quickly — up to 700 MB in 15 minutes — creates mirror images of a hard disk on another hard drive or other mass storage media. It can be used for backing up data or for setting up new client computers over a network. A single PC version is priced at $160, while multiple user licenses top out at a 24-seat package for $1,800. Symantec expects the new utility to generate revenues of $4 million the first year. .....Separately, the local operation of SYMANTEC CORP. has released a new version of its popular Norton CrashGuard disk utility. The $40 or so 4.0 version analyzes hard disk performance and health, looking for possible problems. It also creates special files to help users recover from a system freeze or a crash.

Bolstering its attack on the low-end CAD market, AUTODESK, INC.'s subsidiary has released Genius LT 98, a mechanical design front-end that works with the San Rafael, California firm's AutoCAD LT software. Genius LT 98 simplifies many tasks, including generating parts lists from drawings and incorporating any of more than 100,000 standard components. Drawing aids, such as context-sensitive menus and tools, also speed the creation of two-dimensional drawings. The retail price of Genius LT 98 is a relatively modest $575; the academic price of $265 makes it a particularly attractive option for this market.

SOLIDWORKS CORP. and longtime partner KUBOTA SOLID TECHNOLOGY CORP. have restructured their relationship to improve service and efficiency. The two formed a joint venture in which the Concord, Massachusetts 3D CAD software developer has a 60 percent interest to service and support the growing number of SolidWorks customers in Japan. KUSCO transferred 10 people to the new company and will refocus its own business on developing CAD solutions for customers. SolidWorks, meanwhile, will concentrate on helping customers get the most out of the software. KUSCO, a wholly owned subsidiary of KUBOTA CORP., is an investor in SolidWorks. It gained exclusive Japanese distribution rights to the company's CAD software at the end of 1995.

In a similar vein, CADAM SYSTEMS CO., LTD., which INTERNATIONAL BUSINESS MACHINES CORP. and KAWASAKI HEAVY INDUSTRIES, LTD. formed in 1984, has set up a team to provide direct support to users of its CAD programs. The initial staff of 20 will begin calling and visiting customers to discover and address their issues. CADAM did $112.4 million worth of business in FY 1997.

Addressing the complex needs of IC designers, MOSCAPE, INC. has forged a multiyear strategic partnership with SEIKO INSTRUMENTS, INC. The two will market, sell and support the San Jose, California firm's MosCirc assertion-based static analysis tool. This product identifies noise, circuit integrity and performance problems early in the design of deep-submicron ICs. Making fixes at this point in the process is comparatively cheaper. MosCirc pricing starts at $115,000. The partners have a sales goal of 10 units in the first year.

EDA tool developer ULTIMA INTERCONNECT TECHNOLOGY, INC. announced that its Millennium cell and interconnect delay calculator software was chosen by SANYO ELECTRIC CO., LTD. for use in its deep-submicron chip design process. Millennium verifies full-chip timing designs during pre- and post-layout phases of the process, saving time and subsequent problems. Officials of Sunnyvale, California Ultima credit the experienced sales and technical team assembled by its Yokohama distributor, DESIGN SOLUTIONS, INC., for the important contract win.

To give their respective EDA packages a joint boost, CADENCE DESIGN SYSTEMS, INC. and ZU-KEN INC. have signed a multiyear marketing pact. Under it, the Yokohama company, a big developer of CAD software for printed circuit boards, will integrate and sell Cadence's SPECCTRAQuest interconnect designer software and other products in the SPECCTRA PCB design tool family with its own high-end CR-5000 PCB design tools. The two have agreed to focus their initial efforts on customers that design mixed- signal consumer-oriented products. Zuken will purchase SPECCTRAQuest and other Cadence products from INNOTECH CORP., the exclusive distributor of the EDA software industry leader's line.

Leveraging the groupware focus of its popular Notes/Domino family of software, LOTUS DEVELOPMENT CORP.'s subsidiary has rolled out the latest version of Lotus Learning Space for the Japanese education market. Version 2.5 enhances the ability of teachers to plan course work and to create groupware-type learning labs and work assignments. At just $11.15 per seat, the update compares very favorably in price with the previous 2.0 edition, which cost $6,300 per server.

Santa Clara, California-based SOFTLINK, INC. has licensed its audio compression know-how to NIC LTD., a developer of software and content for educational, architectural, construction and manufacturing markets. NIC's first deployments of Softlink's technology will be its Graphic Manager multimedia data base and a voice-enabled multimedia e-mail suite. The Japanese company hopes that this enhanced product will become a corporate communications standard among its customers, which include HONDA MOTOR CO., LTD., contractors SHIMIZU CORP. and KAJIMA CORP., and Tokyo University.

Dallas-headquartered SELSIUS SYSTEMS, INC. — which CISCO SYSTEMS, INC. acquired last October — is offering its Internet telephony technology through NTT INTERNATIONAL CORP. Selsius-Phone, Selsius- CallManager and Selsius-Access allow voice calls to be made over the Internet by creating a virtual PBX (private branch exchange) and interfacing it with the publicly switched telephone network. With prices starting at just $3,500, NTT International expects to sell up to $8.8 million worth of the localized Selsius software the first year.

In the wake of SYMANTEC CORP.'s buyout of QUARTERDECK CORP. last November, Symantec's subsidiary has announced that it will absorb its local Quarterdeck counterpart. Like its parent, the merged unit will pursue sales of utility and communications software for networked PCs. MARUBENI CORP. will continue to serve as the exclusive distributor of Quarterdeck's legacy products, including the CleanSweep uninstaller program.

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

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The Ministry of Posts and Telecommunications has given PRIMUS TELECOMMUNICATIONS GROUP, INC.'s subsidiary the go-ahead to build, own and operate its own communications facilities (see Japan-U.S. Business Report No. 346, July 1998, p. 27). With the big reduction in operating costs that a Type I license allows, the McLean, Virginia global facilities-based carrier can move ahead with plans to sign up residential customers as well as to develop more business and wholesale accounts. PRIMUS already has an international gateway switch operating in Tokyo. Via capacity the company owns on the TPC-5 transpacific fiber-optic cable, this switch is connected to a PRIMUS switch in Los Angeles. PACIFIC GATEWAY EXCHANGE, INC. and MCI WORLDCOM, INC. are the other American carriers with Type I licenses (see Japan-U.S. Business Report No. 351, December 1998, p. 26, and No. 341, February 1998, p. 23).

A high-speed, end-to-end network capable of delivering a wide range of broadband data and information services to businesses will be rolled out starting in May in Tokyo and Osaka. The system's developer is KDD WINSTAR CORP., a company that New York City-based WINSTAR COMMUNICATIONS, INC. (35 percent) formed with KDD CORP. (55 percent) and SUMITOMO CORP. (10 percent). The joint venture is drawing on WinStar's experience in providing high-speed local access to companies in more than 30 American markets over its own fixed wireless network. MPT already has granted KDD WinStar a fixed wireless access radio license for an initial spectrum grant in the 38-GHz band. It covers 42 million points of presence, including in Tokyo and Osaka. This reportedly marks the first time that MPT has awarded high-frequency spectrum. The ministry also gave KDD WinStar a Type I common carrier license. By its third year of operation, the new company expects to generate revenues of $8.8 million from Internet service providers and other businesses with high-speed data transmission requirements.

Atlanta's EQUANT, which provides international data network services to multinationals, will launch Internet Protocol voice and data services in Japan. Its IP@EQUANT integrates the corporate WAN and LAN into a virtual private network. Before the start of the new operation, the company will upgrade its branch office, which serves roughly 70 businesses, into a subsidiary. That is scheduled to occur at midyear. EQUANT claims to operate the world's largest commercial data network in terms of geographic reach, thanks to its use of the SITA network established by major airlines around the world to serve their communications needs.

A development effort among LUCENT TECHNOLOGIES INC., IBM JAPAN LTD. and DENSO CORP. has yielded a relatively inexpensive corporate communications system based on Japan's low-power cellular personal handyphone system standard. The scalable wireless system gives each employee mobile phone capability, whether he or she is in the office or out in the field. Data transmission at a throughput of 32 kilobits per second also is possible. Denso is providing the PHS handsets and base stations, while Lucent is in charge of the PBX gear that connects the in-office system to the publicly switched network. IBM Japan designed the customized software and will offer network technical support.

In its biggest break since forming a subsidiary last spring (see Japan-U.S. Business Report No. 345, June 1998, pp. 21-22), EXCEL SWITCHING CORP. has a tentative agreement with the systems integration unit of KDD CORP. to market its ONE Architecture Expandable Switching System platform. Equally important, KDD NETWORK SYSTEMS CORP. intends to use the EXS solution to provide tandem switching and enhanced services for its parent and other communications services providers. The Hyannis, Massachusetts manufacturer's open, scalable, carrier-class switches allow carriers to integrate network routing, enhanced services and media support on a single switching platform regardless of network signaling requirements.

STANFORD TELECOMMUNICATIONS, INC. signed TOSHIBA CORP. to resell its wireless broadband equipment in Japan and elsewhere in Asia. The Sunnyvale, California company's wireless broadband subscriber units and head-end network interface units support full-featured telephony and data transmission services, including high-speed Internet access. The equipment also provides the core technology for networks supporting local multipoint distribution services. Toshiba will market a wireless broadband system that uses Stanford's DAVIC-standard-based point-to-multipoint access links operating as fast as 42 megabits per second in downstream mode and multiple channels of up to 10.1 Mbps on the upstream side.

"Outa the Box, Onto the Net!" is FREEGATE CORP.'s marketing slogan for the OneGate 150 turnkey Internet access server. Designed for small businesses, the Sunnyvale, California company's product integrates Web server, e-mail, firewall, router, file transfer and remote management functions into a box that can be configured via a Web browser. FreeGate's exclusive distributor, NET ONE SYSTEMS CO., LTD., has priced OneGate 150 from $6,000. It is projecting first-year sales at 2,000 units.

For about $21,200, businesses can eliminate bandwidth bottlenecks with their CISCO SYSTEMS, INC. Series 7000 routers. That money buys FLOWWISE NETWORKS' RA 7000 router accelerator, which, in simplified terms, self-configures itself to take over the routing of local traffic while leaving the Cisco router to handle the WAN traffic. At the heart of the RA 7000 is the San Jose, California company's 4-gigabit-per-second hardware routing engine featuring the Xpressway routing ASIC (application- specific IC) developed in-house. FlowWise named MACNICA, INC. to distribute the RA 7000 router accelerator. DIT. CO., LTD. markets FlowWise's IMS 1600 router accelerator (see Japan-U.S. Business Report No. 347, August 1998, p. 26).

RADGUARD INC., one of the pioneers of the virtual private network market, has refined its Japan market approach in an attempt to boost sales of its dedicated hardware platforms to corporate Japan and the government. The Mahwah, New Jersey supplier named TOYO CORP. to serve as its master distributor. The systems integrator will support Radguard's existing distributors, CHIYODA JOHO KIKO CO., LTD. and TERILOGY CO., LTD., at the same time that it mounts a campaign to sell big business and the government on the cost savings and the enhanced security features of VPN technologies. Toyo will commit $3 million to this effort. Radguard's products are designed for small VPNs as well as the large ones it is targeting.

Start-up CLARINET SYSTEMS, INC. tapped a TOKAI RIKA CO., LTD. affiliate to market its product for connecting portable computers to the corporate network using the machines' built-in infrared port. The San Jose, California company's EthIR LAN is a high-speed IR and 10/100Base-T switching system that gives Windows 95/98 notebooks and Windows CE handheld and palmtop PCs instant LAN links without the use of a PCMCIA (personal computer memory card interface) card. Moreover, EthIR LAN provides each user with a dedicated 4-Mbps connection to the corporate network.

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

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Brand-name marketer CHEROKEE INC. has changed its approach to the Japanese market. Under a long-term agreement, the Van Nuys, California licensor named ITOCHU CORP. as its master licensee. The big trader has the right to manufacture, promote, sell, distribute and sublicense products bearing the Cherokee brand. Cherokee's existing licensees will become part of a group of companies that Itochu will put together to expand the Cherokee name to a broader range of products. The brand currently is licensed for men's casualwear, fashion accessories, luggage and footwear. Additional categories being eyed by Itochu include women's sportswear, kidswear, watches and stationary.

Manhattan's REMINISCENCE LTD., known among teenagers for the retro flair of its clothing and accessories, has granted MITSUBISHI CORP. exclusive rights to license the Reminiscence trademark under a multiyear agreement. LEO CO., LTD., which operates a chain of stores in northern Japan selling jeans and other casual clothing, plans to open Reminiscence stores under an arrangement with Mitsubishi. As part of the deal with the American company, the trader will spend at least $1.6 million to advertise the Reminiscence brand and pay royalties on sales, including a minimum annual amount.

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

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The 30 dealerships that SATURN CORP. has established around the country hope that the company's innovative three-door SC2 coupe will give a much-needed lift to sales. The third door is located on the passenger side of the right-hand-drive car, which retains the same shape and sporty look of the two-door model. Equipped with a 1.9-liter engine and a five-speed transmission, the three-door SC2 coupe has a sticker price of $15,800, or just 3.5 percent more than the standard version.

CHRYSLER JAPAN SALES LTD. has released the 1999 right-hand- drive Jeep Cherokee sport-utility vehicle and the 1999 right-hand-drive Jeep Wrangler. The Sport version of the Cherokee goes for about $25,600, while the Limited model lists for $29,900. For its part, the new Wrangler has a suggested price of between $22,000 and $26,500.

With sales of Big Three-built vehicles still on the skids, manufacturers continue to look for ways to turn the situation around. ForFORD SALES JAPAN LTD., the local marketing arm of FORD MOTOR CO., one response is to open branches in Tokyo, Osaka and Nagoya. Among other jobs, these offices, each staffed by eight to 10 people, will tailor promotional campaigns for their sales territories.

Powertrain parts supplier FEDERAL-MOGUL CORP. has moved its subsidiary into a larger facility at the Technology Village Partnership industrial park in Yokohama. As part of the Southfield, Michigan manufacturer's strategy for providing better support to its Japanese automotive customers, the new offices will house in time a technology center for parts testing as well as R&D capabilities. The site also includes warehouse space to enable a quicker parts delivery response.

The Japan Defense Agency now has four state-of-the-art, 767- based AWACS (airborne warning and control system) aircraft in its fleet. The government ordered the four planes in 1993. Manufacturer BOEING CO. delivered the first two 767 AWACS in March 1998. AWACS aircraft are designed to provide airborne surveillance and command and control functions for tactical and air defense forces.

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

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The Microelectronics Materials Division of CABOT CORP. has inaugurated operations at its chemical mechanical planarization slurry facility in Geino, Mie prefecture (see Japan-U.S. Business Report No. 342, March 1998, p. 27). The plant has the capacity to serve the entire CMP slurry demand of semiconductor makers not only in Japan but also in the rest of the Asian Pacific market. The facility will allow Cabot to improve delivery times and overall product support to its regional customers. They previously had to be supplied from either Cabot's two American plants or a factory in Wales.

Two household names in the personal-care business — JOHNSON & JOHNSON and SHISEIDO CO., LTD., the top manufacturer of cosmetics in Japan — have forged a marketing alliance on skin and hair products. For starters, J&J will develop Shiseido's Super Mild brand of shampoo and conditioner for marketing in the Asian Pacific region outside Japan as Johnson's Super Mild. These products will debut this summer in Australia and the People's Republic of China. For its part, Shiseido will develop J&J's Neutrogena skin-care products for sale in Japan. The line will be marketed by a company that the cosmetics maker set up in February. PRIER CO., LTD. is looking for revenues of $4.4 billion in the first year of marketing, which could start this coming fall. The J&J-Shiseido partnership grew out of a 10-year R&D relationship. Other cooperative marketing deals as well as joint research on hair and skin products could occur in the future, the two companies said.

Competition is stiff in Japan's razor market, but the battle for sales is mainly between a pair of American heavyweights. Late last year, GILLETTE CO., the world's largest maker of razors but the number three in Japan, announced its MACH3 triple-blade shaving system (see Japan-U.S. Business Report No. 351, December 1998, p. 27). Now, local market leader WARNER-LAMBERT CO. has introduced its own new product, the Schick SlimTwin disposable razor. A package of three costs about $2.40.

The Tokyo subsidiary of AMERICAN RECREATION PRODUCTS INC. will take over distribution of the Sierra Design brand of outdoor products starting with merchandise for the spring/summer season. The St. Louis manufacturer had hoped to continue dealing with exclusive distributor OKURA SPORTS CO., LTD., even though that company's parent went bankrupt (see Japan-U.S. Business Report No. 349, October 1998, p. 29). That proved unworkable. Sierra Design products are available at some 300 retailers across the country. About half of the line is designed specifically for the Japanese market.

NIKE INC. has moved into the golf ball market in Japan as well as in the United States and Europe. It is offering local golfers four choices that differ by drive distance, feel, 8-iron spin and wedge accuracy. The Nike Tour Control, Spin Control, Distance Control and Distance balls are priced between $3.50 and $6.20 each.

Electronically generated coupons tailored to a customer's purchases are now offered at two of Japan's five biggest supermarket chains. In fairly quick succession, the majority-owned subsidiary of CATALINA MARKETING CORP. signed JUSCO CO., LTD. and SEIYU, LTD. to introduce the Catalina Marketing Network in all of their stores. The St. Petersburg, Florida company estimates that its program now reaches nearly 7 million shoppers in more than 300 stores every week in Japan. Jusco and Seiyu both participated in the test-marketing of the system.

High-resolution, satellite-captured images of the earth will be marketed in Japan by MITSUBISHI CORP. under an agreement with SPACE IMAGING INC. The Sunnyvale, California firm, owned in part by LOCKHEED MARTIN CORP., will compile data transmitted from two satellites that will be launched for it later this year into digital maps. The extremely detailed information is expected to find wide use in ITS (intelligent transportation system) and GIS (geographical information system) applications. Although the trader already has formed a firm to represent Space Imaging, it will seek other investors in this new business.

HERTZ CORP. might be the world's largest car rental company, but it has no on-the-ground presence in the economy second only to the United States' in size. It now has come up with a second-best solution: a tie- in with TOYOTA MOTOR CORP.'s rent-a-car operation. Under an agreement in principle that could be finalized in April, Hertz will promote Toyota's service to its customers interested in renting a vehicle in Japan. In turn, Toyota, whose network of 65 companies with 1,100 locations around Japan makes it the biggest car-rental company in the country, will display the Hertz logo at its rental counters to increase awareness of the Hertz name for people traveling abroad who might want to rent a car. Customers who have one of the cards issued by the two rental agencies also will be eligible for discounted rates when they contract with the partner for a vehicle.

To provide better information to its clients around the world on economic and financial developments in Japan and elsewhere in Asia, PRIMARK DECISION ECONOMICS, INC. has opened an office in Tokyo. The unit of Waltham, Massachusetts-based PRIMARK CORP. develops financial and economic forecasts, analyses and commentary for an international client list that includes financial institutions, multinationals and government agencies. Primark Decision Economics also believes that a local presence will help it improve service to Asian subscribers to its services.

META GROUP, INC., a Stamford, Connecticut research and consulting company that specializes in the information technology field, has tied up with ITR CONSULTING CO., LTD., both to bring its services directly to Japanese clients and to bolster its information base about IT developments in Japan. Through the independent Tokyo research firm, META will be able to provide Japanese-language coverage of the latest technologies, industry trends and business challenges to client companies. It also can offer customized research and consulting for these firms.

Help is on the way for manufacturers having trouble disposing of excess inventories. ATWOOD RICHARDS INC., which claims the title of the leading U.S. corporate barter company, has contracted with 3S WORLDWIDE INC. to represent it in Japan. Initially, the Tokyo start-up hopes to enlist 300 or so consumer goods makers to sign up for the New York City company's service. It will appraise the value of a company's surplus stocks and issue it a trade credit that can be used to acquire goods or services from other members of the Atwood Richards/Japan network. Products obtained by 3S Worldwide will be reassessed by Atwood Richards and then sold in the 26 countries in which the corporate broker operates. The company expects to do $2.7 million worth of business in Japan in the first year.

Real-time international financial news provider BRIDGE INFORMATION SYSTEMS INC. has extended for five years an agreement with KYODO NEWS MARKETS CO., LTD. set to expire in 2000 covering the exclusive distribution in Japan of real-time financial information from TELERATE, INC., now a Bridge subsidiary. Under a separate arrangement, Kyodo News also will distribute all Bridge products except for most of the New York City company's equity products; they will continue to be handled by Bridge's Japanese subsidiary. Among the Bridge and Telerate products to be sold by Kyodo News are data on short-term capital, fixed asset, foreign exchange and commodity markets. Over the near term, Bridge hopes to migrate all of these services to digital networks and to Internet distribution.

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

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