No. 359, August 1999

1999 Archive Index aaaa Subscriber Area aaaa Home

Japanese Companies in the United States

American Companies In Japan

1999 Archive Index aaaa Subscriber Area aaaa Home

Japanese Companies in the U.S.


Work should start within the next few months on SHIN-ETSU CHEMICAL CO., LTD.'s $250 million or so polyvinyl chloride plant in Addis, Louisiana, near Baton Rouge (see Japan-U.S. Business Report No. 349, October 1998, p. 2). The world's top manufacturer of PVC intends to complete plant construction as soon as possible but no later than the fall of 2001 to meet the steady increase in American demand for the versatile plastic. The Louisiana factory, which will source PVC building blocks from a nearby DOW CHEMICAL CO. facility rather than make them itself, will have an annual production capacity of 1.3 billion pounds. It will be operated by SHINTECH INC., Shin- Etsu Chemical's 25-year-old manufacturing unit in Freeport, Texas. PVC production capacity there is 3.2 billion pounds a year.

TEIJIN LTD. and E.I. DUPONT DE NEMOURS & CO., INC. finalized a pending deal to combine their global polyester film operations effective October 1 (see Japan-U.S. Business Report No. 354, March 1999, p. 2). Seven joint ventures will be formed under the control of what the partners are calling a Global Policy Board. They will employ roughly 4,000 people and have a combined annual production capacity of as much as 375,000 tons, tops in the world. Wilmington, Delaware-head-quartered DUPONT TEIJIN FILMS U.S. LP, in which Teijin and DuPont each will have a 49.9 percent interest, will take over the American multinational's polyester film manufacturing and marketing business in the United States as well as an existing Teijin-DuPont polyester film venture. TEIJIN DUPONT FILMS JAPAN LTD. will be responsible for the Japan side of the tie-up. Teijin will own 50.1 percent of this Tokyo- based company. The other joint ventures will be established in Scotland, Luxembourg, the Netherlands, Indonesia and the People's Republic of China. The European operations will be equally owned. Teijin will be the majority owner of the Indonesia company, while the reverse will be true for the Chinese firm.

For TORAY INDUSTRIES, INC., which ranks second only to E.I. DUPONT DE NEMOURS & CO., INC. as a world manufacturer of polyester film, engineering plastics represent a U.S. growth market because of expanded onshore production by automotive makers and other Japanese customers. It hopes to double sales of these products to $30 million in FY 2002. The first step toward this goal is making MONTOR PERFORMANCE PLASTIC CO. a wholly owned marketing unit. This Troy, Michigan company, formed in 1989, was set up on an equal basis by Toray and what became SOLUTIA INC. As TORAY RESIN CO., it will handle such engineering plastics as nylon (which Solutia will continue to supply) and ABS (acrylonitrile-butadiene-styrene), targeting sales at American automotive makers as well as continuing to cultivate business among Japanese manufacturers operating in the United States.

Although toner resin and ink-jet materials manufacturer and marketer POLYTRIBO INC. is profitable, partners FUJIKURA KASEI CO., LTD. (40 percent) and ROHM & HAAS CO. (60 percent) decided to transform the Bristol, Pennsylvania company into a toner resin marketing outfit wholly owned by the Japanese parent. Formed in 1985, Polytribo began to make toner resins in 1988 at Rohm & Haas' Bristol plant. In 1996, it entered the ink-jet materials business, supplying pigment dispersions for use in pigmented ink-jet inks. As part of the restructuring, Rohm & Haas, a Philadelphia- based specialty chemical company, acquired the ink-jet materials business. It will continue to make toner resins for marketing by Polytribo to Japanese-affiliated companies in the United States manufacturing copier toner.

Silicone rubber manufacturer ASAHI RUBBER INC. and ESSEX SPECIALTY PRODUCTS, INC., which is strong in adhesives and sealants, are collaborating on automotive-use sealants. At the start, they will exchange product and process technologies for sealant materials, moving on later to final products. The globalization of the automotive industry is behind the tie-up. Asahi Rubber recently formed a U.S. subsidiary to market color silicone rubber caps to vehicle makers (see Japan-U.S. Business Report No. 357, June 1999, p. 12). Auburn Hills, Michigan Essex is a DOW CHEMICAL CO. subsidiary.

To accelerate its drug discovery efforts, DAIICHI PHARMACEUTICAL CO., LTD. contracted with AXYS PHARMACEUTICALS, INC. to obtain a diverse compound screening library consisting of small molecule compounds created through the South San Francisco, California company's combinatorial chemistry technologies. The three- year deal calls for payments to Axys in excess of $10 million.

An eighth Japanese drug company will tap the expertise of PROTEIN DESIGN LABS, INC. Under a research agreement with FUJISAWA PHARMACEUTICAL CO., LTD., which is seeking a new approach to the treatment of certain diseases in the inflammatory and immunological fields, the Fremont, California firm will engineer humanized antibodies targeted at these problems.

The Food and Drug Administration approved for marketing a third drug to help people with adult-onset or Type II diabetes use more effectively the insulin their body produces. ACTOS (pioglitazone hydrochloride) was commercialized by TAKEDA CHEMICAL INDUSTRIES, LTD. It will be marketed by the big drug company's New York City subsidiary and ELI LILLY AND CO. (see Japan-U.S. Business Report No. 356, May 1999, p. 2). People prescribed ACTOS only will have to take it once a day. Moreover, they can take it at any time, with or without food. In another plus for the drug, it can be used in combination with three other diabetes-fighters as well as alone. Analysts expect ACTOS to be a big seller for Takeda Chemical.

TAKEDA CHEMICAL INDUSTRIES, LTD. also could have a Viagra-type blockbuster on the U.S. market sometime in 2000. TAP PHARMACEUTICALS INC., the company's long-standing joint venture with ABBOTT LABORATORIES, filed a new drug application with the FDA for UPRIMA (apomorphine HCI) for the treatment of male erectile dysfunction. The drug affects the central nervous system in the brain to provide sexual stimulation.

Clinical trials of two EISAI CO., LTD. compounds have started in the United States. E5564, discovered and synthesized by EISAI RESEARCH INSTITUTE in Andover, Massachusetts, is a Lipid A antagonist that is being investigated as a potential treatment for sepsis and septic shock. No effective drug therapy currently exists for sepsis, a toxic condition resulting from the spread of bacteria from an infection site. E1010, a product of Eisai's research laboratories in Japan, is a carbapenem antibiotic.

In a first for BANYU PHARMACEUTICAL CO., LTD., three drug candidates developed in-house are undergoing clinical testing in the United States. The pharmaceutical firm tied up with a contract research organization to conduct human trials on J-107088, an indolo-carbazole antitumor drug being investigated as a cancer treatment. On the other two candidates — J-104132, an endothelin receptor antagonist thought to be effective for hypertension, and J-104135, a muscarine M3 receptor antagonist — Banyu is working with its majority stockholder, MERCK & CO., INC. If the efficacy of any of these possible therapies is verified during the clinical testing process, which is at the Phase I or the Phase II point, the American drug powerhouse would handle international marketing, paying royalties to Banyu.

Like Japan's top pharmaceutical manufacturers, second-tier drug companies have set their sights on the American market. The attraction is not just the sales potential of clinically successful products but an approval process that is relatively faster than Japan's. Any number of recent examples highlight this reality. For instance, SUNTORY LTD., which has been in the drug business for two decades, formed a subsidiary to oversee clinical testing of two compounds, one for cerebral-vascular disease and the other for immunodeficiency problems, for both the American and the Japanese markets. SUNTORY PHARMACEUTICAL, INC., which likely will set up operations in New York City or northern New Jersey, hopes to win FDA marketing approval for these drug candidates in 2004. The big whiskey manufacturer also has identified other products in its development pipeline that it wants to submit for U.S. clinical testing.

Like the whiskey maker, AJINOMOTO CO., INC. has identified pharmaceuticals as a strategic business and hopes the regulatory process and sales potential of the United States will help it achieve this diversification. Recently established AJINOMOTO PHARMACEUTICALS USA, INC. of Hackensack, New Jersey will oversee Phase II/III/IV clinical testing of AT-1015, a prospective antithrombosis drug, starting within this year. It also will handle licensing of Japan-discovered compounds. On Ajinomoto's U.S. agenda as well is the marketing of Fastic before the end of 2000. This diabetes medication is targeted at people with fairly mild symptoms. It is designed to curb rises in blood-sugar levels following meals.

Signaling its new emphasis on the American market, NIPPON SHINYAKU CO., LTD. transformed its New York City liaison office, opened in October 1997, into a subsidiary. NS PHARMA, INC.'s mandate is to strengthen the drug maker's U.S.-based clinical development system and to explore business development opportunities. Nippon Shinyaku is strong in urological drugs.

Before the end of 2001, YOSHITOMI PHARMACEUTICAL INDUSTRIES, LTD. hopes to have in hand FDA approval to market what the midsize drug company calls its first world-class product. Circulase (AS-013 in lipid emulsion), developed by Los Angeles subsidiary ALPHA THERAPEUTIC CORP., is being studied for the prevention of limb amputation in patients with severe ischemia, a problem caused by the obstruction of the inflow of arterial blood. Phase II/III trials are underway. Yoshitomi Pharmaceutical also hopes to launch in the United States in coming years two products that are under development in its own laboratories.

GEN-PROBE INC. — a CHUGAI PHARMACEUTICAL CO., LTD. subsidiary well-known for its genetic probe-based diagnostic products — received nonexclusive worldwide rights to apply AMBION, INC.'s Armored RNA (ribonucleic acid) technology to products and processes for human clinical diagnostic uses. A major application for the Austin, Texas company's know-how is the production of viral assays of RNA controls and standards that withstand exposure to ribonucleases and long-term storage in serum or plasma. San Diego, California Gen-Probe is developing viral nucleic acid tests for screening the blood supply for HIV-1 and 2 and hepatitis B and C viruses (see Japan- U.S. Business Report No. 357, June 1999, p. 2).

Can the consumption of oolong tea help to control obesity? A transpacific team is researching the effects of oolong tea on energy metabolism. The first-of-its-kind project joins SUNTORY LTD.'s Basic Research Institute and Tokushima University with the Department of Agriculture's Beltsville Human Nutrition Research Center in Beltsville, Maryland. Investigators in Japan already had conducted research on oolong tea's ability to boost energy metabolism, but their work required more precise measurement capabilities than were available in that country. Those will be provided by BHNRC, one of six human nutrition research centers run by USDA and, more importantly, equipped with state-of-the-art research instruments, including one of the few human calorimeters in the United States.

An exchange rate of ¥120=$1.00 was used in this report.

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For the first time, HITACHI DATA SYSTEMS CORP., which offers a broad range of servers, multiplatform storage subsystems and professional services, will use a two- tiered technical distribution sales channel. The HITACHI, LTD. subsidiary already has signed channel partnership agreements with the Greenville, South Carolina Gates/Arrow Distributing unit of ARROW ELECTRONICS, INC., TECH DATA CORP., a Clearwater, Florida company that previously worked with HITACHI PC CORP., and Wyle Systems of Irvine, California, which is part of VEBA ELECTRONICS INC. Hitachi Freedom Storage 5800 systems and Hitachi VisionBase 8880R PC servers are the initial products going through the two-tiered channel. Others will be added in time. Within three years, Santa Clara, California-headquartered Hitachi Data Systems calculates, channel-based revenues will account for 70 percent of its total.

HITACHI DATA SYSTEMS CORP.'s Skyline Trinium family of enterprise servers, designed for the availability requirements of electronic business, soon will have a lower point of entry. Come December, two-way and three-way Trinium servers will be ready in addition to the four-way to 12-way models scheduled for September shipment and the 13-engine to 16-engine models expected to be on the market by the first quarter of 2000.

A PACKARD BELL NEC, INC. trying to get back on a growth track is banking on the success of each and every new product it introduces, whether the Consumer Division's recently announced NEC Z1 high-end home computer (see Japan-U.S. Business Report No. 358, July 1999, p. 3) or three additions to the NEC Ready line for home or home office environments. With suggested retail prices of $800 to $1,300, this trio offers a choice of processors from the 433-MHz Celeron up to the 450-MHz Pentium III. Buyers also can opt for 64 megabytes or 96 MB of system memory (expandable to 256 MB), an 8.4-gigabyte or a 10.2-GB hard drive, and a 32X CD-ROM (compact disc-read-only memory) drive or a DVD-ROM (digital video disc) drive. Two of the three also come with a CD-Rewritable drive for easy data storage and archiving.

Offering small to midsize businesses the latest portable technology at industry-leading prices is how the Computer Systems Division of TOSHIBA AMERICA INFORMATION SYSTEMS, INC. describes the Satellite 4100XDVD and the Satellite 4090XDVD. The first product features the new 400-MHz mobile Pentium II chip, a 14.1-inch active- matrix TFT (thin-film-transistor) LCD (liquid crystal display) screen, 64 MB of synchronous dynamic random access memory (expandable to 192 MB) and a 6.4-GB hard drive for $2,800. The second product has the same configuration but incorporates a 400-MHz Celeron processor. It lists for $2,400. As their model numbers suggest, the two new notebooks also have a DVD-ROM drive.

Catering to the needs of budget-conscious small businesses, TOSHIBA AMERICA INFORMATION SYSTEMS, INC.'s CSD also released the Satellite 2595 Series. Available in three different configurations, this line shares a 400-MHz Celeron processor, 64 MB of internal memory and an all-in-one design that integrates the hard drive, diskette drive and DVD-ROM or CD-ROM drive for a slimmer form factor. The Satellite 2595XDVD model, which is priced at $2,300, has a 6.4-GB hard drive, a 14.1- inch active-matrix display and a 2X DVD-ROM drive. For $1,800, customers can acquire the Satellite 2595CDT with a 6.4-GB hard drive, a 12.1-inch TFT LCD display and a 24X CD-ROM drive. For buyers on a smaller budget, there is the $1,600 Satellite 2595CDS with a 4.3-GB hard drive, a 24X CD-ROM drive and a 13-inch dual-scan Color Bright display.

For individual buyers, TOSHIBA AMERICA INFORMATION SYSTEMS, INC.'s CSD now is offering the Satellite 2060CDS/2065CDS. These models, which start at $1,400, use the 366-MHz AMD-K6-2 processor. They are equipped with a 4.3-GB hard drive, an integrated 24X CD-ROM drive and a 12.1-inch Color Bright display.

However they are described — personal organizers or personal digital assistants — handheld computers are becoming ever-more sophisticated. For instance, the ePlate from HITACHI AMERICA, LTD. offers the powerful connectivity of the Windows CE Handheld PC Professional Edition, Version 3, operating system, a 7.5-inch resistive- touch color flat-panel display with a VGA (video graphics array) resolution of 640 x 480 pixels and handwriting recognition, a 128-MHz SuperH SH-4 RISC (reduced instruction-set computing) processor and 16 MB of RAM memory for $1,200. This price also buys a battery with an estimated use time of nine hours and a package that weighs just 29.6 ounces.

Users of HITACHI DATA SYSTEMS CORP.'s enterprise-level Hitachi Freedom Storage 7700E storage subsystems now can access any data on any computer, anywhere, at any time. The Hitachi Freedom Storage NanoCopy is described as the storage industry's first hardware-based remote copy solution with full data integrity. It copies data between any number of primary subsystems and any number of secondary subsystems. The copies can be of any type or amount of data and can be recorded on subsystems anywhere in the world.

Whatever the storage requirements of desktop and portable PCs, one of the hard disk drives recently introduced by FUJITSU COMPUTER PRODUCTS OF AMERICA, INC. probably fits the bill. Its Desktop 27 family, which incorporates third-generation giant magneto-resistive heads, spans 10 models ranging in capacity from 6.4 GB to 27.3 GB with rotational speeds of either 5400 RPM or 7200 RPM. All are Ultra ATA 66- compatible so that they can take advantage of the latest drive-system interface for transferring data. Four high-performance models, grouped as the Desktop 27 XP series, offer a record-fast data transfer rate of 40.7 MB per second. Three Desktop 27 XV models, which have transfer rates of up to 30.4 MB per second, are optimized for audio/visual and Internet applications, while three others are designed for cost- conscious consumer PC users. For manufacturers of value-class PCs and entertainment devices for budget-minded buyers, the San Jose, California supplier also introduced a pair of entry-level desktop hard drives. Available in capacities of 4.3 GB and 8.4 GB, the XV8 models are 5400-RPM drives with transfer rates of up to 34.4 MB per second and average seek times of 9.5 milliseconds, the same as the Desktop 27 XV products. According to Fujitsu Computer Products, it is the first company to release a single-platter 8.4-GB drive and a single-head 4.3-GB desktop drive.

FUJITSU COMPUTER PRODUCTS OF AMERICA, INC. also is helping notebook computer users pack more data into thinner machines. Its new Mobile 18 XP Series of 2.5-inch drives includes storage capacities of 6, 9, 12 and 18 GB in 9.5-millimeter and 12.5-mm heights. All feature third-generation GMR heads and a transfer rate of 22.4 MB per second. The Mobile 18 XP Series also is said to be the first in its class to offer the UDMA 66 interface, which enables faster transaction speeds.

Not forgetting the growing ranks of APPLE COMPUTER, INC. buyers, FUJITSU COMPUTER PRODUCTS OF AMERICA, INC. added to its family of DynaMO magneto- optical drives two external products for G3 and iMac customers that are compatible with the high-speed FireWire/IEEE 1394 peripheral connection interface. The DynaMO 1300FE provides 1.3 GB of removable, rewritable capacity on a single 3.5-inch disk, the highest MO capacity in the industry, the company claims, while the DynaMO 640FE provides 640 MB of storage. Fujitsu Computer Products also announced the external DynaMO 640USB for systems like the G3 and the iMac that have a universal serial port. All three products are hot-pluggable.

The second product in RICOH CO., LTD.'s line of CD-Recordable/CD-Rewritable drives (see Japan-U.S. Business Report No. 358, July 1999, p. 4) is designed specifically for laptop computers. Available from the firm's Tustin, California subsidiary, the portable MediaMaster MP8040SE combines 4X CD-R recording and 4X CD-RW rewriting with a 20X CD-reader. It has a suggested price of $550.

An exchange rate of ¥120=$1.00 was used in this report.

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The problems of Japanese real estate companies can work to the advantage of expansion-minded competitors. The former 297-room Hotel Nikko of Beverly Park in Los Angeles, a JAL HOTELS CO., LTD. property opened in 1989, is the first Le Meridien hotel in the United States. The upscale hotel chain is owned by Great Britain's largest hotelier group. Financial terms were not disclosed.

Like many of its debt-burdened counterparts, TOKYU CONSTRUCTION CO., LTD. has pulled out of the American market. The major general contractor liquidated its Pasadena, California holding company, PAN PACIFIC CONSTRUCTION NORTH AMERICA, INC., taking a loss of $11.7 million in the process. It also wrote off in its FY 1998 financial statement roughly $77.5 million owed by a Pasadena wastewater treatment construction company.

An exchange rate of ¥120=$1.00 was used in this report.

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For $143 million in cash, GOULD ELECTRONICS INC. sold its Circuit Protection Group to a French company. Based in Newburyport, Massachusetts, Gould CPG is the largest maker of industrial power fuses in North America and Europe, with manufacturing facilities in Newburyport, Juarez, Mexico, Toronto, Canada, Spain and Germany. Eastlake, Ohio-headquartered Gould Electronics, a JAPAN ENERGY CORP. company since 1988, will use the proceeds from the sale to pay down its debt and, possibly, to expand its core operations. Those are centered on printed circuit materials and optoelectronic products, including electrodeposited copper foil, copper aluminum copper, adhesiveless flexible laminates and fiber-optic components and assemblies.

Interested in supplying the North American marketplace as a local player, SUMIDA ELECTRIC CO., LTD. — a manufacturer of coils for information technology, communications and mobile systems — acquired C.P. CLARE CORP.'s Electromagnetic Group for approximately $36 million. The renamed CLAREREMTECH CORP. produces advanced magnetic products, reed relays, surge protectors and other electromagnetic components and assemblies. Headquartered in Arlington Heights, Illinois, it has two factories in Guadalajara, Mexico and a purchasing office in Taiwan. ClareREMtech employs some 1,200 people and has annual revenues of around $55 million. Sumida Electric is an unusual Japanese company in that all of its manufacturing takes place overseas, as do most of its sales.

SHOWA DENKO K.K. is partnering with KEMET CORP., the world's leading manufacturer of tantalum capacitors, to develop and make solid conductive polymer aluminum surface-mount capacitors. This product promises several advantages over existing aluminum electrolytic capacitors in communications and computer applications, including not only low electrical resistance and high heat stability but also true surface-mount capability. Expected to be commercially available in the second quarter of 2000, the new capacitor will be produced by Showa Denko in a factory to be built at its production complex in Nagano prefecture and by KEMET in its Greenville, South Carolina and Matamoros, Mexico facilities. For KEMET, the Showa Denko deal complements an arrangement with NEC CORP. on conductive polymer tantalum capacitors (see Japan-U.S. Business Report No. 358, July 1999, p. 6).

The first DVD-Audio players available in the United States should be on store shelves in October, manufacturer MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. says. The two initial models, which will list for about $1,000 and $1,200, respectively, come close to replicating the sound quality of concert halls. A DVD disk can hold 1,000 times more information than a typical music CD. When plugged into a television set, a DVD-Audio player can play movies recorded to DVD standards while also presenting graphics, text and music videos.

An exchange rate of ¥120=$1.00 was used in this report.

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For the first time, a Japanese company went public in the United States rather than at home. INTERNET INITIATIVE JAPAN INC., generally ranked as the country's top Internet services provider, delivered this seeming rebuff to Japan's over-the-counter market and stock exchanges. However, IIJ executives said that the decision to list on NASDAQ had more to do with the company's perceived need to expand its presence in the United States, the center of the international Internet business, than with any drawbacks of an initial public offering in Japan. IIJ, which has an extensive Internet backbone in Japan with links to other Asian countries as well as its own transpacific backbone, raised $143 million from its IPO. It will use this money mainly for capital investment, including additional data centers.

The electronic stock trading system developed by OPTIMARK TECHNOLOGIES, INC., which matches large institutional trades, has received a major financial endorsement. SOFTBANK CAPITAL PARTNERS LP — the big venture capital fund recently organized by SOFTBANK CORP. to invest in Internet and related ventures eyeing IPOs in the near term (see Japan-U.S. Business Report No. 358, July 1999, p. 6) — agreed to invest as much as $100 million in the Jersey City, New Jersey company. Softbank and OptiMark have an indirect link. Softbank is working with the NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. to bring a NASDAQ-type electronic stock market to Japan (see Japan-U.S. Business Report No. 358, July 1999, p. 18), while NASD is installing the OptiMark system for trading NASDAQ-listed stocks. At the same time, the Osaka Securities Exchange is implementing the electronic trading system, with operations scheduled to begin in the spring of 2000 (see Japan-U.S. Business Report No. 349, October 1998, p. 16).

Continuing to unwind its operations in the United States while the search continues for a buyer of its Japan businesses, nationalized LONG-TERM CREDIT BANK OF JAPAN, LTD. tentatively has agreed to sell the assets managed by its New York City trust bank subsidiary to BANK OF NEW YORK CO. These assets totaled an estimated $5 billion or so at the end of 1998. The sale price still is being negotiated. This spring, LTCB arranged to sell its $11 billion portfolio of U.S.-based loans to GE CAPITAL CORP. (see Japan-U.S. Business Report No. 357, June 1999, p. 6).

CHASE MANHATTAN CORP. is the sole custodian of the $16.7 billion or so worth of pension funds and other assets that TOYO TRUST & BANKING CO., LTD. manages overseas (see Japan-U.S. Business Report No. 354, March 1999, p. 6). The number- five trust bank, which is withdrawing from offshore operations, broke ground with this arrangement since trust banks and life insurers normally tap their own foreign units or multiple foreign financial institutions to handle custodial functions. The tie-up with Chase also could bring changes to the way that Toyo Trust manages money invested overseas.

An exchange rate of ¥120=$1.00 was used in this report.

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The two biggest manufacturers of instant noodles and instant noodle soups in the United States — NISSIN FOOD PRODUCTS CO., LTD. and TOYO SUISAN KAISHA, LTD. — reportedly have each earmarked $8.3 million for their production ventures. Nissin Food, which has produced these products here for more than a quarter-century, expects the extra investment to make its Lancaster, Pennsylvania plant more efficient. The company also is negotiating with several supermarket chains to supply instant noodles and/or instant noodle soups under their private brands. This output could come from the Pennsylvania factory or the Nissin Food plant in Gardena, California. For its part, Toyo Suisan plans to increase instant noodle capacity at its MARUCHAN, INC. subsidiary in Irvine, California. The expansion, scheduled for completion this fall, will boost annual capacity by about 15 percent to 1.5 billion packages. The Maruchan plant has been in business since 1977.

MITSUKAN GROUP CORP. (formerly Nakano Vinegar Co., Ltd.) hopes to capitalize on the popularity of Japanese foods both to expand U.S. sales of Japanese-style seasonings and to increase awareness of the Mitsukan brand name. Through its NAKANO FOODS, INC. marketing unit in Arlington Heights, Illinois, the company already sells such products as rice vinegar from its Rancho Cucamonga, California plant. Mitsukan plans to expand the range of seasoned vinegars available in the United States as well as introduce soup bases. Nakano Foods is projecting a 5 percent increase in business in FY 1999 to $65 million on the basis of these moves. Mitsukan's Traverse City, Michigan INDIAN SUMMER, INC. subsidiary is a big supplier of traditional vinegar as well as apple cider.

A wider variety of organic products will be available in Japan as a result of a contract between NICHIRO CORP. and CASCADIAN FARM. Starting this fall, the processed foods manufacturer will import corn and other organic frozen vegetables from the Sedro-Woolley, Washington company, a major grower, producer and distributor of organic products. Nichiro is looking for sales of $2.1 million in the first year of the tie- up. In time, it could source more products from Cascadian Farm, which makes more than 150 organic food items, including frozen desserts, vegetarian meals and entrees, and frozen fruit and juices.

An exchange rate of ¥120=$1.00 was used in this report.

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A decade after it used an acquisition to move into the U.S. magnetic iron oxide manufacturing and marketing business, MITSUI MINING & SMELTING CO., LTD. has pulled out. It sold Pulaski, Virginia-based MAGNOX, INC. to a management-led team for an undisclosed amount. Mitsui Mining will have to take a write-off of $22.5 million when it closes its books for FY 1999. A primary use for magnetic iron oxide is in videocassette tape and audio tape, but the growing popularity of CDs and other media has hurt Magnox's operations.

An exchange rate of ¥120=$1.00 was used in this report.

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Car and truck manufacturers operating in North America will have another onshore source of metal stampings as soon as May 2000. Big automotive stamping tool supplier FUJI TECHNICA INC. formed DIENAMIC SOLUTIONS, LLC in Bowling Green, Ohio with minority (30 percent) partner HONGO K.K. The pair expect to invest $25 million in the factory, which will be equipped with a 2,000-ton mechanical press, a 1,300-ton mechanical press, three 1,000-ton mechanical presses and four large machining centers. Employment could reach 65 people soon after start-up. Dienamic Solutions is projecting sales at $8.3 million in the first full year of production and double that figure in the third year. The factory will allow Fuji Technica, which currently builds all its stamping tools in Japan for the North American market, to provide more value-added services to customers, including maintenance over the life of products. Most of the business that Fuji Technica's Troy, Michigan marketing unit now does is with the Big Three and European vehicle builders.

ASAHI ORGANIC CHEMICALS INDUSTRY CO., LTD. has offered to buy the outstanding shares of Malden, Massachusetts-based ASAHI/AMERICA, INC., a marketer and manufacturer of thermoplastic valves, valve actuators and controls, piping systems, flow meters and industrial filtration equipment for a variety of applications. The Miyazaki prefecture company, Japan's dominant manufacturer of plastic valves and Asahi/America's principal supplier of this product, already is a partial owner. The deal is conditioned on the sale of QUAIL PIPING PRODUCTS, INC. — a wholly owned Asahi/America subsidiary that produces corrugated polyethylene piping systems for use in water, sewage and drainage projects and fiber-optic cable duct for the telecommunications industry — to a management buyout team for $4.5 million. Asahi Organic Chemicals will pay a minimum of $29.1 million to take over its affiliate.

JAPAN STEEL WORKS, LTD., among the world's biggest makers of plastic injection- molding equipment, is promoting its unique die slide system for hollow product injection molding. This process is said to eliminate most of the drawbacks of current methods for molding hollow products, such as uneven wall thicknesses that lead to strength problems, as well as joining two halves for closed products. JSW says that the DSI molding system is particularly well-suited to modularized automotive parts. JSW PLASTICS MACHINERY INC. of Anaheim, California likely will be in charge of marketing the DSI system.

In a major win, TOKYO KIKAI SEISAKUSHO, LTD., Japan's dominant maker of rotary printing presses for the newspaper industry, has contracts to supply equipment to DOW JONES & CO., INC., the publisher of The Wall Street Journal, and to Ohio's Columbus Dispatch. The Dow Jones order covers 18 TKS Color Top 6000 tower-type printing systems, which simultaneously print both sides of the page in four colors. Shipments to the plants around the country that print The Wall Street Journal started in July and should be complete by November 2000. The contract with the Columbus Dispatch involves four of the same systems. TKS's Richardson, Texas distribution subsidiary did not disclose the value of either contract.

HEIAN CORP. has landed a contract from TRW INC. for a CNC (computer numerically controlled) cutting machine that can process ultrahard materials at 5/100 of a millimeter. TRW will use the equipment to make solar panel frames for satellites. With this order in hand, the Hamamatsu, Shizuoka prefecture manufacturer of woodworking equipment hopes to sell 10 of its $500,000 precision cutting systems a year.

Machine tool manufacturer KOYO MACHINE INDUSTRIES CO., LTD. is looking for more sales in the United States. Through marketing unit KOYO MACHINERY U.S.A., INC. of Plymouth, Michigan, which opened in 1991, the company had U.S. revenues of roughly $14.2 million in FY 1998. Most of its business comes from the sale of grinders to the North American assembly operations of Japanese automotive makers and to FORD MOTOR CO. To backstop the expansion strategy, Koyo Machine increased the capitalization of its subsidiary and opened a technical center at U.S. headquarters to provide better support to customers.

As part of its push to boost sales of superhard tool tips and other tooling to the U.S. metalworking and automotive industries, particularly to Japanese-affiliated participants, TOSHIBA TUNGALOY CO., LTD. will put out a catalog this fall that lists about 1,200 products. Its Elk Grove Village, Illinois sales subsidiary currently offers only a few hundred products. To the extent possible, Japan's top manufacturer of superhard tools also will make use of the North American distribution channels of Latrobe, Pennsylvania-headquartered KENNAMETAL INC. The two signed a wide- ranging business collaboration agreement earlier this year (see Japan-U.S. Business Report No. 353, February 1999, p. 8).

Hoping to ride the boom in the U.S. construction equipment market, particularly the leasing end of the business, KOMATSU LTD. has penciled in combined FY 1999 sales of 200 units for two midsize additions to the US Series of hydraulic excavators introduced this past spring. The 28,000-pound PC128us-1 has a 0.59-cubic-yard bucket, while the PC228uslc-1 has an operating weight of 50,485 pounds and a bucket capacity of 1.05 cubic yards. Both machines feature a tight tail swing area, making them ideal for work in close quarters. If Komatsu's sales forecast is on target, KOMA-TSU AMERICA INTERNATIONAL CO. could start onshore production, presumably at its Chattanooga, Tennessee factory.

In a cost-cutting, efficiency-enhancing move, MINEBEA CO., LTD. — best known as the world's leading maker of miniature and instrument size ball bearings but also a major producer of stepper and spindle motors, keyboards, fans and mechanical assemblies — combined two of its U.S. marketing units into NMB TECHNOLOGIES CORP. That company reports to Minebea's North American headquarters, NMB (U.S.A.), INC. in Chatsworth, California. By coincidence, just two weeks after the merger, NMB Technologies officially opened a technical center in Wixom, Michigan for testing and analyzing bearing and motor applications for various markets, including automotive. The facility can simulate all environmental and customer-use conditions, including temperature, humidity, altitude, contamination and corrosion. It also has a complete noise and vibration analysis capability.

An exchange rate of ¥120=$1.00 was used in this report.

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Through periodic acquisitions, OYO CORP., Japan's leading geophysical research company, has built a broad presence in the U.S. markets for seismic instruments used in the search for oil and gas, earthquake-detection equipment, ground-probing radar and side-scan sonar equipment and in related products and services. The latest addition to the Oyo stable is QUANTERRA INC., a Harvard, Massachusetts designer and manufacturer of high-resolution, broadband seismic instrumentation for scientific research and government applications. The $4.5 million acquisition actually was handled by Pasadena, California-based KINEMETRICS INC. An Oyo company since 1991, it is a leader in the earthquake instrumentation business, designing products for monitoring bridges, dams, structures and seismic arrays and networks. Kinemetrics and Quanterra have worked together on several projects, including an ongoing one for the U.S. Air Force to design a system for nuclear treaty verification.

The retrenchment of Japanese-affiliated manufacturers from the U.S. semiconductor business and other onshore electronics operations has taken a toll on equipment suppliers, including makers of clean rooms and clean-air systems. The situation is so dire that two otherwise rivals in this field have decided to cooperate across the board on marketing. Starting in December, AIRTECH JAPAN, LTD., which has a production and sales subsidiary in Hillsboro, Oregon, and Exton, Pennsylvania-based AIRO CLEAN INC. will market each other's products through their own distribution channels even if the products compete head-to-head. In the past, each company occasionally sold some of the other's lineup but not directly competing products. The main Airtech Japan equipment that Airo Clean will market is a filtration unit for removing contaminants from the air.

A novel product that developer TECHNOS JAPAN CO., LTD. describes as improving the quality of life of the severely disabled is commercially available through the Himeji, Hyogo prefecture company's recently established Bailey, Colorado subsidiary. MCTOS, short for mind-controlled tool operating system, is a switch controlled by bioelectrical impulses measured at the forehead. These include brainwaves, electrical impulses from eye movement and muscle activity. The idea behind MCTOS is for the user to control his or her mind, whether quieting it or stimulating it. A computer training program comes with the $2,500 product to help buyers master this skill.

An exchange rate of ¥120=$1.00 was used in this report.

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INTERNATIONAL BUSINESS MACHINES CORP.'s interest in limiting its exposure to the volatile DRAM market will give TOSHIBA CORP. the opportunity to implement the part of its semiconductor reorganization strategy that involves becoming a full-fledged U.S. manufacturer of memories. The two are equal partners in DOMINION SEMICONDUCTOR LLC, a Manassas, Virginia 64-megabit DRAM wafer fabrication facility that has been operational since September 1997. By the end of 2000, Toshiba will buy out IBM's half of Dominion. Financial terms were not disclosed, but industry sources in Japan speculate that the Japanese semiconductor maker will pay between $166.7 million and $250 million for its partner's share. That is a bargain price if these reports are true. IBM and Toshiba each put up $200 million toward Dominion's capitalization and equally split the estimated $1 billion cost of building and equipping the wafer fab. Even before the purchase is finalized, Toshiba will increase its share of Dominion's output to 75 percent from 50 percent. The plant currently has the capacity to make 4 million 64-megabit DRAMs a month, a figure that will rise to 6 million by yearend (see Japan-U.S. Business Report No. 353, February 1999, p. 9). In the fourth quarter of 2000, Toshiba will begin switching over part of the capacity used by IBM for DRAMs to the production of NAND flash memories. The company has tagged these devices as one of its core memory products, not just because of the rapid growth forecast for this market but also because flash memories, like static RAMs, another targeted product, have higher margins than DRAMs.

Although it promises considerable long-term financial rewards, the decision by SOFTBANK CORP. to become essentially a pure-play Internet company could prove costly in the short term as the firm divests or downsizes its non-Internet holdings. A case in point is Softbank's agreement to sell its 80 percent stake in KINGSTON TECHNOLOGY CORP. to the Fountain Valley, California firm's founders for $450 million. The Japanese company paid about $1.5 billion for this share of the world's top maker of memory boards for PCs in the fall of 1996.

A pair of semiconductor start-ups recently attracted funding from Japanese companies. MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. participated along with several name American investors in the third round of financing for TENSILICA INC. The Santa Clara, California company is involved in the emerging market for application- specific processor cores and software development tools used in high-volume, embedded systems. Tensilica, which has raised $33 million in venture capital, including $20 million in the last round, has a subsidiary in Yokohama (see Japan-U.S. Business Report No. 357, June 1999, p. 21).

For its part, KOMATSU ELECTRONIC METALS CO., LTD., an original investor in SILICON GENESIS CORP., joined in a second round of financing for the Campbell, California company that brought total funding to more than $30 million. SiGen will use the new money to further development of its Genesis Process layer-transfer technology for the cost-effective production of silicon-on-insulator wafers. At the start of 1999, the company won a contract from Komatsu Electronic Metals for a plasma implant system for SOI wafer production qualification. The two also signed a research agreement (see Japan-U.S. Business Report No. 352, January 1999, p. 19).

In a gutsy move, three small Kumamoto prefecture semiconductor production equipment suppliers are setting up shop in Hillsboro, Oregon. Their immediate goal is to win more business from Japanese-affiliated semiconductor and other electronics manufacturers operating in Oregon, although the large number of American high technology companies in the state no doubt is an attraction as well. PRECEED CO., LTD. already has formed a subsidiary; KHC CO., LTD. and KOTO SEISAKUSHO K.K. are in the process of doing so. All three have arranged to lease office and factory space from AIRTECH JAPAN, LTD.'s Hillsboro subsidiary.

Already the largest supplier in Japan of excimer laser light sources for patterning silicon wafers, KOMA-TSU LTD. is attempting to break into the American market. Its vehicle is the G20K, a fifth-generation, 248-nanometer krypton excimer laser light source operating at 2000 hertz. According to Komatsu, this product incorporates several advances to lower the traditionally high cost of using deep ultraviolet light sources, such as a 20 percent cut in power consumption and a doubling of the life expectancy of the light chamber. To backstop its move into the United States, Komatsu established a sales office in Santa Clara, California and a training center in Hillsboro, Oregon. It expects to have evaluation G20K units at the training center later this year and to open regional sales office on the East Coast and in the South in 2000.

NHK SPRING CO., LTD. is working with memory test equipment provider AEHR TEST SYSTEMS to create full-wafer probe contactors for use in wafer-level burn-in and test systems. Although best known as the world's largest spring manufacturer, NHK Spring is a leading supplier of miniature contactors for use in semiconductor wafer probe heads and in various test sockets. Mountain View, California-based Aehr Test Systems is developing a cost- and time-saving system that will enable chip manufacturers to perform burn-in and parallel functional testing of integrated circuits while still in wafer form. Contactors are integral to this system. The partners expect to roll out their full-wafer burn-in and test system in early 2000.

An exchange rate of ¥120=$1.00 was used in this report.

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The Panasonic Internet Incubator — a facility to nurture early-stage Internet and electronic commerce businesses — will open in October at PANASONIC TECHNOLOGIES, INC.'s Panasonic Digital Concepts Center in Cupertino, California. The idea behind the Panasonic Internet Incubator is to help start-ups get their businesses off the ground by making available to them space within PDCC's 15,000- square-foot facility, business services and a wide range of business development resources. The incubator also gives MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. the opportunity to evaluate firsthand technologies that might be of interest to it. PDCC — which was established to make investments to advance the development of next- generation digital, networking and Internet technologies, products and services (see Japan-U.S. Business Report No. 350, November 1998, p. 5) — has room for as many as 15 early-stage firms. Five already have been selected, including a firm that has developed enterprise software that provides real-time customer data analysis.

Even before it decided to concentrate its financial resources on promising Internet firms, SOFTBANK CORP. had interests in more than 100 such businesses. Now that the company has refined its focus and can access a pair of venture capital funds set up specifically to invest in Internet firms (see Japan-U.S. Business Report No. 358, July 1999, p. 6) as well as its own funds, this number is certain to grow rapidly. In fact, three additions already have been made to the total. For starters, Softbank itself agreed to invest $91 million in MORNINGSTAR, INC. to help the Chicago-based investment information and services firm enhance the content and the technology supporting The deal will give Softbank a 20 percent stake in the private company. Morningstar's on-line investment information site is designed to provide unbiased data, research, news and analysis for both individual investors and institutional customers. Softbank's investment decision no doubt grew out the joint venture it formed last year with Morningstar, the developer of the five-star mutual fund rating system, to make available to Japanese investors information on the performance of various mutual funds (see Japan-U.S. Business Report No. 347, August 1998, p. 29).

WEBHIRE, INC., the self-described leader in the business-to-business Internet recruiting marketplace, also has caught SOFTBANK CORP.'s attention. SOFTBANK CAPITAL PARTNERS LP is investing $20 million in the publicly traded Lexington, Massachusetts company. In addition, Softbank is acquiring a block of Webhire stock held by AMAZON.COM INC. Through these transactions, Softbank and its affiliates will own 39 percent of Webhire. The company currently helps more than 1,000 employers quickly and cost-effectively advertise job openings, attract and evaluate candidates and manage the hiring process. Webhire also manages and powers a number of Internet recruiting sites and job-posting sites. It will use the money from the Softbank investments to accelerate its Internet growth plans as well as to market its services more aggressively.

WEBVAN GROUP, INC.'s aggressive — and expensive — plans to bring on-line grocery shopping to 28 major markets around the United States over the next two years have created a lot of buzz about the Foster City, California company. But Webvan also has made a name for itself because of its ability to attract high-profile financial backers. These include SOFTBANK CORP. Funds affiliated with the company were initial investors in Webvan. SOFTBANK CAPITAL PARTNERS LP and two other well-known venture capitalists were the main participants in the latest round of financing, which raised $275 million for an aggregate total of nearly $400 million. The fresh capital will be used for Webvan's national expansion.

Buying flowers and gifts on-line is quickly developing into a big business. SOFTBANK CORP. hopes to benefit from that boom through a stake in 1-800-FLOWERS.COM, INC. As part of a private placement that raised a total of $102.6 million, the U.S. venture capital unit of SOFTBANK HOLDINGS INC. put up $40 million for a 6 percent interest in the Westbury, New York e-commerce provider. 1-800-FLOWERS subsequently filed to go public. Its IPO raised a net $117.2 million. Although the Internet is the company's fastest-growing sales channel, customers also can purchase products by calling toll-free or by visiting one of some 120 company-owned or franchised stores. For both the on-line and telephone businesses, roughly 1,400 independently owned florists help with fulfillment.

Although the scale of their activity is entirely different, other Japanese companies also hope that strategic investments will enable them to tap the technology and/or the financial potential of Internet businesses. For instance, NTT COMMUNICATIONS CORP., the long-distance and international carrier created through the July 1 breakup of NIPPON TELEGRAPH AND TELEPHONE CORP., was one of three firms that invested a total of $20 million in shares of COMMERCE ONE, INC.'s unregistered common stock after the Walnut Creek, California provider of e-commerce solutions closed its IPO. Commerce One will use this money, including the $7 million put up by NTT Communications, for general corporate purposes. Earlier this year, Commerce One and NTT announced a project to establish a business-to-business electronic marketplace (see Japan-U.S. Business Report No. 355, April 1999, p. 25).

In less than a year, EDOCS, which pioneered the market for electronic bill presentment and payment software applications, has raised more than $22 million, including $18.6 million in second-round financing from such investors as the American venture capital unit of JAFCO CO., LTD. The flagship product of Wayland, Massachusetts-based edocs is BillDirect, which allows billers to deploy and manage their own EBPP solutions to deliver personalized, interactive bills, statements and invoices through their own Web sites or Internet billing services providers. The U.S. arm of JAFCO, Japan's top venture capital firm, currently manages five funds with a combined capitalization of more than $350 million.

The U.S. unit of NIPPON INVESTMENT & FINANCE CO., LTD. joined INTEL CORP. and a big American venture capital fund in providing a combined $5.1 million for SIMPATA, INC., a provider of customizable, Internet-based employee administration solutions for small and midsize businesses. With a nudge from the trio of investors, the Fremont, California company was created recently through the merger of a firm that developed software-based benefits administration programs and one that offered Internet-based employee administration services. Simpata will use the new funds to expand its technology development efforts and to further develop its customer services infrastructure.

The fast-expanding on-line music and video retail business will have a new, heavyweight player early in 2000 when CDNOW INC., an Internet-based seller of these products, merges with COLUMBIA HOUSE INC. That direct marketer of music and movies, owned by SONY CORP. and TIME WARNER INC., has 16 million club "members," but it also operates a Web service. This site and CDNOW's will be linked, creating a customer base of some 4 million people. Sony and Time Warner will each have a 37 percent stake in the merged company. The balance will be held by Ft. Washington-based CDNOW, which has been losing market share to AMAZON.COM INC. The deal will do double-duty by giving media giants Sony and Time Warner bigger footholds in the on-line world.

JUSTSYSTEM CORP., the developer of the top-selling Japanese-language word- processing program, has agreed to license its search engine to WCOLLECT.COM, INC., an on-line marketplace specializing in authenticated fine art, entertainment collectibles and sports memorabilia. Concept Base, which is expected to be available to U.S. shoppers late this year, employs fuzzy logic to conduct searches rather than the keywords now typically used. At the same time, collectors in Japan will have access to's inventory of 100,000 collectibles. The Beverly Hills, California company believes that this expansion will generate revenues of $10 million to $15 million in the first six months.

As soon as yearend, an enterprising EXPRESSION TOOLS, INC. hopes to be shipping an English-language version of its Shade three-dimensional computer graphics package. The Fukuoka software developer plans to open a U.S. office and sign up a distributor for what it calls a very sophisticated 3D geometric modeling, rendering and animation program suitable for all levels of computer users.

An exchange rate of ¥120=$1.00 was used in this report.

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Success does not often elude SONY CORP., but it has in the North American wireless telephone handset market. By the end of September, the company will exit this business and let go about 200 engineering, sales and marketing employees at San Diego, California-based SONY ELECTRONICS, INC. Sony is an also-ran in the U.S. cellular phone market, in part because it did not start marketing here until 1995. Sales also were hurt by a recent recall and stiff price competition. Sony will continue to work on third-generation, or wideband CDMA (code-division multiple access), digital mobile phone technology. It also will remain a minority partner in QUALCOMM PERSONAL ELECTRONICS, a San Diego joint venture with QUALCOMM INC. that makes CDMA and PCS (personal communications services) phones.

MATSUSHITA COMMUNICATION INDUSTRIAL CORP. OF U.S.A. of Peachtree City, Georgia will develop and design special receivers for CD RADIO INC.'s satellite-to-car radio broadcast service. This will include as many as 50 channels of commercial-free, CD-quality music programming and up to 50 additional channels of news, sports and entertainment programming for an expected monthly subscription fee of $9.95. New York City-headquartered CD Radio expects to launch commercial operations at the end of 2000. Matsushita Communication Industrial will be one of several companies developing CD Radio receivers for factory installation by car and truck builders and for sale in the aftermarket. It currently makes automotive audio products for sale under the Panasonic brand.

In a contract win that should help it make up some ground on front-runners MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD. and SONY CORP. in the digital broadcast equipment field, HITACHI ELECTRONICS, LTD. will supply roughly $833,300 worth of studio cameras and related equipment to CBS CORP. The order covers five SK-3000P multistandard high-definition television-compatible portable cameras that feature a 2.2-million-pixel CCD (charge-coupled device). CBS will use the cameras in its Hollywood studios.

Industry sources report that KDD SUBMARINE CABLE SYSTEMS INC. and LUCENT TECHNOLOGIES INC. will join forces on a project designed both to lower the cost of laying undersea fiber-optic cable networks and to boost transmission speeds. The prospective partners, which will equally split the undertaking's estimated $83.3 million developments costs, hope to complete a test system by the summer of 2000 and expect commercialization to occur around 2002. One novelty of the proposed system is its seamlessness. Signal routers will be incorporated into terrestrial base stations rather than along the network. KDD-SCS and Lucent also are seeking a record- breaking transmission speed of 1 terabit per second. In comparison, the Japan-U.S. Cable Network now under construction across the Pacific initially will operate at 80 gigabits per second with the potential to be upgraded to 640 gigabits per second. KDD-SCS is the prime subcontractor on the competing Pacific Crossing-1 undersea fiber-optic cable network. It, too, will move data at a rate of 80 Gbps.

Expanding the menu of global network services available to its Japanese corporate customers, KDD CORP. is rolling out a frame-relay service in the United States. Its New York City subsidiary will lease capacity for the high-speed data communications system from American carriers.

An exchange rate of ¥120=$1.00 was used in this report.

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The innovative Viscotecs system for digitally printing fabrics has arrived in the United States. Developer SEIREN CO., LTD. has launched pilot production at the Kenilworth, New Jersey plant of its VISCOTEC USA LLC subsidiary. Viscotecs is designed for quick turnaround of customized batches of fabric. The system gives designers a virtually unlimited choice of colors, which can be printed on various types of fabrics, and the flexibility to change the design in midrun. The 3D imaging and mapping capabilities of the companion CAD (computer-aided design) system also offer designers a realistic preview of the print. Moreover, designs can be sent over the Internet or on disks. When commercial operations begin next year, Viscotec USA expects to print close to 36,000 square yards of fabric each month. Seiren's New York City office is marketing the printing process to makers of swimsuits, clothing and home furnishings. In time, it hopes to expand the market for Viscotecs to suppliers of automotive interiors.

An exchange rate of ¥120=$1.00 was used in this report.

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Although they compete at home in the production of automotive parts using powder metallurgy technology, NIPPON PISTON RING CO., LTD. and HITACHI POWDERED METALS CO., LTD. decided to cooperate in the United States on sintered-alloy valve seats. The major maker of piston rings and valve-train parts will provide its process and product technology to SINTERING TECHNOLOGIES, INC. of Greensburg, Indiana, a Hitachi Powdered Metals subsidiary that has made valve guides and other precision engine components since 1988. A new line for sintered valve seats is scheduled to open in May 2000. Cerritos, California-based NPR OF AMERICA, INC. will market the part. The output from Sintering Technologies presumably will replace some of the sintered valve seats that Nippon Piston Ring exports from Japan.

Three more automotive parts suppliers have reorganized their U.S. operations or plan to do so. TOYODA GOSEI CO., LTD., for instance, is transferring ownership of five North American businesses to TG NORTH AMERICA CORP., a Troy, Michigan holding company, in a move designed to improve efficiency, especially on the the marketing side, and to reduce taxes. Affected by the change are: TG MISSOURI CORP., which has made steering wheels, side molding and other plastic interior and exterior parts in Perryville, Missouri since 1987; TG KENTUCKY CORP. of Lebanon, Kentucky, a 1997 start-up that supplies the same general types of products; a Waterville, Quebec manufacturer of weather strip and similar trim parts; and TG TECHNICAL CENTER (U.S.A.) CORP., also located in Troy. CALIFORNIA AUTOMOTIVE SEALING INC. of Hayward, California will remain outside the holding company structure since Toyoda Gosei owns only 50 percent of this maker of weather strip and trim. Toyoda Gosei is projecting North American sales at $500 million this year and at $600 million in 2002.

For its part, tire valve manufacturer PACIFIC INDUSTRIAL CO., LTD. converted its Fairfield, Ohio subsidiary into a holding company. Under PACIFIC INDUSTRIES USA, INC. are PACIFIC INDUSTRIES AIR CONTROLS, INC., which is in charge of tire valve manufacturing and marketing, and PACIFIC MANUFACTURING OHIO, INC., which runs Pacific Industries' recently launched production of other small stamped automotive parts (see Japan-U.S. Business Report No. 354, March 1999, pp. 11-12), and provides engineering services, including parts design. Both of these companies are located in Fairfield. The Pacific Industries plant opened in 1989.

Before yearend, AISIN SEIKI CO., LTD. will realign its North American manufacturing operations to give its four American plants and two Mexican ones more discrete responsibilities. AISIN U.S.A. MANUFACTURING, INC. will specialize in body parts, specifically door frames and sunroofs, as will the pair of Mexican factories. The brake components made by Seymour, Indiana-based Aisin U.S.A. since it became operational in 1988 will be transferred to AISIN DRIVETRAIN, INC. of Crothersville, Indiana, which has made drivetrain components for the last two years. Engine parts will be shifted to AISIN AUTOMOTIVE CASTING, INC. This London, Kentucky company, operational since the spring of 1998, makes die-cast aluminum engine parts, especially water pumps. AISIN ELEC-TRONICS, INC. of Stockton, California, which started up in the summer of 1997, will continue to produce ECU (electrical control unit) sensors and other electronic parts. Much of Aisin Seiki's North American business, which totaled around $458.3 million in the year through March 1999 and are projected at $583.3 in FY 2005, is generated by TOYOTA MOTOR CORP. affiliates, although the company is pursuing other Japanese-affili-ated vehicle builders and the Big Three.

In an acquisition that bolstered its ability to provide a total transmission sealing package to automotive makers, FREUDENBERG-NOK, an NOK CORP. affiliate, bought FARNAM*MEILLOR for an undisclosed price. The Troy, Michigan company, which manufactures gaskets in Necedah, Wisconsin, will become part of Freudenberg-NOK's recently established Automotive Sector. This transaction occurred at almost the same time that the Plymouth, Michigan-headquartered firm signed an agreement with FORD MOTOR CO. to supply all seals for a future transmission.

In a recent contract award, NISSAN MOTOR CO., LTD. tapped DELPHI AUTOMOTIVE SYSTEMS CORP. to provide steering gears for all the trucks it builds in Smyrna, Tennessee, including the Xterra and the Frontier, starting with 2000 model year production. The world's largest parts manufacturer invested $15 million in tooling at a Saginaw, Michigan plant to supply the Nissan order for Steer-Lite gears. .....Starting next spring, the complete suspension of the Accords built by HONDA MOTOR CO., LTD. in Marysville, Ohio will be supplied by ERNIE GREEN INDUSTRIES, INC. That Marion, Ohio company will spend $18 million to build a plant to produce Accord axle shafts, struts, shocks and knuckles.

With the North American market for car navigation systems expected to take off early in the next decade, AISIN AW CO., LTD., one of Japan's larger makers of this equipment, could start U.S.-bound exports as soon as the end of 1999. The Nagoya company plans to supply the systems to the factories of both Japanese and American vehicle manufacturers as well as to retailers for aftermarket installation. Aisin AW has set its sights on winning 15 percent to 20 percent of the North American market for car navigation systems.

The advice that JAPAN MANAGEMENT ASSOCIATION CONSULTANTS INC. has provided to FORD MOTOR CO. dealerships in Europe since 1992 has proved so valuable that the two companies will formalize their relationship. They will establish a joint venture to provide consulting services to Ford operating units and to Ford dealerships in North America, Latin America, Europe and Southeast Asia. JMAC will have a 49 percent interest in JMAC AUTOMOTIVE DISTRIBUTION GROUP, which will start operations in Amsterdam by yearend and in Detroit by next March. Ford executives say that JMAC has helped the company's European dealers improve cost controls, delivery times and quality. For now, the joint venture will not cover Ford operations in Japan, South Korea or China since the Japanese management consultant already has a presence in these markets.

JAMCO CORP. will continue to be the exclusive supplier of lavatories for BOEING CO.'s 747, 767 and 777 passenger aircraft for five more years starting January 1, 2000. The contract, which could be worth as much as $250 million, extends a relationship that dates back to 1980. JAMCO, the world's biggest supplier of aircraft lavatories, has had a factory in Everett, Washington, near Boeing's assembly facilities, since 1982.

An exchange rate of ¥120=$1.00 was used in this report.

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CASIO COMPUTER CO., LTD. reorganized its U.S. operations, creating a holding company for its various marketing units and CASIO CORP. OF AMERICA, which is responsible for administration, personnel and financing for the sales subsidiaries. These include Dover, New Jersey-based CASIO, INC., a marketer of calculators, watches, electronic musical instruments and handheld computers; CASIO PHONE- MATE, INC. of Torrance, California, which sells telephone-related equipment; and CASIO MANUFACTURING CORP. of San Diego, California, which makes electronic musical instruments in Mexico.

By expanding its mail-order business and naming a distributor, MITSUBISHI MATERIALS CORP. believes that it can substantially build up sales of clay containing precious metals over the next five years. At the end of that period, PETROGLYPH INC. of Santa Cruz, California expects to be running 500 ceramics classes at which students use the clay. Mitsubishi Materials also will devote more resources to the mail order business in the hope of boosting revenues to $20.8 million in 2004.

All English-language sales and service literature for KOMATSU LTD.'s global operations will be produced by DATAKOM PUBLISHING CORP. Headquartered in Vernon Hills, Illinois with offices in Peoria, Illinois and Norcross, Georgia, DataKom is owned by KOMA-TSU AMERICA CORP. (80 percent) and KIP LTD. (20 percent), a wholly owned subsidiary of the world's second-largest supplier of construction and mining equipment. It will take over the technical literature resources of KOMATSU AMERICA INTERNATIONAL CO., the manufacturer and marketer of the Komatsu, Dresser and Galion lines of hydraulic excavators, wheel loaders, crawler bulldozers and motor graders; KOMATSU MINING SYSTEMS, INC., which produces and sells the Komatsu, Haulpak, Demag and Modular Mining lines; and KOMATSU UTILITY CORP., which markets Komatsu's backhoe loaders and compact excavators, wheel loaders and bulldozers. All of these companies are headquartered as well in Vernon Hills. DataKom also will be responsible for the creation and worldwide distribution of all English-language materials currently produced in Japan.

An exchange rate of ¥117=$1.00 was used in this report.

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American Companies in Japan


In an agreement that could be worth as much as $10 million over the next year, SOUTHWALL TECHNOLOGIES INC. is supplying antireflective film to MITSUBISHI ELECTRIC CORP. to coat flat CRT (cathode-ray tube) computer monitors made in Japan as well as in Mexico. The film is made at Southwall's headquarters plant in Palo Alto, California and at a Tempe, Arizona factory.

With the installation of a dedicated line at the Yamagata prefecture factory of its manufacturing subsidiary, SUMITOMO 3M LTD. can make a protective film for vehicle windows that it has been importing from its American parent. Scotchtint Auto Panther Film blocks ultraviolet and infrared rays as well as keeps interiors cooler in hot weather. It also helps to prevent the glass from breaking into dangerous shards in case of an accident. Coating the side windows as well as the rear window of a car or truck costs roughly $290, including installation. Sumitomo 3M is looking for first-year Scotchtint Auto sales of $4.2 million.

UNION CARBIDE CORP. did about $133.3 million worth of business in Japan in 1998. In three years, it wants to boost that total to at least $166.7 million. One key to the expansion is the introduction of the Danbury, Connecticut-headquartered firm's ethylene-propylene rubber. Used for single-ply roofing materials, automotive hose, tubing and gaskets, tire sidewalls and wire and cable jackets, the compounds, trademarked ElastoFlo polymers, are delivered to manufacturers in a unique, free- flowing granular form. That makes them easier to handle and use. Union Carbide says that this form also means shorter mixing cycles, better dispersion, lower energy requirements and reduced waste disposal. The company's ethylene-propylene rubber plant in Seadrift, Texas came onstream at the end of 1998.

With more people experiencing problems from what is called indoor air pollution, which is caused by the release of chemicals from paints, construction materials and furnishings, AMERICAN FORMULATING AND MANUFACTURING hopes to find a ready market for its primers, paints and stains. Its Safecoat products contain no hazardous or toxic materials and keep so-called offgassing to minimal levels. Recently named distributor TECHNOTOOLS TOKAI CO., LTD. of Gifu prefecture is carrying some 30 Safecoat products, including water-based enamel, flat, eggshell, semigloss and cabinet and trim paints and furniture stains. San Diego, California-based AFM expects sales to reach $833,300 in the first year of marketing.

A variety of medium-grain rice that has been genetically engineered to tolerate the application of MONSANTO CO.'s widely used but nonselective Roundup herbicide is undergoing field trials at the chemical company's research farm in Ibaraki prefecture. If the Ministry of Agriculture, Forestry and Fisheries approves the product as safe, Roundup Ready rice could be marketed as early as FY 2000, giving rice growers a way to control weeds more effectively during the growing season while using less herbicide on average.

The strong growth in Japan's over-the-counter drug market that MERCK & CO., INC. expected in late 1996 when it formed a company with CHUGAI PHARMACEUTICAL CO., LTD. to develop and sell OTC products has not materialized despite Tokyo's interest in controlling health-care spending. Accordingly, the big American pharmaceutical company will sell its 40 percent stake in CHUGAI MSD CO., LTD. to its partner. The timing of the breakup of the money-losing joint venture, which had 1998 sales of approximately $15 million, has not been finalized, but it will occur before March 31, 2000. Merck will continue to be a major player in Japan's prescription drug market through its majority ownership of BANYU PHARMACEUTICAL CO., LTD.

PHARMACIA & UPJOHN, INC.'s subsidiary has two new prescription drugs on the market. Migsis Tablet (lomerizine hydrochloride) is indicated for the treatment of migraine headaches, a problem thought to affect between 7 million and 8 million Japanese, nearly 90 percent of whom go without treatment. The only calcium antagonist approved for migraines in Japan, Migsis is designed to prevent attacks rather than control them, the typical response. KANEBO, LTD. first synthesized the calcium antagonist used in Migsis and helped P&U's subsidiary to develop the compound. Likewise, KISSEI PHARMACEUTICAL CO., LTD. participated in the development of Cabaser Tablets (cabergoline) for the Japanese market. This treatment for early-stage Parkinson's disease and advanced Parkinson's disease when combined with levodopa was discovered by P&U. Cabaser belongs to the class of drugs known as dopamine agonists that stimulate dopamine receptors in the brain by mimicking the effects of dopamine. A major advantage of Cabaser, which is manufactured locally by P&U and sold by Kissei Pharmaceutical, is that it can be administered once a day rather than three times daily like other dopamine agonists.

The Ministry of Health and Welfare's new fast-track evaluation process for innovative HIV therapies will get an early test. KISSEI PHARMACEUTICAL CO., LTD. has filed for approval of Prozei (amprenavir), an orally administered HIV protease inhibitor that was discovered by VERTEX PHARMACEUTICALS INC. and developed and commercialized for the Japanese market by the Cambridge, Massachusetts company and its partner over the last six years. Known outside Japan by the trade name Agenerase, Prozei is indicated in combination with other antiretroviral agents for the treatment of HIV infection. Vertex and Kissei Pharmaceutical continue to collaborate on the development of VX-745, a p38 MAP kinase inhibitor for the treatment of inflammatory diseases (see Japan-U.S. Business Report No. 347, August 1998, p. 2).

TRANSDUCTION LABORATORIES of Lexington, Kentucky awarded FUJISAWA PHARMACEUTICAL CO., LTD. exclusive rights to market its line of cell biology reagents in Japan. These products, which complement the Japanese drug firm's flow cytometry reagents, mainly employ immune reactions (antigen versus antibody reactions) and are used to analyze intracellular mechanisms. TDL, which specializes in the development of monoclonal antibodies for the cell biology area, is a BECTON DICKINSON AND CO. affiliate.

Building on an earlier agreement (see Japan-U.S. Business Report No. 354, March 1999, p. 13), PARACELSIAN, INC. gave KUBOTA CORP. the go-ahead to further develop its patented dioxin test for use in screening samples of ash from municipal waste incinerators in Japan. The Ithaca, New York company bills its Ah Immunoassay as an highly accurate yet quick and inexpensive way to measure dioxin in incinerator ash. It also can be used to detect dioxin and dioxin-like compounds in food, soil, water and even blood.

An exchange rate of ¥120=$1.00 was used in this report.

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In its latest business-expansion initiative, HEWLETT-PACKARD JAPAN LTD. is offering corporations the chance to cut hardware operating and maintenance costs by integrating the functions performed by multiple networked PCs and Unix servers into a single, high-end Unix server. The company has enlisted the help of HITACHI, LTD., MITSUBISHI ELECTRIC CORP., NEC CORP. and OKI ELECTRIC INDUSTRY CO., LTD. in offering the service since they often sell HEWLETT-PACKARD CO. Unix-based computer equipment on an original equipment manufacturer basis. HP Japan believes that the new business will bring in revenues of $33.3 million in the first year.

Buyers of workstations, servers and supercomputers from the on-the-move subsidiary of SILICON GRAPHICS, INC. now can sign up for worldwide maintenance service. Available 24 hours a day, 365 days a year, Global Service comes with a guaranteed turn-around time. Moreover, three levels of support are available.

Frustrated by its seventh-place standing in Japan's PC market, COMPAQ COMPUTER CORP. has launched direct sales over the Internet as a complement to its retail channel sales. A new family of Prosignia servers, desktop systems and notebooks is available exclusively through Compaq DirectPlus. Orders, which also can be placed by phone, will be built to buyers' specifications at Compaq's Tokyo-area plants. Although it runs its own call centers, the company decided to outsource Compaq DirectPlus call-center operations to big telemarketer BELLSYSTEM24 INC. In time, Compaq hopes that Internet sales will generate 10 percent of its Japanese business.

People interested in customizing their APPLE COMPUTER, INC. Macintosh Server G3 and Power Macintosh G3 desktop machines (see Japan-U.S. Business Report No. 358, July 1999, p. 16) can do so at the Apple Store on the company's Web site. The equipment is assembled at Apple's Singapore factory and shipped directly to buyers. The process takes two weeks at most.

In the latest demonstration that the company remains committed to supporting the customer base it inherited with the purchase of Digital Equipment Corp., COMPAQ COMPUTER CORP. rolled out a pair of Alpha-based workstations. The latest performance enhancement to the AlphaStation XP1000 boosts its speed above the 600-MHz barrier thanks to the new 667-MHz Alpha 21264 (EV67) chip. Built for designers and engineers who use RISC-based systems and require top 3D workstation application performance, a Tru64 Unix system with a single Alpha 667- MHz processor, 128 MB of memory, a 9.1-GB hard drive, 4 MB of cache and entry- level graphics costs just $15,100. Even more affordable at $9,600 is the AlphaStation XP900 for OpenVMS applications developers and system managers. It is the first high- performance Compaq workstation to feature the new 466-MHz Alpha 21264 (EV6) processor.

Windows NT-based workstation users seeking greater performance now can tap the power of the 550-MHz Pentium III Xeon processor in the HP Kayak PC Workstation line from HEWLETT-PACKARD JAPAN LTD. The release of the seven new models coincided with an average price cut of 38 percent on HP Kayak products with the 500- MHz version of the Pentium III Xeon chip.

Companies requiring extremely high levels of data availability for such critical applications as enterprise resource planning, on-line transaction processing and Web hosting have new two-node Microsoft Cluster Server clustering options available from COMPAQ COMPUTER CORP. in the form of the Compaq ProLiant Cluster HA/F500 and the Compaq ProLiant Cluster HA/F200. Both systems can be built with a variety of ProLiant servers. The storage system for the HA/F200 is the Compaq StorageWorks RAID Array 4000 (formerly known as the Compaq Fibre Channel Storage System), while the HA/F500 uses the new StorageWorks RAID Array 8000 and the Enterprise Storage Array 12000 high-end optical Fibre Channel external storage subsystem and storage systems to meet specific requirements. For greatest protection, the systems can be configured with a dual-loop connection between the server and the storage subsystem. With two ProLiant servers, pricing starts at $72,800 for the HA/F200 and at $428,800 for the HA/F500.

COMPAQ COMPUTER CORP.'s subsidiary also has brought the performance- enhancement powers of the 550-MHz Pentium III processor to its mainstream line of ProLiant servers. Pricing ranges from $3,600 for the ProLiant 800 workgroup server to $5,400 for the ProLiant 1600 and on to $6,500 for the rack-mounted ProLiant 1850R, topping out at $7,200 for the midrange ProLiant 3000. At the same time, the Compaq marketing unit added two products to the low-cost ProLiant line that it calls Advantage PAQ. The ProLiant 400 6/450 Advantage PAQ, listing for just $1,700, features a 450- MHz Pentium II processor, while the $5,500 ProLiant 1600 6/500 Advantage PAQ workgroup server draws on the performance capabilities of the 500-MHz Pentium III engine.

Sales to date indicate that a market exists in Japan for equipment running the Linux operating system. To tap that demand, particularly among small businesses, IBM JAPAN LTD. has tied up with 10ART-NI CORP. and OTSUKA SHOKAI CO., LTD. to deliver complete solutions based on the freeware version of Unix. 10art-ni will combine IBM Japan's low-cost Netfinity 1000 servers with dial-up routers and uninterruptible power supplies for marketing by Otsuka Shokai. The PC retailer, which has priced the package from $3,000, is projecting sales around 2,000 units a year. Including support and training, the trio believes that this new business can produce annual revenues on the order of $33.3 million.

With Japan's PC market expanding strongly, American competitors are tweaking their product lineups to capitalize on this growth. The repositioning involves not just introducing products with all the latest bells and whistles for the corporate or the home market but also catering to the demand for compact, Japan-tailored products and to value-conscious buyers. For instance, COMPAQ COMPUTER CORP. unveiled the Deskpro EN SF Series, a line of small form-factor commercial PCs for crowded environments that is said to take up 36 percent less space than conventional desktop PCs without compromising performance. The 20 Deskpro EN SF models are split equally between machines powered by a 466-MHz Celeron processor and those with a 550-MHz Pentium III chip. Buyers have a choice of 64 MB or 128 MB of SDRAM and a 6.4-GB or a 10-GB SMART II Ultra ATA hard drive. A 24X slimline CD-ROM is optional, as is 13.5 GB of storage. An integrated network controller and graphics accelerator are included in the starting price of $1,200. .....Taking the small form-factor idea another step, COMPAQ COMPUTER CORP.'s subsidiary introduced the Presario 3500, a line designed specifically for Japan that occupies 70 percent less space than typical desktops. A representative model, the Presario 3505, comes with a 400-MHz Celeron processor, 64 MB of internal memory and a 6.4-GB hard drive for about $1,200 excluding a monitor.

Direct marketer DELL COMPUTER CORP. also thinks that a reduced footprint will sell desktop systems to companies. Its new OptiPlex GX1 line, the company's first such product, is 44 percent smaller than its predecessors. The Model 450S features a 450-MHz Pentium III chip, 64 MB of RAM and a 6.4-GB hard drive. It lists for $1,200, again without a monitor. For IT managers who are just as interested in price as in compactness, Dell's subsidiary is offering a space-saving machine that starts at $830 without a display. The OptiPlex GX100 runs off a 400-MHz Celeron engine.

Fellow direct seller GATEWAY 2000, INC. is aiming at the high end of the desktop market with the latest addition to the Profile line of stylish, space-saving, all-in-one equipment. The XL, which costs $2,100, comes with Office 2000 Personal preinstalled. It also features a wireless keyboard. .....Bringing to Japan a strategy that has attracted first-time buyers in the United States, GATEWAY 2000, INC. is selling a system that includes one year of free Internet access in its affordable price of $915. The GP6-400C has a 400-MHz Celeron processor and a 15-inch display.

Going after the high end of the corporate market, HEWLETT-PACKARD JAPAN LTD. added to its NetVectra family five models running the Japanese-lan-guage version of Windows NT Workstation 4.0. Priced from $1,700 to $2,400, including a network interface adapter, the machines range from a system with a 400-MHz Celeron chip to one powered by a 450-MHz Pentium III processor and providing 8.4 GB of disk storage.

IBM JAPAN LTD. has redefined the top of its mainstream PC 300PL desktop/minitower line with the release of a model sporting a 550-MHz Pentium III processor and including a 13.5-GB hard drive. Pricing starts at $2,400. .....Office 2000 Personal is being preinstalled on six of IBM JAPAN LTD.'s home-targeted Aptiva models. These machines list for $1,700 and up. The software package also is a selling point of three new ThinkPad notebook computers that have been beefed up in other ways as well. For example, the ThinkPad 600E, which IBM Japan is selling direct for $3,600, features a 400-MHz mobile Pentium II processor, a 13.1-inch TFT LCD display, a 10- GB hard drive, a DVD-ROM drive and a video-out port. For more budget-minded corporate buyers, there is the $2,000 ThinkPad 390E with a 366-MHz mobile Celeron chip, a 12.1-inch TFT LCD screen and 4.8 GB of storage.

By introducing a notebook computer that costs just $1,400, COMPAQ COMPUTER CORP. hopes to make inroads among Japanese who might be interested in buying a computer but do not feel that they have space for a desktop model. The company was able to hold down the price of the Presario 1245 by using a 333-MHz AMD-K6-2 processor and installing a smaller-than-normal 32 MB of internal memory and a 3.2- GB hard drive. However, the machine has a CD-ROM drive and comes with e-mail software.

For anyone in the business world who worries about the security of the information stored on his or her notebook's hard drive should the machine be lost or stolen, COMPAQ COMPUTER CORP. has a solution. Five new Armada notebook models feature the company's DriveLock password-protection technology. These products range from the $2,000 Armada M300, which has a 333-MHz mobile Celeron processor, up to the Armada E700, a machine with a 400-MHz mobile Pentium II chip that lists for $5,700.

The world's leading provider of enterprise storage systems and related software and services is taking a number of steps to ensure that this distinction extends to the Japanese market. For starters, EMC CORP. opened a customer service facility in Tokyo to provide corporations using its equipment with 24x7 technical support. The center, which is linked to the company's major support hubs at headquarters in Hopkinton, Massachusetts and in Cork, Ireland, also is providing product validation, new product qualification and sales support to customers. The opening of the support center is one reason that EMC's subsidiary is projecting an increase in staffing in 1999 to 400 from about 260, but the company also wants to hire more systems engineers and sales people. Additional software developers are expected to be hired as well for EMC's Japan Technology Center. Set up last November, this facility has just been moved to Kawasaki in Kanagawa prefecture.

In an aggressive move by INTERNATIONAL BUSINESS MACHINES CORP. to recapture its former leadership position in disk storage, the company rolled out the IBM Enterprise Storage Server in Japan and elsewhere. Of its many selling points, IBM is touting in particular the system's ability to work with heterogeneous hosts — S/390 mainframes/servers, Unix platforms, Intel-based systems running Windows NT or in a NetWare environment and AS/400 — and with a variety of interfaces, including ESCON, Fibre Channel and Ultra SCSI. ESS, which pointedly was code-named Shark, can scale from 420 GB to more than 11 terabytes, a record capacity, according to IBM. Its performance is enhanced by two four-way SMPs (symmetric multiprocessors), the Serial Storage Architecture and a large cache with additional battery-backed memory. IBM JAPAN LTD. priced the base configuration of the Enterprise Storage Server at $516,600.

Market newcomer XIOTECH CORP. gave KANEMATSU ELECTRONICS LTD. nonexclusive rights to distribute its centralized storage subsystem and supporting REDI software family. Dubbed a SAN (storage area network) in a Box, the Eden Prairie, Minnesota manufacturer's MAGNITUDE provides up to 3 terabytes of centralized storage that can be continuously accessed by several heterogeneous servers.

CASTLEWOOD SYSTEMS, INC. added FUJIKURA LTD. as a manufacturer of the 2.2- GB ORB drive and ORB media. As part of the deal, the Japanese producer of electric wire and cable invested $3 million in Castlewood, acquiring a 10 percent stake in the Pleasanton, California company. Fujikura will make the ORB drive, the world's first removable hard drive to use magnetoresistive head technology, at a Thai subsidiary. It is targeting initial output of at least 20,000 units a month and full-capacity production of more than 1 million units in 2001. The ORB drive is marketed exclusively in Japan by SHINNICHI ELECTRONICS CORP. (see Japan-U.S. Business Report No. 358, July 1999, p. 16).

By the end of the year, QUANTUM CORP. and HITACHI MAXELL, LTD. hope to commercialize a digital linear tape drive that can deliver 100 GB (uncompressed) of storage capacity per cartridge with a fast 10-megabits-per-second data transfer rate — more than enough to meet the backup, archival and disaster recovery requirements of midrange servers. The Milpitas, California company is responsible for the tape drive, while its development partner is handling the media cartridge. Providing the foundation for the Super DLTtape system are several tape-drive technical breakthroughs made by Quantum that in time could bring about a storage capacity of 500 GB (uncompressed) per cartridge with a transfer rate of up to 40 Mbps.

GIGANET, INC. signed ITOCHU TECHNO-SCIENCE CORP. to distribute its server clustering solution in Japan and elsewhere in Asia. cLAN server cluster interconnects link Intel architecture-based servers, enabling them to synchronize and replicate information at high speeds with what the Concord, Massachusetts manufacturer says is little or no performance penalty. Moreover, the product's plug-and-play capabilities enable firms to scale clustered servers incrementally and transparently. In Japan, cLAN pricing starts at $20,700.

It now is possible for PC users to operate their machines with one hand, thanks to the Cut Key keyboard from the subsidiary of Fremont, California-based LOGITECH, INC. The small-footprint product has just 22 keys that are arranged like an adding machine, but these keys perform all standard PC keyboard functions. Cut Key costs $125.

LCD module maker THREE-FIVE SYSTEMS, INC. tapped MITSUI & CO., LTD. to facilitate its entry into the Japanese market. The marketing, sales and distribution agreement covers all three of the Tempe, Arizona firm's advanced display products in or nearing production. Both companies think that Three-Five's LCoS (liquid crystal on silicon) microdisplay technology, which is scheduled for production during the first quarter of 2000, might have the greatest near-term market potential. Mitsui will market this thumbnail-size display that delivers the resolution of high-definition television screens for such applications as rear-projection systems, cellular telephones, personal information appliances and portable multimedia terminals. Other possible uses for the microdisplay are HDTV sets and computer monitors, especially large-screen products.

Hoping to take sales away from SEIKO EPSON CORP. and CANON INC. in the SOHO (small office/home office) ink-jet printer market, LEXMARK INTERNATIONAL, INC.'s subsidiary introduced the Z series. This line offers the same image quality, printing speeds and other functions as the entrenched competition's products, but they are more affordable. The high-end Z51 already is on the market; it lists for $415. This fall, the Z11 will be on store shelves. It is a replacement for last year's low-end CJP1100. With the launch of the aggressively priced Z series, Lexmark believes that it can sell 150,000 ink-jet printers in 1999, triple the 1998 total.

The lightest and smallest projector ever built by INFOCUS SYSTEMS, INC. will be available in September from ADVANCED PERIPHERALS TECHNOLOGIES, INC. The LP330 "Dragonfly" weighs just 4.8 pounds and is the size of a hardback book, yet it provides a true XGA (extended graphics array) resolution of 1024 x 768 pixels bright images and true-to-light colors with its DLP (digital light processing) display. APTi is a Fujisawa, Kanagawa prefecture-based joint venture between IBM JAPAN LTD. and TOSHIBA TEC CORP. InFocus recently agreed to provide its ultraportable projectors to TOSHIBA CORP. on an OEM basis (see Japan-U.S. Business Report No. 358, July 1999, p. 17).

An exchange rate of ¥120=$1.00 was used in this report.

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In other sign that knowledgeable investors believe that commercial property prices are nearing the end of their long and steep fall or already have hit bottom, STARWOOD CAPITAL GROUP — a Greenwich, Connecticut investment management firm that invests in real estate assets on behalf of institutional investors and wealthy individuals — formed a joint venture with NOMURA REAL ESTATE DEVELOPMENT CO., LTD. to buy midsize Tokyo office buildings. The new partners already have acquired three office buildings with a combined value of more than $65 million through a special- purpose vehicle set up to channel all their investments. In addition to the money that Starwood Capital and Nomura Real Estate Development put up themselves, the venture will have access to nonrecourse financing from GMAC COMMERCIAL MORTGAGE CORP. and NIKKO SALOMON SMITH BARNEY LTD. Industry sources say that the total invested could hit $250 million.

The third AMC ENTERTAINMENT INC. megaplex movie theater has opened. The 18- screen AMC Holiday Square 18, located in Toyohashi, Aichi prefecture, is the Kansas City, Missouri company's largest facility in Japan. Two more megaplexes — the AMC Shinsei 16 in Gifu prefecture and the AMC Maihama 16 at Tokyo Disneyland in Chiba prefecture — are scheduled to open in the spring of 2000 (see Japan-U.S. Business Report No. 350, November 1998, p. 16).

An exchange rate of ¥120=$1.00 was used in this report.

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HONEYWELL INC., a world leader in the fields of home and building controls and industrial automation equipment, slowly is putting together a replacement marketing network for the one lost when it parted ways with YAMATAKE CORP. in late 1997 (see Japan-U.S. Business Report No. 358, July 1999, p. 17). In its biggest move to date, the Minneapolis manufacturer named MATSUSHITA ELECTRIC WORKS, LTD. as the exclusive distributor of its air-conditioning controls. The sales tie-up could lead to joint product collaboration, sources say.

A more energy-efficient fluorescent bulb for stores and offices will be released soon by HITACHI GE LIGHTING, LTD. The equally owned venture between GENERAL ELECTRIC CO. and HITACHI, LTD. says that when the 7.5-foot-long, 110-watt FHF86EX-N bulb is used with an inverter, power consumption is 22 percent less than with other products in this category. That savings, the company hopes, will help it sell 240,000 bulbs a year. For several years, Hitachi GE Lighting has been trying to boost the commercial/industrial side of its business, where GE is strong.

The IEEE 1394 standard for enabling the convergence of computing, consumer electronics and networking technologies is starting to take hold in Japan. One sign of this is the decision by ZAYANTE, INC. (formerly Firefly, Inc.) to convert its Tokyo representative office, which was set up last year, into a subsidiary. The Scotts Valley, California company provides complete 1394 interoperability solutions through hardware (silicon intellectual property), software and testing products and services. Its goal is to help manufacturers develop 1394-compliant product designs cost-effectively, accurately and quickly. Zayante's subsidiary is looking for revenues of $833,300 in its first year of operation.

The subsidiary of big connector maker MOLEX INC. has developed a 1394-compatible product for plastic-encased fiber-optical equipment that can handle data transmissions among diverse electronics products at speeds up to 400 megabits per second, the target for the current version of the standard. Designed for video cameras, videocassette recorders and other digital home appliances, the compact connector should be on the market by yearend. With the backing of seven Japanese consumer electronics giants, Lisle, Illinois-headquar-tered Molex is trying to make its connector the industry standard.

By the end of 1999, LITTELFUSE, INC.'s subsidiary expects to be selling its product line directly to Japanese automotive makers and their parts suppliers. Since the Des Plaines, Illinois producer opened a subsidiary in Yokohama in 1997, electronic parts trader PICO, INC. has been in charge of distribution. This Tokyo company will continue to market Littelfuse's fuses for electronic devices even after the U.S. firm takes over sales of automotive fuses. One focus of Littelfuse's new marketing team will be value- added products, such as fuses for electric and hybrid vehicles. The subsidiary also has enlisted the help of FUJIX K.K., a Tokyo vehicle parts maker and distributor, to develop the aftermarket for its fuses.

The marketing unit of Andover, Massachusetts-basedVICOR CORP., the largest merchant manufacturer of high-density power components, is projecting first-year sales of $4.2 million for its second-generation, 48V input family of DC-DC converter modules. Developed for communications and other distributed power systems, the new converter products are said to provide better performance and greater reliability as well as cost advantages. Three package sizes — micro, mini and maxi — are available at prices ranging from $105 to $215.

For years, SAWYER RESEARCH PRODUCTS, INC., one of the world's largest quartz crystal growers, has shipped what is called bulk-wave quartz directly to customers in Japan. Recently, though, the Eastlake, Ohio-headquartered company opened a sales office in Yokohama. That move was part of its decision to try to tap the market for wafers for SAW filters, which are used in the fast-growing mobile communications equipment business. Buyers of quartz for SAW filters require after-sale follow-up, however, hence the sales office. Sawyer Research, which has roughly 30 percent of the world market for quartz SAW wafers, hopes to capture 10 percent of the Japanese market for this product within a year. Adding in wafers made from such new materials as lithium tantalate and langasite, the target is 15 percent.

An exchange rate of ¥120=$1.00 was used in this report.

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To the surprise of virtually no one in the know, CALTEX CORP. has decided to end its 50-year participation in Japan's oil-refining industry. The slow growth of the oil business and the elusiveness of profits were the decisive factors. The joint venture of CHEVRON CORP. and TEXACO INC. agreed to sell its half interest in refiner KOA OIL CO., LTD. to NIPPON MITSUBISHI OIL CORP., Japan's top distributor of oil products and the sole marketer of the midsize refiner's output, for roughly $217.8 million. Koa Oil, in which Caltex has been the majority owner since 1951, operates a 127,000- barrel-per-day refinery in Marifu, Yamaguchi prefecture and a 125,000-barrel-per-day refinery in Osaka. In FY 1998, it lost $88.3 million. A three-year restructuring program now is underway. Despite the sale of its stake to Nippon Mitsubishi Oil, which currently owns 5.8 percent of the refiner, Caltex will continue to supply crude oil to Koa Oil. The company's coming exit from Japan's oil-refining industry was signaled in March 1996 when Caltex sold its 50 percent share in NIPPON PETROLEUM REFINING CO., LTD. to one of the firms that formed Nippon Mitsubishi Oil this past spring. With the completion of the sale of Koa Oil, scheduled for late August to mid-September, Caltex's business in Japan will be limited to lubricants.

An exchange rate of ¥120=$1.00 was used in this report.

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Two more transpacific alliances are convinced that the complete deregulation of brokerage fees, coming October 1, will create a surge of interest in on-line trading. One tie-up involves MICROSOFT CORP. with ITOCHU CORP., DAI-ICHI KANGYO BANK, LTD., ASAHI MUTUAL LIFE INSURANCE CO. and perhaps other companies in JAPAN ONLINE SECURITIES, INC. As early as this fall, the joint venture will offer round-the-clock securities trading via a Web site as well as by phone or fax; other means, such as interactive television, could be used in the future. All the details have not been finalized, but trader Itochu apparently will be the majority owner of Japan Online Securities, which is aiming for 300,000 brokerage accounts in five years. The other grouping pairs WIT CAPITAL GROUP, INC. with MITSUBISHI CORP. and TRANS COSMOS INC. (see Japan-U.S. Business Report No. 359, July 1999, p. 18). The two Japanese companies will put up $8.6 million to capitalize WIT CAPITAL JAPAN, INC. The New York City partner, the first on-line investment banking firm, will own 60 percent of the joint venture and contribute its expertise to the business. Wit Capital Japan, which hopes to be operational early in 2000, will develop electronic brokerage services using the Internet and the Web to offer individual investors the chance to invest in public offerings by Japanese companies and in domestically organized venture capital funds. The new company also will provide a variety of investment banking services to firms developing Internet businesses. Japan Online Securities and Wit Capital Japan will be competing for on-line brokerage customers with companies backed by E*TRADE GROUP, INC., a DONALDSON, LUFKIN & JENRETTE INC. affiliate and CHARLES SCHWAB & CO., INC.

Add sales of investment trusts (Japanese-style mutual funds) to the already long list of financial services that GE CAPITAL CORP. provides in Japan. GE ASSET MANAGEMENT CORP. will be the sponsor of the GE Japan Equity Focus fund, which will invest in anywhere from 20 to 40 Japanese stocks. This company was formed after GE Capital acquired an investment advisory firm as part of its March 1998 agreement to come to the rescue of TOHO MUTUAL LIFE INSURANCE CO. The GE Japan Equity Focus fund will be sold through NIPPON GLOBAL SECURITIES CO., LTD. as well as over the Internet and via other channels.

FIDELITY INVESTMENTS JAPAN LTD. will have a complete package of services ready for companies whenever the government authorizes 401(k) or defined- contribution pension plans. The go-ahead is expected sometime during FY 2000. Fidelity not only will manage the money that employees put into their retirement accounts but also will handle all the paperwork and other administrative tasks for the plan sponsor and educate people about the new retirement vehicle. The world's largest mutual fund manager will face considerable competition in this part of the financial services market, however, since any number of Japanese companies plan to move into the defined-contribution pension plan business.

J.P. MORGAN TRUST BANK LTD. is marketing to corporate pension plan administrators an actively managed international mutual fund that uses stock and bond futures contracts to achieve a target return of nearly 9 percent. The MORGAN GUARANTY TRUST CO. affiliate recommends the fund to companies that normally divide their pension plan assets among a number of money managers to minimize the downside risk.

The first multimanager funds for individual investors are available in Japan. Tacoma, Washington-based FRANK RUSSELL CO. is providing these risk-re-ducing investment products under an agreement earlier this year with BANK OF TOKYO- MITSUBISHI, LTD. (see Japan-U.S. Business Report No. 355, April 1999, p. 17). Forty-eight of the top commercial bank's branches now offer the M-CUBE Russell Investment Program. It should be an option at all 327 of Bank of Tokyo-Mitsubishi's nationwide offices by yearend. Specially trained bank representatives help clients with asset allocations and recommend portfolios of multimanager funds based on their investment objectives and risk tolerance.

Foreign expertise still is much in demand by Japanese financial services providers interested in offering investment trust products to their clients. For example, WELLINGTON MANAGEMENT CO., L.L.P. is working with TOYO TRUST & BANKING CO., LTD. on a diversified international fund. The Boston investment manager currently oversees the trust bank's U.S. stock investments. Similarly, BEAR STERNS ASSET MANAGEMENT INC. helped SAISON INTEX CORP. to create a foreign currency-denominated investment trust fund. The American firm is responsible for investing the fund's assets in foreign bonds with input from the member of the CREDIT SAISON CO., LTD. group.

The first product that CITIGROUP INC. developed for exclusive sale by NIKKO SECURITIES CO., LTD. to individual investors is a dollar-denominated bond whose returns are linked to the trading performance of 20 American Internet stocks. The minimum investment amount is $10,000. The American financial services giant expects to come up with other investment vehicles that Nikko Securities can market to its customers.

Tying up the loose ends in Japan from the acquisition of BANKERS TRUST CORP. by DEUTSCHE BANK AG, the two banks' investment management and trust banking operations are being merged. The combined money management business will go by the name of DEUTSCHE ASSET MANAGEMENT (JAPAN) LTD. At start-up, it will be managing nearly $9.2 billion. The trust banking activities of Bankers Trust and Deutsche Bank, which together have $20 billion in assets under management, will be merged as DEUTSCHE TRUST BANK LTD. As a group, Deutsche Bank affiliates already rank as the top foreign asset manager in Japan. Within five years, though, executives hope that they will be among the five biggest domestic and foreign asset managers in the country with client assets on the order of $83.3 billion. New York City hedge fund CERBERUS PARTNERS, L.P., which has made a name for itself in Japan by buying from banks and failed nonbank financial institutions nonperforming assets with a book value of nearly $14.2 billion in just 15 months, will open an office in Osaka to expand its purchases of real estate-backed bad loans in that part of the country. The company reportedly still has $1.5 billion earmarked for asset acquisitions in Japan.

In what both call a win-win deal, the subsidiary of FORD MOTOR CREDIT CO., the world's biggest provider of automotive financing, bought MAZDA CREDIT CORP. for $66.7 million. The former MAZDA MOTOR CORP. unit's 14 branches generated revenues of $83.3 million in FY 1998. The transaction frees Mazda, which effectively is controlled by Ford through a 33.4 percent ownership stake, to concentrate resources on its core business of building and selling cars and trucks while also trimming the company's net debt. Analysts suggest as well that buyers of Mazda vehicles will be able to get more favorable financing terms because of Ford Motor Credit's market power. For FORD CREDIT JAPAN INC., which provides financing for purchases of Ford vehicles, the acquisition represents a major expansion of its operations. Mazda Credit will continue to operate under that name.

GE CAPITAL FINANCIAL INC., which markets corporate bank cards to multinationals, has teamed with HITACHI CREDIT CORP. to extend its travel card products and services to Japan. Under the alliance, Hitachi Credit will issue yen-denominated MasterCard corporate credit cards to big international companies with local operations, send out Japanese-language statements and provide other in-country cardholder services. Multinationals participating in the program receive from GE Capital Financial consolidated global statements that give them a better idea of how their travel money is spent.

An exchange rate of ¥120=$1.00 was used in this report.

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It took six months, but OUTBACK STEAKHOUSE INC. has found a partner to help it move into the Japanese market (see Japan-U.S. Business Report No. 353, February 1999, p. 19). The Tampa, Florida restaurant chain has signed an agreement with WDI SYSTEMS INC., which already has such American restaurant brand names as Hard Rock Cafe and Tony Roma's in its portfolio, to form a company to franchise as many as 200 Outback locations in time.

Fresh-baked cinnamon rolls could be available in central Tokyo by yearend and eventually at other stores in central Japan. Seattle's CINNABON, INC. licensed SUGAKICO SYSTEMS CO., LTD. of Nagoya to build 60 Cinnabon bakeries/cafes over the next five years, mostly in the Tokyo metropolitan area. The typical Cinnabon location is expected to be about 860 square feet and to have seating for 60 customers as well as on-site baking equipment. Sugakico Systems, which operates some 330 fast-food restaurants, expects each Cinnabon bakery to generate annual revenues of $666,700. Large cinnamon rolls will cost about $2.90 each, while smaller ones will be about $2.10. Since October 1998, Cinnabon has been owned by Atlanta-based AFC ENTERPRISES, INC.

SEATTLE'S BEST COFFEE, INC., another member of AFC ENTERPRISES, INC.'s brand portfolio, also has aggressive plans for Japan. It signed an agreement with NIPPON BRUNSWICK CO., LTD., a joint venture of Lake Forest, Illinois-based BRUNSWICK CORP. and MITSUI & CO., LTD., to develop 100 SBC espresso cafes in Tokyo as well as in Kanagawa, Ibaraki, Chiba, Gunma, Tochigi and Saitama prefectures. At the same time, Seattle's Best Coffee gave Osaka's MIFUNE CORP. exclusive rights to franchise 67 cafes, kiosks and coffee carts in Osaka, Kyoto, Wakayama, Hyogo, Fukuoka and Okinawa prefectures. The prototype SBC cafe for Japan is 1,300 square feet with seating for 50 customers. Sales are projected at $83,300 a month. Seattle's Best Coffee is a relative latecomer to Japan. Hometown rivals STARBUCKS COFFEE CO. and TULLY'S COFFEE CORP. already have stores open.

An exchange rate of ¥120=$1.00 was used in this report.

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BLOCKBUSTER INC. might be synonymous with video rentals in the United States, but the company found Japan tough going. Eight years after moving into the market, the VIACOM INC. unit has called it quits. In that time, it opened just 40 of 1,000 planned stores and lost money in 1998 on revenues of roughly $25 million. Blockbuster sold its half interest in the company running the chain to partner FUJITA & CO., LTD., which also is a part owner of MCDONALD'S CO. (JAPAN) LTD. Analysts partly blame Blockbuster's failure to expand as rapidly as it had planned to its preference for opening large stores in prime commercial districts.

One American superstore operator has concluded that the big-box retailing concept is not the most appropriate for Japan, where prime commercial space in major cities is extraordinarily expensive. For the time being at least, OFFICE DEPOT, INC., which took over its subsidiary this past spring (see Japan-U.S. Business Report No. 355, April 1999, p. 19), plans to open discount office supply stores that have roughly 5,400 square feet of selling space rather than multiples of this figure. Three stores that recently were opened in central Tokyo fall into that new size class. Their location in busy business areas of the capital also reflects a decision by the world's largest seller of office products to limit its expansion to the Tokyo metropolitan area.

The 83rd TOYS "R" US INC. store in Japan, located in Sakai, Osaka prefecture, has opened its doors. Like other recent additions to the chain, this 21,500-square-foot facility has a different floor plan than older stores, one intended to make it easier for customers to find specific products. Similarly, the Sakai outlet houses a Babies "R" Us section. At the same time as it opens new stores, Toys"R" Us's subsidiary is starting to renovate some of its oldest locations. For certain stores, like two in Kyoto prefecture, that process includes converting about 20 percent to 25 percent of the selling space to the Babies "R" Us format.

An exchange rate of ¥120=$1.00 was used in this report.

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The big Rockwell Automation unit of ROCKWELL INTERNATIONAL CORP., the world's largest supplier of high-performance automation products through its Allen-Bradley and Reliance Electric operations, now owns 50 percent of RELIANCE ELECTRIC JAPAN LTD. It acquired an additional 5 percent stake from partner ULVAC JAPAN, LTD. for an undisclosed price. REJ manufactures durable-speed electronic drives for AC/DC motors at a Yokohama factory. It had revenues of $59.2 million in 1998. Sales of REJ products are handled by Rockwell Automation, which has had a presence in Japan since 1980 and provides sales and support services through offices in Tokyo, Osaka and Nagoya.

In a breakthrough deal, garbage disposal systems manufactured by HYDROMAID INTERNATIONAL INC. will be installed in condominiums that AGA GROUP of Kanazawa, Ishikawa prefecture is developing. The Draper, Utah company's product is powered exclusively by water. That feature appealed to the developer, which is marketing its condos as environmentally friendly. The initial order covers HydroMaid disposal systems for 1,000 units in 14 buildings scattered around Japan. The installed cost of the system is about $333,300 for 100 units, including a wastewater treatment tank.

With its recently developed automatic low-pres-sure molding machine for making net shape parts from ceramic and metal materials, PELTSMAN CORP. plans to move back into the Japanese market. First, though, it wants to line up a distributor. The Minneapolis company had been selling a manually operated molding machine in Japan, but that business ended several years ago. The new MIGL-371 molding system lists for $58,900.

MAGNUM MANUFACTURING INC., a Phelan, California maker of torches used to cut metal, named ASAHI CHEM-MACHINERY CORP. as its exclusive distributor. The Kobe company is carrying the portable truck-mounted MAG6000, which has a heavy- duty MagmaFusion torch, and the portable MAG4000, which weighs just 18 pounds. As a set, they cost $2,500. Target markets for the products are ship repair companies and demolition businesses. Magnum expects to ship 500 sets to Asahi Chem- Machinery by the end of 1999.

In what must have been an in-house record for product launches in one month, SHIN CATERPILLAR MITSUBISHI LTD. released four products. New on the market is the CAT D300E articulated dump truck for use in quarries and civil engineering projects. Weighing only 24.3 tons but able to haul as much as 30 tons of material, it features improved traction thanks to a system that keeps all six wheels rotating at the same speed. Shin Caterpillar Mitsubishi expects to sell 10 of the $500,000 machines in the first year of marketing. The company also expanded its lineup of hydraulic excavators, adding the 72-ton CAT 365BL REGA. Designed to load dump trucks in the 10-ton to 40-ton class, the machine has a 3.5-cubic-yard bucket, making it the third-largest hydraulic shovel that CATERPILLAR INC. produces. Its Japanese affiliate is optimistic that it can sell 40 units over the next 12 months at prices starting at $633,300. A self- propelled concrete crusher is available as well from Shin Caterpillar Mitsubishi. The MRG40JG crushes pieces of concrete from demolished buildings, in the process separating out rocks and other debris so that the concrete can be recycled as aggregate. Able to handle as much as 235 tons of concrete an hour, the crusher is priced around $433,300. First-year sales of this product are targeted at 15 units. Finally, the Caterpillar-MITSUBISHI HEAVY INDUSTRIES, LTD. venture hopes to sell in the next year 500 MM57SR hydraulic mini-excavators. This 5.5-ton-class product with its 0.3-cubic-yard bucket goes for about $96,700.

The Kohler Power Systems generator division of KOHLER CO. has introduced through exclusive distributor TOMINAGA & CO., LTD. its largest generator set, a 2,000-kilowatt unit that can be powered by either gasoline or natural gas. Like competing products, the Kohler generator is designed to be used either as a primary source of electricity or as a standby source of power. What sets its system apart, the company says, is that it comes on-line faster. In Japan, though, the main marketing advantage of the Kohler generator could be price since it costs only about two-thirds of what Japanese manufacturers charge for 2,000-kW generators.

An exchange rate of ¥120=$1.00 was used in this report.

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Broadening its product lineup, EASTMAN KODAK CO.'s subsidiary introduced three types of A4-size Kodak Inkjet Photo Letter Paper for photo-quality reproduction with all popular ink-jet printers. The most expensive paper — $19.60 for a box of 50 sheets — provides a product comparable in finish to a photo because of the thickness of the paper and its glossy surface. The Kodak unit also is selling a specially coated, bright- white paper with a matte finish. It costs $5.00 for a package of 100 sheets. Most economical at $5.00 for 250 sheets is a multiuse version of the Kodak Inkjet Photo Letter Paper.

An exchange rate of ¥120=$1.00 was used in this report.

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In a decision apparently made only after considerable internal debate, HEWLETT- PACKARD CO. will buy out YOKOGAWA ELECTRIC CORP.'s 25 percent stake in HEWLETT-PACKARD JAPAN LTD. for a reported $500 million and make HP Japan a wholly owned subsidiary. The move is keyed to the November division of HP and its subsidiary into two companies, one handling enterprise computing systems, PCs, printing and imaging products, software and services under the HP name and the other, christened AGILENT TECHNOLOGIES INC., taking responsibility for HP's test and measurement, semiconductor and medical instrumentation businesses. Originally, YEC was to retain a 25 percent interest in both companies (see Japan-U.S. Business Report No. 355, April 1999, p. 13). HP Japan was formed in 1963 to manufacture and market Hewlett-Packard's measuring instruments. Its business diversified over time along with its American parent's. In 1983, HP, which initially owned 49 percent of the joint venture, became the majority owner. In the year through October 1998, HP Japan had sales of roughly $2.5 billion.

In the meantime, business goes on as usual. HEWLETT-PACKARD JAPAN LTD. released three transmission/reflection vector network analyzers covering the 50-MHz to 40-GHz range. The HP 8722E family allows characterization of radio-frequency and microwave components at what the company considers an affordable price. The HP 8722ET, for instance, costs $67,400. It includes an integrated synthesized source, a built-in T/R test set for a full range of magnitude and phase measurements in the forward direction and a tuned receiver.

SONY TEKTRONIX CORP. is working to reduce its product dependence on TEKTRONIX, INC. and SONY CORP. It hopes that test and measurement equipment developed in-house will generate sales of $83.3 million in 2001, double the current level, and account for approximately 30 percent of total revenues, which amounted to $210 million in the year through March 1999. Since the start of the year, the joint venture reportedly has introduced at least one new product a month that is the result of its own R&D efforts. These include a pair of low-cost MPEG-2 signal generators for circuit design evaluation and conformance testing of compressed digital video products. The MTG100, designed for production line use, lists for $12,300. The MTG300, which allows designers to customize a signal, goes for $24,600. However, another test product that Sony Tektronix recently put on the market came from its Wilsonville, Oregon parent. The HDVG1 is a high-definition test signal generator module designed for use with Tektronix's TG2000 video signal generation platform. It outputs all the major HDTV serial digital video signals as well as the digital and analog signals used in standard-definition TVs. By itself, the module costs $7,500, but a package including the TG2000 is $18,800.

The Model 1164 Reliability Test System from St. Paul, Minnesota-based AETRIUM INC. for testing for electromigration in the copper interconnects used in next- generation semiconductors is available through HAKUTO CO., LTD. With its massively parallel architecture, many tests at many temperatures can be run at the same time. The smallest Model 1164 configuration tests 48 packages in four oven chambers, each of which has its own voltage and current sources, processors to control each test, dedicated measuring circuits and oven controller. The system is expandable to 64 oven chambers, all running in parallel. Hakuto has priced the 64-package test configuration at $125,000. It is looking for first-year sales of five to seven units.

With the Ministry of Agriculture, Forestry and Fisheries leaning toward requiring the labeling of certain foods that contain genetically modified organisms, GENETIC ID INC. expects a jump in its Japan business. The Fairfield, Iowa company's local office now must send samples to the United States for tests to determine whether a product has been bioengineered. As soon as next spring, however, Genetic ID could open a testing facility in Japan. That would cut the turnaround time to as little as a day from the current week or so. The company also reportedly is weighing whether to license its GMO detection technology to third parties in Japan.

Syringes prefilled by pharmaceutical companies are little used in Japan despite their benefits of ensuring that the right medicine is delivered to patients and improving efficiency at medical facilities. BECTON DICKINSON AND CO. believes that this is a market ripe for growth. Its subsidiary has earmarked roughly $23.3 million to build a plant and a distribution center at its Fukushima prefecture production complex. To date, Becton Dickinson has brought in Hypak prefillable syringes from its French operations for sale to several drug firms.

In a major realignment of Japan's medical equipment marketing business, the big GE Medical Systems unit of GENERAL ELECTRIC CO. is buying for an undisclosed price the distribution operations of NEC MEDICAL SYSTEMS, LTD. The two then will form a venture to market and distribute products and services from GE Marquette Medical Systems, which is part of the Waukesha, Wisconsin GE Medical Systems group, and from NEC Medical Systems. GE Medical Systems will have a 75 percent stake in GE MARQUETTE MEDICAL SYSTEMS JAPAN, LTD., which should be operational October 1. It will have 43 nationwide sales offices and some 350 sales and service personnel who formerly worked for NEC Medical Systems. GE Marquette Japan will offer a wide range of products from its American parent for monitoring patients, diagnosing cardiac disease and managing patient data. It also will distribute cardiovascular and cerebral nerve monitoring equipment developed by NEC Medical Systems, which will continue to design and produce products for the joint venture. GE Marquette Japan is forecasting sales of more than $100 million in its first year of business. Despite the formation of the joint venture, GE Marquette Medical Systems' products still will be distributed through existing channels, including NIHON KOHDEN CORP. and ATOM MEDICAL CORP. Likewise, GE-YOKOGAWA MEDICAL SYSTEMS, LTD. will remain the marketer of GE Medical Systems' diagnostic imaging equipment. MHW has cleared for sale POSITRON CORP.'s Posicam-HZ Series of positron emission tomography scanners. Distribution will be handled exclusively by the subsidiary of IMATRON INC., the majority owner of the Houston company. Imatron estimates that the Posicam system could represent as much as 20 percent of the more than 500 PET scanners expected to be installed in Japan over the next five years. PET scanners are used for the diagnosis and the treatment of patients in the areas of cardiology, neurology and oncology.

With MHW approval in hand, CENTURY MEDICAL INC. has launched marketing of VIDAMED, INC.'s minimally invasive ProVu TUNA system for the treatment of benign prostatic hyperplasia, better known as enlarged prostate condition. The Fremont, California company's ProVu allows the transurethral needle ablation procedure to be performed in both hospital and nonhospital settings.

In a decision that should give a major boost to MATRITECH, INC.'s business in Japan, MHW has set a reimbursement rate for the Newton, Massachusetts firm's NMP22 test kit when used to diagnose urothelial cancer. It is the only bladder cancer detection product to be awarded reimbursement for diagnosis. KONICA CORP. has begun sales of NMP22, which correlates levels of nuclear matrix proteins in the urine to the presence of bladder cancer, to hospital laboratories and such big commercial labs as SRL, INC., Japan's largest clinical lab. The test kit costs about $1,700.

Clinical trials will start later this year of CYROLIFE, INC.'s BioGlue surgical adhesive for vascular and pulmonary repair applications. Eight hospitals will participate in the test of the Atlanta company's animal protein-based product, which has the potential to replace sutures and staples in many surgical procedures.

In a revision of the their mid-1996 licensing agreement, THERMOGENESIS CORP. gave ASAHI MEDICAL CO., LTD. access to its proprietary autologous thrombin activation production technology, which is nearing commercialization at the company's Rancho Cordova, California headquarters. This technology will be integrated into the CryoSeal system already licensed to Asahi Medical to produce what is said to be the first autologous biological sealant. Its Japanese partner paid an undisclosed fee to ThermoGenesis for the technology as well as made a $700,000 equity investment in the company.

Extending its sales and service reach nationwide, CANDELA CORP., a developer of cosmetic and medical laser systems, has opened an office in Osaka. The Wayland, Massachusetts company has had a wholly owned subsidiary in Tokyo since 1995. The Candela line of laser systems includes the GentleLASE for hair removal, the AlexLAZR for treating pigmented lesions and unwanted tattoos and the SPTL-1b, which is used for vascular lesions.

XTREME TELEMETRY SYSTEMS, INC. has signed an exclusive licensing deal with Tokyo's MEDIA TECHNOLOGY GROUP to offer specialized TV and Internet- broadcasted sports data to audiences in Japan and elsewhere in Asia as well as in Australia and New Zealand. Xtreme Telemetry's X/T system provides on-screen information in real time on an athlete's physical performance, including heart rate, body temperature, respiration and stress levels, as well as data on equipment or vehicle performance and environmental conditions. The subsidiary of Orlando, Florida's INNOVATIVE HOLDINGS & TECHNOLOGIES, INC. expects the MTG agreement to yield combined TV and Internet revenues of more than $51 million annually.

An exchange rate of ¥120=$1.00 was used in this report.

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Memory supplier SILICON STORAGE TECHNOLOGY, INC. and SANYO ELECTRIC CO., LTD. have converted their 1993 wafer foundry and technology licensing agreements into a multifaceted alliance. For starters, the Japanese partner will serve as an alternative source for the Sunnyvale, California company's flash memory products, selling them under the Sanyo Electric name. Initially, these span SST's MTP (many times programmable) and MPF (multipurpose flash) standard flash memory products, but future SST products are expected to be included as well. The two companies also will codevelop high-functionality application-specific flash memory products for cellular telephone and Internet appliance applications. In addition, SST will license its SuperFlash technology to Sanyo Electric on a royalty-paying basis for use in embedded flash products using 0.25-micron process technology. For its part, SST secures adequate capacity at Sanyo Electric's 0.25-micron foundry for next- generation products.

Big programmable logic device manufacturer XILINX, INC. wants to double its sales in Japan to $58.3 million over a fairly short time frame. To support achievement of this goal, the San Jose, California firm's subsidiary will hire more sales and design- support people. It also will devote more marketing resources to PLDs that can be reprogrammed remotely and to products that are low-cost and energy-efficient. Xilinx acquired the latter technology when it recently bought the PLD division of PHILIPS ELECTRONICS NV's semiconductor business.

Drawing on its expertise in ADSL (asymmetrical digital subscriber line) products as well as its digital signal processing and analog technologies, TEXAS INSTRUMENTS INC. introduced a coder/decoder for applications that do not require the speed of full- rate ADSL. Compliant with the G.lite ADSL specification, the TLFD500 delivers integrated high-performance converters and filters to improve the functioning of a G.lite modem while lowering its component count and cost. In the United States, the part has a suggested price of $9.50 in quantities of 100,000 units. TI's subsidiary also added to its full-rate ADSL codec line two highly integrated products for designers of ADSL client modems and central office line cards.

In a worldwide release, TEXAS INSTRUMENTS INC. put out a family of low-voltage differential signaling data transmission receivers that enable designers to use the higher speeds and lower power consumption of LVDS technology in cable-connected applications. These next-generation products also have better tolerance for electrically noisy environments. That characteristic means that LVDS can move beyond telecommunications applications to such uses as instrumentation and process control.

In Japan as well as elsewhere in the world, LUCENT TECHNOLOGIES INC. is committed to being a leading supplier of a class of optical amplifier modules for high- speed optical transmission known as erbium-doped fiber amplifiers. This technology allows optical signals to be transmitted over very long distances without the need for signal regeneration. That feature is particularly important for dense wavelength- division multiplexing systems, which are one major response to the demand for increasing bandwidth. Lucent's latest entry in the EDFA field is the S1730 optical amplifier module, which it says is the industry's smallest such product.

In a major endorsement of FAROUDJA, INC.'s video-processing know-how, MITSUBISHI ELECTRIC CORP. selected the Sunnyvale, California company's FLI 9000 chipset for a variety of CRT- and LCD-based projectors. This part incorporates a complete suite of Faroudja Picture Plus video-processing technologies. Together, they transform conventional video signals into what Faroudja says are film-like images, with dramatic improvements in color and detail.

At the same time, FAROUDJA, INC. introduced through a Tokyo distributor its new DVP3000 digital video processor/scaler. This product is designed to optimize CRT projectors as well as such other projector technologies as LCD, DLP and plasma, all of which are developed primarily for the presentation of computer graphics and, thus, have poor video-processing capabilities. The DVP3000 processor, which works with NTSC video sources, costs about $20,000 in the United States.

What NATIONAL SEMICONDUCTOR CORP. has dubbed as the first information appliance on a chip is being marketed by its subsidiary. Otherwise known as the Geode SC1400, the part combines a 64-bit x86-compatible processor, a MPEG-2 video decoder, a CRT and TV video processor, a so-called Southbridge component and a Super I/O block. According to National Semi, these features plus the device's small form factor and low power consumption make the Geode SC1400 ideal as the core of a set-top box capable of combining both high-quality DVD video and Internet access. The part, which the manufacturer says goes beyond the system-on-a-chip technology in which it specializes, also is suitable for information appliances.

Marketing people from TELECRUZ TECHNOLOGY, INC.'s subsidiary are making the rounds of consumer electronics manufacturers to push a low-cost chip that brings Internet access and e-mail capability to TV sets. The system-on-a-chip TC701 can be installed directly in a TV set or in a set-top box. Last year, San Jose, California-based TeleCruz, a fabless company, consigned production of the TC701 to TOSHIBA CORP. (see Japan-U.S. Business Report No. 348, September 1998, p. 15).

Through its subsidiary, EXAR CORP. put on the market what it bills as the fastest and the first 12-bit, low-power analog image signal processor for CCD-based video camcorders, video cameras, digital still cameras and similar video products and imaging products. The XRD98L60 and the XRD98L61 can process 40 million signals per second, some 50 percent more than competing chips. Moreover, with a 12-bit architecture, these products deliver better image depth and quality. Both digitize images before they go into the DSP chip. The Fremont, California company priced both parts at $6.00 each in quantities of 1,000. Exar's marketing unit is targeting sales of 100,000 chips this fiscal year.

SEMTECH CORP. signed HAKUTO CO., LTD. to market its semiconductors. Two of the Newbury Park, California producer's products already are on the market. One is the TVSIC (transient voltage suppressor integrated circuit) chip, which protects against power surges. The part costs between 25 cents and $1.25, depending on the voltage, in lots of 1,000. The other SemTech product is the SC1185CSW, which regulates power to the processor, bus and clock and is compatible with such advanced processors as the Pentium III. It is priced at $2.70 in 1,000-unit volumes. Hakuto hopes to build SemTech's chips into a $4.2 million business in FY 2001.

NATIONAL SEMICONDUCTOR CORP.'s marketing unit announced the LM4865 audio power amplifier with DC volume control. Part of the company's popular Boomer audio amplifier family, the device enables loud, clear audio for cellular phones. .....For customers that need to improve the automated manufacturability of their systems but do not want to go to a fully surface-mount solution, INTERNATIONAL RECTIFIER CORP.'s subsidiary is marketing a series of IGBT (insulated gate bipolar transistor) products in what is called a TO-220 Full-Pak package. The devices, priced from $1.90 each, are designed for power supplies and various motor drive applications.

A second company has received a license from POLYMER FLIP CHIP CORP. to use its technique for forming solderless interconnect bumps to mount inverted chips. TOPPAN FORMS CO., LTD. will use the Billerica, Massachusetts firm's know-how to produce low-cost smart labels and cards starting in FY 2000. Japan's top supplier of business forms plans to develop new uses for the smart labels, such as for luggage tags or stock-control labels. NAVITAS CO., LTD. is using PFC's technology to design smart cards and wireless communications devices (see Japan-U.S. Business Report No. 354, March 1999, p. 31).

Technology codeveloped by SARNOFF CORP. of Princeton, New Jersey and security services company SECOM CO., LTD. allows the information on noncontact IC cards to be read by a machine as much as roughly 4.5 inches away. The state of the art in Japan now for noncontact IC cards is a distance of slightly more than an inch. Moreover, at $8.30 or so each, the cards are less expensive than other noncontact IC cards on the market. Secom will start using the cards for building security this fall, although it has not yet decided the pricing of the card reader.

The joint venture that Chaska, Minnesota-based FSI INTERNATIONAL, INC. (49 percent) and MI-TSUI & CO., LTD. and an affiliate formed in 1991 to produce wafer surface-conditioning equipment has inaugurated the $20.8 million e-FSI Okayama Technology Center in Okayama prefecture. The facility houses two clean rooms and FSI's latest microlithography and surface-cleaning equipment. Forty engineers currently are on staff, but E-FSI LTD. hopes to increase that number to 65 in the near term.

AUGUST TECHNOLOGY CORP., a manufacturer of automated inspection equipment for the semiconductor industry, named MARUBENI SOLUTIONS CORP. to represent it. Two of the Edina, Minnesota company's lines will be marketed initially. The NSX Series of automated wafer and die defect inspection equipment, which starts at $416,700, detects foreign matter on the wafer surface as well as surface damage as tiny as 0.5 micron. August Technology's CV Series of automated wafer cassette inspection systems verifies the dimensions of wafer-transport cassettes to prevent scratching and breakage. This equipment is priced from $141,700. Both of these lines have built-in yield-enhancement tools.

Cassette and wafer automation equipment supplier FORTREND CORP. has forged a broad alliance with HIRATA CORP., a Tokyo manufacturer of robots and materials- handling equipment, in order to capitalize on the growing acceptance in Japan of SMIF (standard mechanical interface) equipment. Under the accord, the Sunnyvale, California company has licensed Hirata to make and market its SMIF load/unload products. The new partners also will distribute each other's wafer-handling and peripheral equipment to chip manufacturers.

The Integra Test Division of TERADYNE, INC. has made the first sale in Japan of its INTEGRA J750 VLSI Test System. TOHOKU SEMICONDUCTOR CORP., a Sendai, Miyagi prefecture manufacturer of logic devices, including cutting-edge microprocessors and ASICs (application-specific integrated circuits), has purchased several of the Bedford, Massachusetts firm's systems for testing microcontrollers. All of the systems will be shipped by yearend to the equally owned venture between MOTOROLA INC. and TOSHIBA CORP. Tohoku Semiconductor spokespeople said that the J750 was chosen in part because of its ability to test a wide variety of products in a high-volume production environment. Other factors influencing the decision were the system's small size, cost-effectiveness and parallel test capabilities.

HEWLETT-PACKARD CO. announced two families of test systems for world markets. The HP93000 SOC Series is designed for production testing of highly integrated system-on-a-chip devices, including simultaneously their embedded memory, analog functions, communications interfaces and high-sped buses as well as their digital content. The line features models for both performance-driven and cost-sensitive SOC manufacturers. The HP 93000 SOC Series Performance Models use HP's pay-per- use technology, which allows the frequency to be upgraded for increased flexibility. SOC parts with data transfer rates as fast as 1 gigabit per second can be tested with this equipment. The cost-sensi-tive HP 93000 line offers several fixed configurations and data rates of 200 megabits per second and 400 Mbps. The P-Models are expected to ship late in 1999, with the C-Models following in the first quarter of 2000. HEWLETT-PACKARD JAPAN LTD. has penciled in sales of about 30 systems in the first year.

Japan also is expected to be a primary market for HEWLETT-PACKARD CO.'s other new test system, the HP 94000IP photo-image test system. This mixed-signal production test system, scheduled for fourth-quarter shipment, is targeted at the next generation of photo-imaging devices. These will use CMOS (complementary metal- oxide semiconductor) technology rather than today's CCD technology. CMOS image sensors are expected to cost only half as much as CCD-type imaging devices to produce, even though they have 20 percent to 30 percent more integrated processing on the same piece of silicon. The HP 94000IP, which integrates a new, compact light source, can handle image sensors with integrated processors that contain as much as 16 megapixels of image resolution and that have up to 40-MHz data rates.

An exchange rate of ¥120=$1.00 was used in this report.

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Although it began as a simple Web-friendly data base, ORACLE CORP.'s WebDB has evolved into a Web-site construction and content generation/access tool. The $2,000 2.1 revision allows users to create and post their own information to the Internet or corporate intranet, creating a dynamic, data-driven site. As WebDB resides on the server, the only other software a client needs to create and access WebDB content is a Web browser. WebDB administrators have full control over users' access rights to post material and can enforce style rules on content through templates.

Palo Alto, California-based SENTIUS CORP. has formed an alliance with LOTUS DEVELOPMENT CORP.'s local arm and CSI CORP. to localize, market and support its RichLink Automate Web content annotation technology. The software allows content authors to embed in on-line documents pop-up windows that can contain multilanguage translations, word definitions, hyperlinks and images. Lotus will handle the $14,200 RichLink Automate for Domino, while CSI — a joint venture of IBM JAPAN LTD. and CSK CORP. — will support the Windows NT version, which lists for $16,700.

An extremely Japan-active E-PARCEL, LLC has teamed with HAKUHODO INC., the country's number-two advertising agency, and TOYOTA TSUSHO CORP. to form a company to distribute digitized content, such as e-magazines, e-comics, art and animations. INDIVISIO INC. is built on Hakuhodo's spun-off e-STAGE Franken business, whose automatic digital content delivery system is powered by e-Parcel software (see Japan-U.S. Business Report No. 358, July 1999, p. 26). Hakuhodo and Toyota Tsusho also invested money in the new Tokyo company. Newton, Massachusetts e-Parcel will continue to handle most technical aspects of the operation, while its partners focus on content development and marketing.

TOPPAN PRINTING CO., LTD. is leading a rival consortium of IBM JAPAN LTD., the subsidiaries of INTEL CORP. and SUN MICROSYSTEMS, INC. and INTERNET INITIATIVE JAPAN INC. into the electronic content distribution market. The five will create and operate a network of servers under the Bitway brand for delivering digital content on a per transaction fee basis. This saves content providers the cost and the time of developing their own distribution channels. It also gives them instant access to a large customer base and ensures that they will be using state-of-the-art distribution technology. Commercial service in Japan is slated for the fall, but Toppan Printing plans to take the business global by 2001.

To feed the appetite of Japanese investors for reliable and detailed financial information, STANDARD & POOR'S CORP. has opened a Web site just for them. Entirely in Japanese, the site presents credit ratings as well as analytical research reports on companies and industries. It also provides links to S&P's Tokyo and international staffs as well as to related financial information Web pages.

Although it only has been in operation for five months (see Japan-U.S. Business Report No. 355, April 1999, p. 25), CYBERCASH, INC.'s subsidiary has teamed with BUNKA ORIENT CORP. to offer e-commerce consulting and Web-site construction services. The alliance pairs the Reston, Virginia firm's secure electronic settlement system with Bunka Orient's Web-site building experience. The two already have lined up their first job: building an on-line bookstore for Tokyo-based SHOEISHA CO., LTD.

A new offering from HEWLETT-PACKARD JAPAN LTD. and BROADVISION INC. combines Internet-based marketing with personalized customer relationship management technology. HP Japan will prein-stall the Redwood City, California firm's One-To-One Enterprise package on its servers, bundled with a full e-commerce suite. One of the first users of this hardware/software combination is DLJDIRECT SFG SECURITIES INC., an Internet discount broker (see Japan-U.S. Business Report No. 355, April 1999, p. 18). DLJDirect clients automatically have their personal account information displayed when they log onto the company's Web site. HEWLETT- PACKARD SOLUTIONS DELIVERY LTD. is handling marketing to other companies.

NET PERCEPTIONS, INC. has enlisted some heavyweight talent to launch a joint venture to localize, market and support its e-commerce personalization software. With the help of TRANS COSMOS INC. (40 percent), NTT SOFTWARE CORP. (10 percent) and TOYO INFORMATION SYSTEMS CO., LTD. (5 percent), the Minneapolis company's subsidiary will take over all training and after-sale support functions — duties previously handled in the United States. Net Perceptions' software tracks on- line shopping habits and preferences, allowing e-merchants to build personal relationships and tailor product offerings to an individual's tastes. One of Japan's top office-supply vendors, ASKUL K.K., already has deployed the personalization software at its Web site.

In the same vein, software from AURIC WEB SYSTEMS, INC. allows Internet services providers to track the Web-surfing behavior of their clients and then automatically deliver advertising keyed to their preferences. Thus, as people reveal their interests by visiting certain kinds of Web sites, the Pasadena, California firm's ATLAS (auto- targeted live advertising system) will throw up separate windows on the user's monitor displaying ads for related products. To penetrate the rapidly growing Japanese Internet market, Auric Web Systems formed an equally held ISP venture with NIHON TELENET CO., LTD. that will offer free connection services to consumers and generate revenues by selling advertising.

With wireless Internet surfing all the rage in Japan, two of the country's biggest cellular services providers, DDI CORP. and NIPPON IDOU TSUSHIN CORP., as well as HITACHI, LTD. have licensed a wireless Internet services platform from PHONE.COM, INC. The Redwood City, California firm's UP.Link Server Suite powers DDI's EZweb and IDO's EZaccess services, which include e-mail, information channels and Web- based personal information management services. These services can be accessed via Hitachi's C201H cdmaOne-protocol handsets, which use's UP.Browser micro Web browser. .....Separately, PHONE.COM, INC. authorized ITOCHU TECHNO- SCIENCE CORP. to resell its UP.Link wireless Internet services platform. The distributor will provide localized installation, developer training, marketing, sales and technical support for the UP.Link Server Suite and the UP.SDK software development kit.

With demand for Internet bandwidth exploding, HARRIS & JEFFRIES, INC. introduced a high-speed data-transmission software that complies with Multiprotocol Label Switching, an advanced data traffic management protocol set by the Internet Engineering Taskforce. Distributed by NISSHO ELECTRONICS CORP. and DENSAN CO., LTD., the Dedham, Massachusetts company's Label Traffic Control System enables ISPs to increase their service capacities by making their switches and routers operate much more efficiently than current protocols allow. A LTCS license costs roughly $333,300 a year. For its part, Nissho Electronics hopes to sell up to 30 licenses and generate $10 million in revenues over three years.

To expand its sales to ISPs, San Mateo, California-based INKTOMI CORP. opened a wholly owned subsidiary. The new unit will work with distributors ITOCHU TECHNO- SCIENCE CORP. and TRANS COSMOS INC. (see Japan-U.S. Business Report No. 352, January 1999, p. 20) to promote the newest edition of Inktomi's network caching package. Traffic Server 3.0, which costs $43,300 per server processor, speeds both uploads and downloads by dynamically storing content on demand.

An Internet server security product from C2NET SOFTWARE, INC. is on the market through Tokyo's INTEGRATED SYSTEMS TECHNOLOGIES, INC. Priced between $1,300 and $1,700, Stronghold Secure Web Server is based on the popular open- source Apache Web server, but it adds a full array of security protocols and management tools. Encryption keys from 40 bits to 128 bits are user-selectable. The latest version of Oakland, California C2Net's Stronghold supports Global Server IDs to prevent spoofing and Internet fraud.


In a big win for the Seattle company, WATCHGUARD TECHNOLOGIES, INC. sold its LiveSecurity for Managed Security Services to INTERNET INITIATIVE JAPAN INC. to handle all security-related functions for the major ISP. LiveSecurity for MSS can monitor, configure and update the Internet security privileges of thousands of customers from an ISP's central operations console. IIJ expects that this will appeal to companies interested in outsourcing all of their ISP needs, including intranet, Internet and extranet security. It expects to launch its managed security service during the fourth quarter.

As part of a major push into global markets, fellow Seattle software developer AVENTAIL CORP. signed up NICHIMEN DATA SYSTEMS CORP. to distribute its products. NDS will promote and support Aventail ExtraNet Center to corporate customers looking for a turnkey yet secure extranet solution. With ExtraNet Center prices starting at $20,700, the new distributor hopes to sell $20.8 million worth of Aventail software and related services over the next three years.

Another product aimed at securing corporate data transmitted over the Internet from prying eyes comes from Waltham, Massachusetts-based AUTHENTICA SECURITY TECHNOLOGIES, INC. PageVault is a fully exportable client-server application that uses 128-bit RC4 encryption and Internet standards to protect digital information wherever it goes. DIT CO., LTD. and MARUBENI SOLUTIONS CORP. are managing distribution and support for PageVault, which costs $8,200 and up for a basic license.

The world leader in the field of digital document authentication signed an exclusive distribution agreement with NTT DATA CORP. The on-line Digital Notary Service from SURETY.COM not only puts a timestamp on digital documents and other information. It also reassures recipients that the information has not been tampered with, thanks to the unique digital "fingerprint" that it creates. The service protects individual files as well as entire archives. The three-year deal, which also covers other parts of Asia, could be worth more than $4 million to Reston, Virginia-based NTT Data expects to launch the Digital Notary Service in Japan next April. Primary targets will be government agencies and securities firms.

Also aimed at reassuring Web clients that they are seeing and receiving the "real thing" on-line is the latest version of SECURITY DYNAMICS TECHNOLOGIES, INC.'s digital authentication server software. Keon Certificate Server 5.0 generates and authenticates digital IDs for information sent over the Internet as well as for servers. The new version also is ready to authenticate electronic fund transfers and EDI (electronic data interchange) transactions. Available through SDT's subsidiary, a 500- user license is priced at $29,200.

LITRONIC INC. and new distributor ITOCHU TECHNO-SCIENCE CORP. expect to tap a growing market for Internet security software and services. The Irvine, California firm offers a wide range of Internet security solutions, everything from smart cards through public-key infrastructure systems. It already derives significant business from Japanese customers. The tie-up with Itochu Techno-Science will broaden Litronic's distribution channels and links to large corporate clients.

To build on the current interest in the Linux open-source operating system, LINUXCARE, INC. joined forces with DENSA TECHNO TOKYO K.K. to support and service Linux users in Japan. DTT, a subsidiary of HITACHI ELECTRONICS SERVICES CO., LTD., will provide initial and basic support at its recently opened Synthesis Linux Solution Center in Tokyo as well as over the telephone and on the Internet. San Francisco-based Linuxcare will train DTT personnel and handle complex problems.

In another sign of its commitment to support the 64-bit Unix market, COMPAQ COMPUTER CORP.'s subsidiary will start shipping in October a Japanese version of the Tru64 Unix operating system. The follow-on to Digital Unix, the $410 package is targeted at users of Compaq's Alpha-based family of servers and workstations as well as at hardware based on the forthcoming IA-64 architecture chip, the Itanium (code- named Merced).

Hoping to gain a toehold in the corporate server market, APPLE COMPUTER, INC. has teamed with two affiliates of NIPPON TELEGRAPH AND TELEPHONE CORP. to promote, market and support its Mac OS X Server operating system. NTT ADVANCED TECHNOLOGY CORP. will focus on its current customer base of communications services providers, while CYBER SPACE LABORATORIES will target sales of the server OS to medical institutions.

UNISYS CORP.'s affiliate introduced a new network messaging middleware program, OnNet DRB (distribution request broker). Developed in-house, the software ties together ERP packages and legacy business applications with new software via Java and eXtensible Markup Language translation modules. The Unisys subsidiary hopes to sell 100 copies of OnNet DRB the first year and 500 over three.

With time running out before the year 2000 begins, SOLUTIONSOFT SYSTEMS INC. has brought its full line of Y2K testing and contingency planning packages to corporate customers through a distribution agreement with NETSERVE INC. The San Jose, California firm's Time Machine is a date and time simulator, allowing users to test not only hardware but also software and data bases for sensitivity to Y2K issues. The time simulator also allows tests to be conducted more quickly because system data need not be reloaded before and after tests. Finally, Time Machine can temporarily alleviate Y2K problems by fooling applications into thinking that January 1, 2000 has not yet arrived. Netserve is aiming for sales of 10,000 packages, with the Windows NT version of Time Machine priced at $650 and the Unix edition at $6,500.

ORACLE CORP.'s local unit has released an update of its integrated development environment for Java, JDeveloper Suite for Windows NT 2.0. For $2,900, the Java IDE includes JDeveloper 2.0, Oracle8i, Oracle Application Server 4.0, Oracle Procedure Builder 6.0, Oracle Lite 3.6 and a Java programming text.

Aimed at more than simply making legacy mainframes Web-friendly, San Diego, California-based AONIX's RP/Web enterprise integration/application development environment acts like an intelligent go-between among mainframe, server-centric and client-based applications. Available through SUNTORY LTD., the package increases the efficiency of mainframe-to-Web transactions without requiring complicated changes to existing software. RP/Web costs $33,300 for companies already using Aonix's NOMAD programming language and $50,000 and up for those that do not. NICHIMEN DATA SYSTEMS CORP. and KOZO KEIKAKU ENGINEERING INC. also distribute Aonix products.

NOVELL, INC.'s subsidiary has made several moves to defend its share of the network operating system market. First, it rolled out a Japanese version of Novell Directory Services 8, giving IT managers a comprehensive tool to manage their network's hardware, soft-ware and user information data bases (network directories). At the moment, the localized version of NDS 8 works only with the NetWare 5 NOS, but it is free for download via the Internet. NDS 8 versions for Windows NT, Solaris and Linux are planned within the next 12 months. Second, the Novell unit is expanding its network systems consulting business and sales of NOS products, hoping to double revenues within two or three years. The company will boost its systems engineering staff by 30 people or 25 percent. It also plans to tighten business relationships with the operation of network hardware giant CISCO SYSTEMS, INC.


Taking aim at a key market dominated by its competition, SUN MICROSYSTEMS, INC. now offers a localized network server package designed for branch offices, workgroups and departments. Solaris Easy Access Server 3.0J mixes the reliability and the power of Sun's version of the Unix operating system with the ease-of-use features enjoyed by Windows NT administrators. The special package is easy to install, configure and administer. It also is interoperable with Windows NT servers and supports all Internet standards. To Sun, this all adds up to a lower total cost of ownership.

With 24x7 reliability of network servers becoming increasingly important for corporate operations and e-commerce, IBM JAPAN LTD. has released a clustering add-on for its Netfinity line and Windows NT operating system. Netfinity Availability Extension for Microsoft Cluster Service v1.0 makes it possible to create an eight-node server cluster with automatic failover using N-way or N+1-way clustering with Fibre Channel storage links, high-speed interconnection and single-point management control.

The subsidiary of Santa Clara, California-based NETIQ CORP. has rolled out a new version of its network and application management package. AppManager 3.0J allows administrators to control and fine-tune the performance of network software as well as key network applications from a central console. The network management add-on is available from FUJITSU, LTD. and HITACHI, LTD. on an OEM basis as well as from the Japanese unit of COMPAQ COMPUTER CORP. for anywhere from $1,200 to $5,100.

Also debuting a new version of a core product is COMPUWARE CORP. The Farmington Hills, Michigan company's EcoSCOPE 4.0.1 adds more analysis tools to earlier versions of the network application testing and performance evaluation package. Rapidly determining and repairing the root source of application problems is a key component of delivering service level management to critical users.

For the first time, HEWLETT-PACKARD CO. has agreed to license its entire portfolio of HP OpenView NetMetrix software for machines running the HP-UX operating system. The OEM deal for a Japanese version of the network traffic monitoring package is with NEC CORP. The electronics giant will market the product as part of its SystemScope line of system and network management solutions, targeting purchasers of its NX7000 server family, which comes preinstalled with HP-UX.

FRESHWATER SOFTWARE, INC. has picked ASGENT INC. as the exclusive distributor of its server monitoring software, SiteScope. The Boulder, Colorado company's program monitors such key operational variables as unused CPU cycles and open disk storage space, watching for conditions where a fault may occur. If a problem does crop up, SiteScope can help the server repair itself or notify the administrator of the issue. Asgent is selling the Unix version of SiteScope for $4,000 and a Windows NT version for $1,500. The Tokyo marketer aims for a first-year sales total of 300 packages.

Entering the enterprise network storage space, COMPAQ COMPUTER CORP.'s subsidiary released a localized version of StorageWorks Virtual Replicator. For $1,700, the software monitors and manages networked data storage resources, ensuring that key data are copied for safekeeping and reliability. StorageWorks Virtual Replicator creates a virtual storage pool that also speeds backups and improves utilization rates.

The SecureIT division of VERISIGN, INC. is distributing its Firewall HealthCHECK package through FORVAL CREATIVE, INC. and HITACHI INFORMATION NETWORK, LTD. The utility allows companies to test and evaluate the ability of their FireWall-1 software from CHECK POINT SOFTWARE TECHNOLOGIES LTD. to fend off unauthorized access and other attacks. The two Tokyo-based distributors also will provide technical support for the firewall probe.

TELCORDIA TECHNOLOGIES, INC. (formerly Bell Communications Research or Bellcore) and Tokyo's INTERNATIONAL NETWORK SECURITY INC. have joined forces to bid for network security contracts from companies and local governments. INSI will use its Morristown, New Jersey partner's know-how and software to tailor network security solutions and provide internal and external security monitoring. INSI has set its basic service fee at $166,700. It hopes to generate total revenues of $8.3 million the first year. Telcordia Technologies is a SCIENCE APPLICATIONS INTERNATIONAL CORP. company.

Going up against the previous pair are SRI INTERNATIONAL and OKI ELECTRIC INDUSTRY CO., LTD. They are developing a full menu of network security products and consulting services. Oki Electric will rely on the Menlo Park, California firm's subsidiary for advanced training and know-how, in turn providing four service options to customers. Basic service includes evaluations of security needs, installing a basic system and training customers in its use. The systems configuration option covers evaluation, design and consulting on tailor-made security solutions. Oki Electric also will be positioned to operate and maintain a customer's security system and to test and monitor its functioning.

Building on its strong position in the enterprise management solutions market, TIVOLI SYSTEMS INC. wants to extend its EMS model throughout a client company's Internet business activities. The vehicle is Tivoli Cross-Site. It controls, monitors, diagnoses and responds to disruptions in a firm's Internet transactions to improve reliability and customer service. The package also manages the delivery of applications and data over the Internet. Cross-Site gives users control over the performance of their entire Internet activities, whether through ISPs, virtual private networks or value-added networks.

In a bow to the Web tidal wave, Dublin, Ohio-based STERLING COMMERCE, INC. turned its GENTRAN family of enterprise application integration products into a complete e-business solution. GENTRAN's Web Suite, Web Forms, Web Data Exchange, Internet Data Exchange, Real-time Integration and NetShop cover all the bases for firms that want to integrate their business processes through the Internet.

MICROSOFT CORP.'s subsidiary soon will release updated versions of its popular family of back-office suites for all sizes of businesses. BackOffice Server 4.5 has improved installation, configuration and management tools designed to ease implementation and lower operating costs. A five-seat license for this software costs $5,200. For $2,400, BackOffice Small Business Server 4.5 gives small firms a turnkey solution to their intranet and Internet needs.

HEWLETT-PACKARD JAPAN LTD. is offering customers the latest edition of OpenMail, its large-scale messaging and collaboration solution. Version 6.0 has improved support for Microsoft Outlook, enhanced high-end scalability, native Internet and Web support, easy interoperability with legacy programs and less need for maintenance by IT staffs. Running on HP-UX, OpenMail 6.0 pricing starts at $4,300 for a 50-user license.


Leveraging the growing popularity of the Microsoft Exchange messaging platform, COMPAQ COMPUTER CORP.'s subsidiary rolled out a Japanese version of Work Expediter 1.1. The software allows users and developers to easily create customized groupware applications based on the Exchange platform, such as workgroup and workflow solutions. Pricing begins at $7,500 for the corporate knowledge management tool.

LOTUS DEVELOPMENT CORP.'s Japanese team is not laying down on the job. Responding to tougher competition, the subsidiary has set up a unit to market knowledge management solutions using its Notes/Domino R5 groupware platform. The group hopes to capitalize on R5's built-in Internet technologies and customizable search, distribution and personalization features to tailor solutions to clients' specific needs. Unit members also will handle customer training and help-desk tasks.

In a major move to defend its slice of the knowledge management market, BRIO TECHNOLOGY, INC. established a wholly owned subsidiary to market and support its Brio ONE suite. Brio.Enterprise, Brio. Report and Brio.Portal let companies build and deliver business intelligence, enterprise reporting and analytic applications to intranet and extranet users. The Palo Alto, California company's products already are distributed by CANON SALES CO., INC., SHARP SYSTEMS PRODUCTS, INC. and 15 other firms. Canon Sales alone reported a 300 percent-plus jump in Brio products and services last year. Brio felt, however, that a local presence was needed to further expand marketing, distribution and support channels.

The Trillium Software unit of HARTE-HANKS, INC. selected AGREX INC. of Tokyo to localize, market and distribute its data-cleansing and reengineering software. Billerica, Massachusetts-based Trillium helps companies bring legacy data resources into step with current technologies by standardizing and consolidating them. Agrex has targeted businesses with huge legacy data bases — such as financial, credit and communications firms — as initial customers, with a sales goal of 100 licenses by March 2002. Trillium for Windows NT, which costs $166,700 for a single-user license, is available now. A Unix version is planned for 2000.

The subsidiary of manufacturing execution software maker ENGINEOUS SOFTWARE, INC. continues to build its customer base. SONY CORP.'s home network unit has licensed the Morrisville, North Carolina firm's iSIGHT MES package for use in developing and producing intelligent home appliances. iSIGHT is in use at 18 Japanese companies under 27 licenses (see Japan-U.S. Business Report No 353, February 1999, p. 27).

After 30 months of development and $10 million in expenditures, the Austin, Texas- based Fab Solutions division of OBJECTSPACE, INC. is ready to go global with its Catalyst MES package. The advanced process control software solution is designed specifically for semiconductor manufacturers. It can be applied across multiple process areas and deployed in multiple factories to improve process capabilities, overall equipment effectiveness, ramp yield and volume. Sales and support for Catalyst and other ObjectSpace products in Japan will be provided by TOKYO SYSTEMS LABORATORIES, INC.

STRUCTURAL DYNAMICS RESEARCH CORP. has beefed up its product data management line with two new packages. Metaphase Document Manager makes product documents part of the on-line product descriptions, allowing both in-house and customer engineers to search via a Web browser a firm's entire knowledge base for needed information. MetaDM includes authoring tools, Web-centric search engines, workflow services and change controls. Metaphase Virtual Product Development Manager brings 3D visualization tools to enterprise-level PDM. By allowing engineers to see parts and visualize how they fit together, MetaVPDM speeds the development of production models based on PDM data. INFORMATION SERVICES INTERNATIONAL-DENTSU, LTD. and OKI ELECTRIC INDUSTRY CO., LTD. distribute SDRC's products.

COCREATE SOFTWARE INC.'s unit now offers a localized version of its Design Management PDM solution. Thanks to compatibility with such 3D computer-aided design programs as ME10 and 3D SolidDesigner, the package quickly imports, catalogs, categorizes and organizes 2D and 3D product data as well as related documents. With a single server license of $1,600, CoCreate Software hopes to sell as many as 1,000 systems the first year. It is a HEWLETT-PACKARD CO. company.

Combining elements of PDM and supply chain management, NCR CORP.'s Japan- only Profit demand chain management package provides an integrated back-end solution for the distribution industry. Developed originally by a Canadian group, Profit boosts the return on inventory investments, reduces delivery problems and raises overall efficiency along the distribution chain. Pricing starts at $350,000.

Software from PARAGON MANAGEMENT SYSTEMS provides similar benefits to the semiconductor industry. The Los Angeles firm's Paragon Applications suite is used by repeat customer TOSHIBA CORP., for example, to collapse cycle times, reduce work- in-progress volume, shrink inventories and improve customer service. Toshiba also uses Paragon's Material and Capacity Planner at three of its factories to optimize production planning based on capacity, material and customer parameters. Most recently, Paragon Applications went live at SHARP CORP. The company's IC group deployed Supply Chain Planner to synchronize purchasing, production, product flow and distribution across its facilities in Japan and abroad.

MANUGISTICS, INC.'s subsidiary introduced a new version of its supply chain management module tailored for the Japanese market. SupplyC 6.0 is the core of the Rockville, Maryland firm's "e-chain" SCM architecture, covering all aspects of supply and product information. Not surprisingly, SupplyC works closely with Manugistics' ERP offerings.

A competing PDM/SCM/EDI package is on the market from OPTIKA INC. The Colorado Springs, Colorado developer's eMedia software and methodology manage the full range of documents, interactions and communications within an organization, across its extranet and throughout its supply chain. eMedia allows users to customize their interface to their specific needs while handling practically any form of information. It also manages process workflows and supports negotiations via the extranet. Distributor TOYO INK MANUFACTURING CO., LTD. has a broad pricing range — $1,000 to $85,000 — based on a client's needs. It hopes to ring up $4.2 million in sales the first year.


Two heavyweight teams have entered the SCM consulting ring. In one corner, the local units of ARTHUR D. LITTLE INC. and Irving, Texas-based I2 TECHNOLOGIES, INC. have inked a pact giving the former responsibility for developing SCM solutions and the latter the job of implementing them using its Rhythm software (see Japan-U.S. Business Report No. 354, March 1999, p. 28). Arthur D. Little will focus in part on helping Japanese firms with U.S. manufacturing plants integrate them more tightly with their Japan operations to yield economies of scale and other efficiency gains. The partners are aiming for 10 contracts a year for total revenues of $25 million to $33.3 million.

In the other corner, the subsidiaries of DUN & BRADSTREET CORP. and SAS INSTITUTE INC. are collaborating on streamlining corporate supply chains. Their solution combines SAS Institute's data warehouse software with D&B's industry and product coding system, which they claim will shave 5 percent to 10 percent off of procurement-related costs. The two are installing test systems and plan a full commercial rollout early next year.

ORACLE CORP. continues to push into the front-office market by bundling and fine- tuning its line of Web-based information management products. Oracle CRM3i is a suite of 35 modules organized into five product families: Oracle Marketing, Oracle Sales, Oracle Service, Oracle Call Center and Oracle E-Commerce. The suite also interfaces seamlessly with other Oracle products and many third-party ERP packages.

Firing back, CLARIFY INC. has massaged its customer relationship management products into an integrated solution. eFrontOffice uses the Internet to link together all aspects of customer-related activities, elimi-nating what the San Jose, California company calls the "Internet islands" that can characterize nonintegrated CRM products. A basic eFrontOffice server package is priced at $25,000. Client modules run $5,000 each, while a developers' toolkit is available for $25,000. Clarify's subsidiary expects the new offering to generate sales of $8.3 million the first year.

CORPORATE SOFTWARE LTD. — a joint venture of Canton, Massachusetts-based STREAM INTERNATIONAL INC. (40 percent) and FUJITSU, LTD. (60 percent) that has been in business since late 1994 — is expanding its call-center service operations. The Tokyo company already provides call-center services on an outsourced basis for 13 firms, including MICROSOFT CORP.'s subsidiary. Corporate Software plans to nearly triple its marketing staff to 30 people and to expand its customer base to include financial institutions. It is projecting revenues of $41.7 million in FY 1999 compared with $25 million the year before.

As Japan's financial sector rushes to meet the twin challenges of global competition and Big Bang deregulation, American firms are ready with vital software tools. For instance, TCAM SYSTEMS, INC. and SUMITOMO ELECTRIC INDUSTRIES, LTD. are working together to sell the New York City firm's full line of electronic trading products to stock exchanges and financial companies. AOM-J (automated order management Japanese) is a front-office suite with modules for order entry via the Internet, broker order entry and routing, order booking, order monitoring, order confirmation and account activity review. SWAN-J is a multicurrency, multimarket, multicompany international securities settlement suite for the back office. And TMIG-J (TCAM market information gateway Japanese) provides access to electronic market quotes, orders and market data based on the FIX (financial information exchange) protocol. Even though TCAM Systems has been acquired by a Swedish company, SEI will continue to market and sell the U.S. firm's products. In fact, it recently formed a company for this purpose.

BEA SYSTEMS, INC. has joined NEC CORP.'s Global Banking System solution alliance, which already includes HEWLETT-PACKARD CO. and ORACLE CORP. among its members. The San Jose, California partner will contribute its Web and transaction middleware products to NEC's Distributed Integrated Open Systems for Applications architecture, which is designed to replace mainframe systems in financial institutions. NEC already has received from a Japanese bank the first order for the BankingWeb21 system. Shipments are scheduled to begin in April 2000. Over five years, NEC is looking for worldwide orders of 100 systems, with the basic configuration priced at $16.7 million. The package consists of a NEC server, the HP- UX operating system, data base software from Oracle and BEA's middleware.

NESTOR, INC. licensed its PRISM Credit package to UC CARD CO., LTD., thanks to the efforts of strategic partner CSK CORP. Japan's third-largest credit-card issuer will rely on the Providence, Rhode Island company's product to detect fraudulent charges among its $18 billion business volume, protecting the interests of its 13 million customers. .....Competitor HNC SOFTWARE INC. has sold its Falcon fraud-detection software to CREDIT SAISON CO., LTD. and DC CARD CO., LTD. Like PRISM Credit, Falcon tracks unusual card activity and notifies operators if user-set parameters are exceeded.

MINERVA SYSTEMS, INC. introduced its Minerva Impression DVD authoring package through MA-RUBENI SOLUTIONS CORP. The Mountain View, California developer's $16,700 software is designed for corporate and educational video producers, offering a full array of interactive, digital nonlinear editing tools. Its format-independent import engine allows any AVI file to be imported into the system, eliminating the need for a separate MPEG encoder. Minerva Impression works with the widely used Adobe PhotoShop family of image-editing tools.

An update of its localized image data-base software has been finalized by INTERNATIONAL MICROCOMPUTER SOFTWARE, INC. of Novato, California. MasterClips Image Server 1.5J sorts, categorizes and organizes image information, making it easier for users to find exactly the right image for their project. IMSI's products are distributed by DATT JAPAN INC., ROCK INTERNATIONAL, SUMITOMO METAL INDUSTRIES LTD. and WINNINGRUN SOFTWARE, INC.

AUTODESK, INC. has freshened its core product line of CAD packages. AutoCAD Architectural Desktop R2 ($5,800), Mechanical Desktop R4 ($8,000) and Mechanical 2000 ($5,800) bring an object-oriented approach to mid and upper-range CAD packages. .....Also in the midrange CAD market, PARAMETRIC TECHNOLOGY CORP.'s subsidiary is offering Pro/DESKTOP for $5,000. The Windows-native 3D design environment features an easy-to-learn interface and product information management tools. The Waltham, Massachusetts company's marketing unit expects to license 1,000 seats in the first year of Pro/DESKTOP's availability.

Following up on the positive reception for its novel place-and-route system for deep submicron ICs, MAGMA DESIGN AUTOMATION, INC. opened a service and support subsidiary in Tokyo. The new operation is working closely with the Cupertino, California firm's distributor, SC HIGHTECH CORP., to develop sales of the Blast Fusion electronic design automation package.

Like its parent, XILINX, INC.'s subsidiary has taken to the Web to distribute design support services for its programmable logic device tools. The Japanese-language tools are free to users of Xilinx's XC9500 series of complex PLDs. By saving customers the expense of buying PLD design software, which costs as much as $25,000, the firm hopes to boost sales of its logic devices.

Embedded systems tool maker INTEGRATED SYSTEMS, INC. has broadened its localized offerings to boost sales of software and services. The Sunnyvale, California firm's subsidiary is selling products developed by recent ISI acquisitions. These are a compiler from DIAB DATA, INC. of Foster City, California and a debugger from Chicago's SOFTWARE DEVELOPMENT SYSTEMS, INC. (see Japan-U.S. Business Report No. 349, October 1998, p. 23). ISI plans to merger the two purchases into an independently run business, DIAB-SDS, INC.

In a key win, FUJITSU, LTD. selected DENALI SOFTWARE, INC.'s SOMA (specification of memory architecture) EDA language for Web-based delivery of its flash memory modules for system-on-a-chip and memory submodule designs. The Palo Alto, California company's SOMA-format spec sheets are part of Fujitsu's on-line product information data base. They describe a new type of dual-operation, 3-volt memory design that can perform read, program and erase functions simultaneously.

TCSI CORP. has licensed its Assurance Director package to GLOBAL ACCESS LTD. to manage its forthcoming communications network. A Type I carrier, Global Access is owned by GLOBAL CROSSING LTD. (49 percent) and MARUBENI CORP. (51 percent) (see Japan-U.S. Business Report No. 352, January 1999, p. 26). Since it will be leasing capacity from other carriers as well as operating its own, the joint venture will rely heavily on Alameda, California TCSI's Assurance Director to provide customers with the quality of service they demand.

Hoping to catch the wave of excitement behind NTT MOBILE COMMUNICATIONS NETWORK, INC.'s iMode cellular phone Internet-based service (see Japan-U.S. Business Report No. 358, July 1999, p. 36), COMPAQ COMPUTER CORP.'s subsidiary has announced a software package that delivers groupware functions via the advanced wireless network. Bizport client software allows iMode users to send messages to each other, make joint schedules, reserve meeting rooms and perform other functions via their iMode handsets. Bizport JET is a small-scale server package that can handle up to 50 iMode clients, while Bizport SQL Server can support up to 200 users.

An exchange rate of ¥120=$1.00 was used in this report.

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Two more cable TV operators have deployed COM21, INC.'s ComPORT cable modems and Com-CONTROLLER headends to deliver a variety of broadband services to their customers. Spokesmen for KDD MEDIA NET CO., LTD. and NAGOYA CABLE NETWORK CO., LTD., which together serve some 400,000 homes, said that they selected the Milpitas, California supplier's products in large part because its asynchronous transfer mode-based technology allows multiple applications to operate from the same cable modem platform, including high-speed data, telephony and desktop videoconferencing. To support the rollout of the new services, KDD Media Net and Nagoya Cable Network expect to purchase $1.5 million worth of cable modem equipment from Com21 over a two-year period.

Convinced of the tremendous market potential in Japan of DSL technology for delivering high-speed Internet access over telephone lines, XPEED, INC. opened a branch office in Kawasaki, Kanagawa prefecture. The Santa Clara, California company manufactures DSL modems for installation in customers' offices and homes. Xpeed is using the office to market its products directly to communications carriers and to provide technical support.

The Ministry of Posts and Telecommunications awarded COYOTE NETWORK SYSTEMS, INC. a Type II operating license and approved a point of presence for the Westlake Village, California company. These moves allow Coyote's carrier subsidiaries to originate and terminate traffic in Japan. The company's INET Interactive Network System unit markets international long-distance services, mainly to Japanese and French speakers in the United States, while its American Gateway Telecom business provides wholesale international long-distance services.

MCI WORLDCOM, INC. has extended its global ATM service to Tokyo. The company, which bills itself as the first facilities-based carrier to offer end-to-end international ATM service, said that the expansion was in response to the demand of multinational corporations for high-bandwidth ATM connectivity to more countries. Having ended sales of its own network equipment in the spring of 1998 because of low volume, COMPAQ COMPUTER CORP.'s subsidiary now is marketing other companies' devices under its brand name. The latest is a high-density, dual-speed switch with a gigabit-rate uplink to the backbone manufactured by CABLETRON SYSTEMS INC. and sold as the Compaq SW3324. This $6,300 response to the demand for bandwidth among workgroups and departments provides dedicated 10/100-Mbps connections to the desktop as well as gigabit-per-second links to the corporate backbone.

NATURAL MICROSYSTEMS CORP., a manufacturer of communications interface boards, has set an ambitious target for its year-old Tokyo subsidiary: sales of $8.3 million in 2000, triple the current figure. To advance toward this goal, the Framingham, Massachusetts company will introduce this fall through such channels as NTT INTERNATIONAL CORP. a pair of hardware platforms that enable IBM-compatible PCs to handle a variety of data communications and networking applications, including intelligent networking and Internet telephony switching. The TX3000 and the TX3220, which support multiple standard protocols, provide similar functions but differ in performance. The boards range in price from $8,300 to $12,500.

In back-to-back moves, SNAPTRACK, INC., the world leader in what is known as personal location technology for wireless devices, opened a wholly owned marketing and technical support subsidiary in Tokyo and signed an agreement with NEC CORP. to expand the availability of SnapTrack-based location information services in Japan. The San Jose, California company's technology uses navigational data from GPS (global positioning system) satellites to precisely locate cell phones and other wireless equipment. This capability allows carriers to provide a variety of value-added location- based services. These already are available on a limited scale, but SnapTrack's technology offers several advantages over existing GPS-based systems, including speed and accuracy. Under the deal with NEC, the electronics heavyweight will integrate SnapTrack's Enhanced GPS software into its mobile communications system positioning server for sale to wireless services providers. Shipments of the NEC system are scheduled for yearend. SnapTrack first made a splash in Japan last year when it tied up with NTT MOBILE COMMUNICATIONS NETWORK, INC. to deliver the world's first commercial wireless location service (see Japan-U.S. Business Report No. 348, September 1998, p. 21). It is slated to debut in early 2000.

Four TV networks now offer WINK COMMUNICATIONS, INC.-enhanced programming and e-com-merce interactive TV capabilities. The addition of a broadcaster in Fukuoka on Kyushu brings the installed base of Wink-enabled homes to more than 150,000 out of the 55 million homes reached by these networks. The Alameda, California firm's technology allows TV networks and advertisers to create interactive content that accompanies regular programming and ads. Viewers that have a Wink adapter in their set simply click on the remote control during the enhanced program or ad to receive program-related information or product samples and coupons. They also can make purchases directly. At present, 31 TV programs in Japan are Wink-enhanced.

Satellite-to-car radio broadcaster CD RADIO INC. selected ALPINE ELECTRONICS, INC. as one of the companies to design and develop receivers for its future digital service, which will broadcast up to 100 channels of music and other programming to motorists in the United States starting as soon as the end of 2000. Under the agreement, Alpine will work on a three-band (AM/FM/CD radio) receiver for installation by automotive manufacturers. It also will design and develop receivers for sale in the aftermarket. Production could start in 2001.

An exchange rate of ¥120=$1.00 was used in this report.

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Nine months after DAIMLERCHRYSLER AG was formed, the American-German automotive manufacturer integrated most operations of CHRYSLER JAPAN SALES LTD. and MERCEDES-BENZ JAPAN CO., LTD. except their dealer networks. DAIMLERCHRYSLER JAPAN CO., LTD. now imports and markets Chrysler vehicles as well as Mercedes cars, leaving Chrysler Japan mainly with the job of overseeing directly run Chrysler stores.

Starting early next year, all GENERAL MOTORS CORP. vehicles arriving in Japan, whether made in North America or Opel and Saab cars from Europe, will go through the port of Mikawa in Toyohashi, Aichi prefecture. Importer YANASE & CO., LTD. decided to stop using the ports of Nagoya and Yokohama and to consolidate offloading in Toyohashi to cut costs. By 2002, Yanase will have predelivery inspection operations for GM, Opel and Saab products in Toyohashi.

Since GENERAL MOTORS CORP. spun off DELPHI AUTOMOTIVE SYSTEMS CORP. in May, executives of the world's top automotive parts maker have indicated on numerous occasions that the company is interested in building up its position in Japan. The first step in that direction was the purchase of a 5.86 percent stake in AKEBONO BRAKE INDUSTRY CO., LTD. Delphi bought the shares from NISSAN MOTOR CO., LTD. for an undisclosed but reportedly modest amount. Delphi and Akebono Brake are longtime (1988) equal partners in AMBRAKE CORP., an Elizabethtown, Kentucky manufacturer of disc and drum brake components. Now that it is a partial owner of the Japanese company, Delphi hopes to pursue technical collaboration and new customers with Akebono Brake. It is the brake maker's fourth- largest stockholder after TOYOTA MOTOR CORP., ROBERT BOSCH GMBH and Nissan.

Japan's first air medical helicopter soon will be in service. AERO ASAHI, LTD. will operate the Explorer helicopter, manufactured by the MD Helicopter unit of BOEING CO., for a Japanese hospital as part of a government-backed project. The plane's innovative emergency medical interior system was manufactured and installed by AIR METHODS CORP. of Denver. TOMEN AEROSPACE CORP. distributes the MD Helicopter line in Japan. In early 1995, Aero Asahi ordered 15 Explorer helicopters, including the one outfitted for emergency medical use.

An exchange rate of ¥120=$1.00 was used in this report.

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The largest toy producers in the United States and Japan have signed a wide-ranging alliance agreement. Under it, Barbie, Fisher-Price, Hot Wheels, Matchbox and other MATTEL, INC. products will be marketed in Japan by BANDAI CO., LTD. Sales are scheduled to start at the beginning of next year, with revenues projected at $83.3 million in 2002. Before then, however, El Segundo, California-headquartered Mattel, the undisputed number one in the world toy business, will become a minority owner of Bandai, purchasing a roughly 5 percent stake for $30.5 million. In return for its new partner's help in Japan, where Mattel has had very little success operating on its own in recent years, the U.S. company will market Bandai's Power Rangers and other lines in Latin America, aiming for revenues of $41.7 million in three years. Bandai currently has no presence in that region. Sales of Bandai's toys in the United States will continue to be handled by the company's Cypress, California subsidiary, but Mattel does have the right to sell certain Bandai toys at its soon-to-be-launched Web site. Mattel and Bandai also will collaborate on product development. The American toymaker is particularly interested in Bandai's interactive toy expertise. The Mattel- Bandai tie-up comes just months after HASBRO, INC., Mattel's main rival, signed an exclusive distribution deal with TOMY CO., LTD., Japan's number-two toymaker (see Japan-U.S. Business Report No. 351, December 1998, p. 27).

NIKE INC.'s subsidiary is putting more emphasis on its golfing products. It has brought together in one marketing unit all golf-related items — shoes, clothing and bags and gloves; previously, each was handled by a different part of the company. The Nike affiliate also plans to develop its now-limited women's golfwear business by introducing new lines this fall.

In the hope of boosting sales of older DVD movie titles, TIME WARNER ENTERTAINMENT JAPAN INC. will slash prices on these products by 30 percent to 40 percent to between $16.70 and $20. When movies first come out on DVD in Japan, they cost somewhere around $40 each. In a related move, both SONY PICTURES ENTERTAINMENT INC. and the Buena Vista Home Entertainment unit of WALT DISNEY CO. have started to rent DVD movies. Industry analysts estimate that 2,000 DVD titles have been released in Japan since this format arrived on the market at the end of 1996.

Catalog shopping just became more convenient for L.L. BEAN INC.'s Japanese customers. All of the Freeport, Maine retailer's products now are priced in yen, and shipping merchandise anywhere in Japan costs a flat $5.00. Shoppers also can place their orders by calling a toll-free number. Perhaps most significantly, L.L. Bean's Tokyo subsidiary is handling all exchanges and returns. Previously, customers had to send merchandise back to the United States. The big mail-order retailer has projected its 1999 Japan revenues, including store sales, at $125 million to $166.7 million.

Two manufacturers of commercial cleaning products have signed JOHNSON PROFESSIONAL CO., LTD. to distribute specific products. The Yokohama affiliate of S.C. JOHNSON & SON, INC., which was set up at the beginning of 1998, is marketing a mobile mop and bucket unit made by RUBBERMAID COMMERCIAL PRODUCTS LLC of Winchester, Virginia. In September, it will begin sales of a floor-cleaning machine manufactured by Englewood, Colorado-based WINDSOR INDUSTRIES, INC. under the JohnTec Windsor name. Goods produced by both companies already are available in Japan, but RCP turned to Johnson Professional to expand its local product lineup, while Windsor Industries sought out the firm to increase its marketing channels.

The subsidiary of outplacement specialist CHALLENGER GRAY CHRISTMAS INC. sees a new source of business in corporate Japan's downsizing. It is offering training and advice to people let go, with the goal of helping them find new jobs in a fairly short time. In general, this is a service that the newly unemployed have to pay for themselves. Consequently, the market still is fairly limited, although some 30 companies, led by DRAKE BEAM MORIN INC., offer outplacement services. For these firms as well as Chicago-headquartered Challenger Gray, a major thrust of their marketing effort is to persuade big companies to offer outplacement services as part of the package of benefits made available to cut employees.

Competition to provide outplacement services will increase as well now that RIGHT MANAGEMENT CONSULTANTS, INC. has finalized its purchase of a 20 percent share of WAY STATION, INC. (see Japan-U.S. Business Report No. 355, April 1999, p. 35). The Japanese company, said to be number two in the local outplacement business, had a pretax profit of $1.5 million on revenues of $12.9 million in FY 1998. Philadelphia's Right Management, which had revenues of $168 million in 1998, specializes in what it calls career transition counseling, although part of its business comes from managerial and executive recruitment.

One of the world's biggest ad agencies, New York City's GREY ADVERTISING INC., has strengthened its position in a market second only to the United States in terms of billings. It made GREY DAIKO ADVERTISING INC. a wholly owned subsidiary by buying partner DAIKO ADVERTISING INC.'s 40.9 percent stake for an undisclosed amount. Formed in 1963, Grey Daiko had 1998 billings of $134 million, derived mostly from foreign companies. The 110-employee firm will continue to operate under the same name. Grey Advertising and Daiko Advertising, which ranks as Japan's fifth- largest agency, say that they will continue to cooperate both overseas and in Japan despite the end of their formal relationship.

With help from DAYMON ASSOCIATES, a Stamford, Connecticut-based company that provides marketing and merchandising advice on corporate-brand products, especially to the grocery industry, SEIYU, LTD. will review its private-label processed foods strategy. The big supermarket chain operator plans to introduce a new line of private-label products next March based on Daymon's input, which includes everything from product development planning to manufacturing, distribution and marketing.

Information and intelligence on Japan's pharmaceutical, biotechnology and medical device companies and industries soon will be part of SKILA, INC.'s subscription-based Global Healthcare Intelligence Platform, which now covers these businesses in North America and Europe. To obtain data and insight into the Japanese health-care market, the Mahwah, New Jersey company formed a wholly owned subsidiary in Tokyo.

The Tokyo subsidiary of ARTHUR ANDERSEN LLP now has a hospitality and leisure services consulting practice. The first of the Big Five accounting firms to offer this expertise in Japan, the professional services organization expanded into the field by taking over the operations and the employees of the Japanese unit of HORWATH ASIA PACIFIC LTD., a company owned by HOTEL RESTAURANT SYSTEMS INC.

Nine years after forming UPS YAMATO CO., LTD. to provide international small- package shipment services, UNITED PARCEL SERVICE OF AMERICA INC. and YAMATO TRANSPORT CO., LTD. will split the joint venture into three companies in January 2000 to better focus on specific operations. Atlanta's UPS will be a 51 percent owner of a firm that specializes in international home-delivery services. It will take over UPS Yamato's distribution networks in Japan's metropolitan areas. Yamato Transport, Japan's top package delivery company, will be the majority owner of a firm that handles the part of the current business involved in air cargo. The third and equally owned company will be responsible for customs-clearance services for its siblings. UPS Yamato had revenues of $447.5 million in FY 1998.

An exchange rate of ¥120=$1.00 was used in this report.

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