JPRS ID: 9710 WEST EUROPE REPORT

• Document Type: CREST
• Collection: JPRS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00850R000400050006-6
• Release Decision: RIF
• Original Classification: U
• Document Page Count: 46
• Document Creation Date: November 1, 2016
• Sequence Number: 6
• Content Type: REPORTS

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- JPRS L/9956
,
3 September 1981
_ Ja an Re ort
p p
(F4U0 52/81)
FBIS FOREIGN BROADCAST INFORMATION SERVICE
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_ JPRS L/9956
- 3 September 198
- JAPAN REPORT
(FOUO 52/81)
_ CONTENTS
SCIENCE /~uJ7 I'EQiNOLOGY
Ibw Chemical's Strategy in Japan, Worldwide Analyzed
(SHUKAN TOYO KEIZAI, 17 .Jan 81) -
Finns Planning To Work With Biotechnology Surveyed
(NIKKEI SANGYO SHII~LIN, 13 Jul 81)
~
~
- a - [III - ASIA 1'~1 ~"OliJ]
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SCIFNCE AND TECHNOLOGY
llOW CHEI~tICAL'S STRATEGY IN JAPAN, WORLDWIDE ANALYZED
Tokyo SHL'KAN TOYQ KEIZAI in Japanese 17 Jan 81 pp 88-98
(Text] Survival Plan for Sada and Vinyl Chloride
A].though the f acade of the Japanese petrochemical industry appears unusually unpe~--
turbed by the aggressiveness of Che American Dow Chemical, an unbearable sense o-
crisis constantly predominates behind the scenes. The Japanese petrochemical
industry, built an a vulnerable raw material foundation, can b~ "wiped out unless
some countermeasures are devised using this issue for momentum. The Dow activity
is a warning bel~" (chairman Fukashi Hori, Asahi Dow).
_ Activities among corporations and groups are being mobilized under the surface tc
respond to the approaches made toward Japanese firms by Dow. If an operational
tie-up and joint Cank construction take place, that will not only create a stir
in the caustic soda industry but may even shake up the structure of the Japanese
petro^_hemical industry.
The strategy toward Japan dieclosed by Dow at the end of November last year
included: 1) long-term mass import of ethyl~ne dichloride (EDC), vinyl chloride
monomer. (VCM) and caustic soda; 2) construction of a tank base ~ointly with
.]apanese firms to receive the imports, with a target partial operational date sec
Lnr the end of 1982; 3) constr~ction of a VCM plant (annual production: 30,000
tor~s; operational in 4-5 years as a joint venture with Japanese firms at a cost L
$l~~ mil.lion. Among these, the import o,: EnC and VCM and the construction of
storage tanks pase an immediate problem to the related industries. The import ~f
caustic soda is eatimated to be ~n a scale of 200,000 tons (dry base) in the ^~.{c
'L years, but the actual scale is likely to shrink considerably since the pro~~ct on
, mu::t }�iF~1d to the demand.
~lso, a r.elated sou~ce calculates that the production of VCM in Japan "will be
delayed at least 7-8 years even if the prcject is undertaken. They don't intend
to start it now. It's only a trial balloc~n announcemenC." In the circumstances,
the focal poinC is YIOLl Japanese firms respond to Dow's idea of constructing a Lan~.
base which ca~ handle an annual dem~nd of 500,000 tons of EDC and 100,000 tons of
VC;~t .
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Usin~; Fixation oF FDC Import as a Lever
Ttie basic rPasons that Dow is aiming at the Japanese market are higher growth rate
ot ~~CM and EDC' than in Europe and the expectation of demand for cost-competitive
Dow products. Al.so, Dow is directing its aim at the moves toward structural
renovation hy the caustic soda industry, which is presse~i by the second manufac-
turing mettiod conversion due by the end of 1984, and the vinyl chloride industry
which is also involved in it.
Lncidentally, in 1.~79, EDC imports increased rapidly to 387,000 tons (double com-
pared to the previous year). Althougti it is estimated that imports dropped to the
?evel of 210,OOU-220,000 tons last year, that figure is still above the 190,000
tons recorded in 1978, which represented a dramatic almost four-fold increase
compared to the year before that.
In the case oF 1978, tli~ increase in the demand for petrochemicals triggered a
scran~ble for ethylene amung polyethylene makers and vinyl chloride makers. Al.so,
the stringency in the supply of chlorine was forecast due t~ the low demand for
caustic soda, which, according to the analysi::~; kindled the expansion of EDC
impor.ts. Last year, these special conditions were eased and the demand for ethy-
- lene was considerably reduced, but the EDC imports have continued at a relatively
}iigh level. This is clearly attributable to the international competitive cost
ciif.ferential of chlorine.
It can be considered that these "pictures which indicate that EDC imports have
taken root in 3apan encouraged T:ow's decision to launch an attack on the Japanese
market" (executi_ve director Okubo of Toyo Soda Manufacturing). Incidentally, it
is said that approximately half of.the EDC imports are Do�w products.
f.,earning From Mistakes
,:~t one time Dow experienced difficulty in its attempt to venture into Japan. Dow
initiated a strategic move toward Japan using the 1972 complete liberalization of
capltal tr.ansactions for caustic soda and chlorine enterprises as momentum. In
1.976, Dow obtai.ned permission to manufac.ture causCic soda, and it also started
import s~les, snowballing its activities which reached a peak with the launching
of a bi~ plan to build a caustic soda plant.
However, the plant site selected had to be changed from eastern Tomakomai to
Sodegaura in Ch.iba, Tachibana Bay in Tokushima and to Hario in Nagasaki due to
opposition by the local communities. The scheme for advancement was after all
cancelled. This failure to advance reflects a background of fanatic opposition
by caustic soda firms, which had been weakened with the burden of the first manu-
Cacturing method conversion, and the strong opposition of the local commurities
toyal to the ].ocal caustic soda ~.ndustry.
rteanwhile, ir is also said that Dow had second thoughts about starting an electro-
lytic enterprise in .lapan, where the energy cost was high.
Learning from these f.ailures, since then Dow has steadily worked earnestly if not
spectacularly in lapan. Already, Dow supplies 7 percent of the chlorine derivativ~.
~~roducts used in Japan, which is equivalent to 60 percent of the chlorine derivative
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~mports. Also, it has a Product Development and Research Institute (establish2d
in 1976) in Cotemba, and a polyole plant using urethane foa~ as the raw material
is also under construction, with operation scheduled for this year, 1981.
The move taken by Dow at this time "is supported b;~ the adequately strengthened
relationship with related companies and by homework well done on the business
world and market structure in Japan", commented a related source.
In addition, this time there are firms in Japan--for instance, Mitsui Toatsu
Chemicals--which are examining Dow's proposal. In short, in the Japanese business
world, there appears to he a change of mood in that the satisfaction of hunger
precedes other matters, even if it means that Japanese companies must ~oin hands
with "notorious Dow," which devoured European markets by aggressive low pricing.
Mitsu Toatsu's t~pproach to Dow
At the moment, Mitsui Toatsu is making stealthy moves regarding association with
Dow. Last year, concernea personnel went to Hong Kong where the Dow Pacific head�-
quarters is located, and made an agreement to draw up an original plan between the
two companies very soon in Haw~ii.
Mitsui Toatsu took Dow executives to the Isumikita plant for a tour, demonstrating
a positive attitude toward EDC imparts and investigation of joint tank construction.
However, Dow has not clarified its intention as to whether Mitsui Toatss can serve
- as Japa:i's window with the right to represent Dow or if it is to be treated merely
as "one of several" upon organizing an import-sales fircn. That is, discussions
between the two companies have not reached a decision concerning the form of the
new firm--a consortivm or the use of Mitsui Toatsu as a sele partner with the right
to represent Dow, ae far as the Japanese side is concerned.
A source close to this deal in Mitsu~ ~:,atsu put it in pers�pective: "It may well
take the form of polygamy. Although it depends upon the volume of transactions,
that form might help us to alleviate the riek of totally depending on Dow." In
such a case, the new firm might even be on a near commercial basis.
'I'he name of Mitaui Toatsu is said to have been initially used in a release dis-
tributed at a press conference held ~y Dow. However, Toatsu arranged to have it
altered to the phrase, "construction of tanks jointly with Japanese firms...."
The alteration, a related source pointed out, is evidence that the relationship
bet~eeen Dow and Mitsui Toatsu irs consolidating at a rapid pace. Meanwhile, another
related source expressed the opinion: "The relationship bettween Dow and Toatsu
does not ap~ear to be progressing as fast as the Dow side wants it to appear."
- i.t is suspected that Dow hae also felt the pulaes of all vinyl chloride makers in
addition to Mitaui Toatsu, such as the Shin-Etsu.Chemical Industry. This leaves
room for speculation that Dow might tie up with a f~rm other than Mitsui Toatsu or
with multiple firms. One source considers that the Oita Center of Showa Denko,
which can offer tank base grounda as well as users in its proximity, is the best
contender, although it is not a vinyl chloride maker.
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- The Japanese side, as seen in Mitsui Toatsu, is obviously inve~tigating Dow's offer,
because the structural problem of Japan's vinyl chloride industry and the problem
of the second caustic soda manufacturing method conversion are intertwined.
Vinyl Chloride Industry Renovation Plan To Be Tacked On
The vinyl chloride industry led by the Vinyl Chloride Industry Association charted
a structural renovation plan during the prev~ous antideFression cartel period (May
1977 to August 1978). Hawever, three companies--Toyo Soda, Nissan Vinyl Chloride
.(a productian subsidiary of Nissan Chemical Industries) .:nd Tokuyama Sekisui--
announced their intention not 4:o participate in this structural renovation plan.
Ldhile the Vinyl Chloride Industry Association continued to urge the three to change
their mind, demand was renewed and so the structural renovation plan was shelved.
This industry has encountered a downpour of depression since the spring of last
year after the boom of 1979. It looks like it ia constitutionally predispose~ to
"suffer from the progress of a malignant illness after recovering from one sick-
ness" (executiv~ director Fukae of the Kureha Ch~miCal In~iustry).
The vinyl chloride industry traditionally maintains exce~sive equipment and peren-
nially maintains a priee war which can be criticized as being excessively competi-
tive. In particular, the confrontation between the vinyl chloride monomer group
and the polymer groups is fierce. Furthermore, the heavy burden of the manufac-
turing method convPrsion is an extra drag on the industry since many firms have
branched into the field of soda and chlorine electrolysis.
~ In the circumstances, the companies may agree in general with the theory of scrap-
ping equipment, but the realization of the idea at each step of the theory will be
difficult in view of the growing conflict among them.
Recently, Mitsubishi ~Ionsanto Chemical of the Mitsubishi group suspended production
of VCM (annual production 80,000 tons) and caustic. soda (annual production 200,000.
tons) at the Yokkaichi plant, and decided to aubcontract and concentrate production
at the Mizushima plant of Ryobi. They signed a sales contract for Mi~tsubishi
Monsanto to sell polyvinyl chloride (PVC) to Ryobi starting in 1978, but. their
tie-up advanced one step further to the intensive production of V~'M. This deal
was made rather smoothly to concentrate the operation within the Mitsubishi
Chemical Industries group. Even amoa~g different business gro~ips, three companies--
Asahi Glass, Kureha Chemical Industry and Shin-Etsu Chemical Industry--have
affiliated operations extending over vinyl chloride and soda. This agreement is
built upon the tie-ups between Asahi Glass and Kureha Chemical Industry and between
Asahi Glass and Shin-Etsu Chemical Industry. As a result, Kureha Chemical Industry
suspended the annual 100,000 ton crude oil cracking operation in the VCM installa-
tions at the Niahiki plant, which suffered from the surging energy costs.
Similar to the Kureha Chemical Industry, the VCM installation at the Takaoka plant
of Japanese Geon, the original process of which became unprofitable after the oil
shocks, was closed down in June 1979. This move increased the operational ratio
of Ryobi and Sunarrow and was also connected to Che EDC imports from Dow.
In spite of these partial ad~ustmenta, the present state of ttie total picture of
structural renovation, including scrapping of equipment, is very slow and frus-
trating.
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Shackled by Soda Manufacturing Method Conversion
The structural renovation of the vinyl chloride industry is closely related to the
caustic soda manufacturing method conversion. Caustic soda production capacity is
4.46 million tons per year (of which 1.65 million tons, or 37 percent, is made by
; the mercury method). Only the Noboribetsu mercury method installation scrapping
- plan of Hokkaido Soda distinguished itself, along with that of Nippon Carbide
Industries, during the second msnufactur..ing method conversion drive (to the ion-
exchange membrane method in FY-80). Asahi Chemical Industry, Asahi Glass and
~ Tokuyama Soda, which have their own technology, an ion-exchange membrane method,
are expected to convert the remaining mercury method~installations in 1981-82,
earlier than the designated end o~ 1984 deadline. However, the remaining ffiajority
of firms so far have given no signs of starting to change the existing installations
until the very end ef the deadline.
In some cases, howe~er, the possibility exists that some makers will get ambitious
enough to scrap a11 or part of the remaining mercury method installations. This
passive attitude reflects the heavy pressure of the cost of converting to the ion-
exchange membrane method, the unpromising outlook in demand for soda even after
the conversion, and the question of the cost competitiveness of the vinyl chloride,
including the concurrently produced chlorine, in the case of the makers which also
produce vinyl chloride.
Dow is charting its current strategy toward Japan as follows: "Japan's chlor-alkali
industry ie in a whirlpool of struct~:ral reorganization, such as closing of plants
or the closing of ins~allations in stage~. Dow will fill the supply and demand
gap created as a result of this reorganization" (president A. J. Butler of Dow
Pacific). At the same time: "We will provide a long-term stable supply to meet
the demand of the customers" (Butler).
Dow's pronouncement, no matter how softly it is expressed, is a written challenge
to the Japanese industries, which are suffering from the caustic soda manufacturing
method conversion and the structural renovation of the vinyl chloride operation.
Mitsui Group's Possible Reorganization
'1'he necessity of concentrating vinyl chloride manufacture in the Nagoya and
Izumikita plants has been talked about for a long time at Mitsui Toatsu, which is
trying to approach Dow. Ethylene at the Nagoya plant is transported from Osaka
Petroleum Chemicals (OPC), and is relatively expensive. In caustic soda operations,
Osaka is limited Co the mercury method and Nagoya is limited to the membrane method.
The cost will rise if Asaka's manufacturing method is converted. Therefore, the
plan to purchase EDC from Dow ia credible.
- However, if EDC is purchased, a large bottleneck will be created for OPC to consume
ethylene, since the company doea not maintain a polyethylene operation but manu-
factures ethylene of high specific gravity for vinyl chloride use.
There is every indication that the plan to concentrate the vinyl chloride produc-
tion by the Mitsui group, such as Toa Gosei Chemical Industry, Electrochemical
Industry which is semi-Mitsui group, and Kanagafuchi Chemical Industry, may have
been triggered by the Dow EDC import plan. However, there has been no sign of
actions by Mitsui Toatsu to influence others in this direction.
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i~evertheless, Electrochemical Industry is quite volitive: "It is very risky to
join hands with Dow, but the vinyl chloride ~nterprises of toa~orrow will seek a way
to obtain inexpensive raw material's. We will be very interested if Mitsui asks us
to join in the sch~me to institute a EDC import company" (vice president Shinohara).
Kanegafuchi Chemical Industry remains cool and is merely observing the situation.
Its EDC imparte from Dow were the top-ranking in Japan in terms of transactions
by yen until 2 years ago, including production on consignment for Korea. It buys
ethylene from OPC. It might affect OPC's ethylene consumption, but it would be
geographically advantageous for this company to decide to act in concert with
Mitsui Toatsu.
If Dow and Miteui Toatsu happen to head for a consortium, participation by Electro-
chemical Industry and Kanegafuchi Chewical Industry remain possible. Related
sources comment on the establishment of such a coasortium: "It would hold a
quantitative bargainin$ power. If only one compar.y participated, it would be
criticized to the effect that the combine (complex) structure would be destroyed."
One thing that attracts attention in connection with the caustic soda manufacturing
method conversion is the Kajima complex. In this area, Vinyl Chloride Monomer
(capital invested 50 percent by Shin-Etsu Chemical Industry, ~5.percent by
Mitsubishi Petrochemical, 10 percent by Asahi Glass, 10 percent by Kan~gafuchi and
5 percent by Asahi Denka Kogyo) proudly produces vinyl chloride monomer on the
largest scale in Japan, accounting for an annual production of 270,000 tons.
Chlorine is supplied by Ka~ima Electrolysis (capital invested 25 perc~nt by Asahi
Glass, 23 percent by Shin-Etsu, 23 percent by Asahi Denka, 21 percent by Mitsubishi
Petrochemical and 8 percent by Kanpgafuchi).
Incidentally, Ka~ima Electrolysis is equipped with Japan's most advanced large
mercury method installation. It hasn't been converted yet at all. The burden of
conversion will be enormous. If by any chance it ia ~crapped instead of converted,
the adverae effect that will fall upon firms which totally depend on Kajima Elec-
trolysis for chlorine, such as Asahi Denka, will be immeasurable.
With this in mind, it is very difficult for Ka~ima Electrolysis to make a fast
move. Some calculate the possibility for the Ka~ima complE~x to serve as an import
base for pow's producta ~udging from the geographical location. However, this is
generally considered uniikely to take place in view of the presence of Asahi
Glass, which has developed a new ion-exchange membrane technology.
Likewise, the poeition of previously described Ryobi, which has. concentrated pro-
duction within the Mitsubishi Chemical Industries group, is also delicate. This
company supplies VCM to Japaneae Geon (Takaoka) and iCanegafuchi ChE~mical (Takasago
and Osaka). If these two companiea start to show same move associared with Dow,
it will affect the caustic soda manufacturing method conversion by Ryobi. The
ratio of the installations of thia company not converted is 42 percent.
There are more soft elements still remaining in the relationship between Dow's
aggressiveness and the Japanese side, which is countering it. Nevertheless, "going
against the current of the time does not work for Japan's petrochemical industry"
(director Kenichi Watanabe of Showa Denko). A black ship named Dow may become the
firat blast pressing Japan's chemical market to open up its gates in earnest.
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NOR OFF'1('IAL l)SN: l)NI.Y
rigure 1. Placement of Vinyl Chloride Mono~ner and Vinyl Chloride Polymer
Installations (production capacity 1,000 t/year)
q*~i: I I� P H
P!yY 3 71 M~~~~~~ i27.
~ a ~4 iu.s �
M tll~E/'v-Ej i~ _ M =4F~~ � $ ~ .
{dw . P ~~kt+*i�~ 77
41 P � ~A 27.5
' P 7i7t7-1t* 82
~tU~~lc ~ � P !!![it# � s9.5 '
7Y70-1t 114 � ' M J2
M ~ll1/~ I.Z 200 �
~t~t3t.~ in . f� M~~Tt~ � t~25 i o.s
~ P !![~t~ � :!l111 59
, / 1~
P Aa1t* ~ .
RMit~R 2 190.5
� , M t~11~~/v- 270-
~ F 58.5 ~ i�
� M s~~~�~~ ~ ~~it~
. P'~i% SI
. ~ ~tit~t�s~a~ u.s . ~ t~~tr* 34 : ss
~~Ir~ ~3
~ ~ P~'It+l~ �~liit i i fi~~t~~ i~- iso 6
_ n~~ roe f~~.7 ~o.s 7
� M 290 M 9~it~ 60 8
8~1te--,~ eo 9
- : M it~tn*. ~ y c e o c)
, - JII 14 0 �
M t�Y %�~Ic* t9.5 P 1111R~ ~O � 1
19~ ~3.s M t.r~~wt~ eo 2
,
Note: P for polyvinyl chloride, M for vinyl chloride monomer
Icey :
1. Mizuahima 22. Japanese Geon-Takaoka
'l. Japanese Geon 23. Asahi Glass-Satauki
3. Chisso 24. Electrochemical-Ome
4. Ryobi 25. Kureha Chemical-Nishiki
5. Ryobi 26. Electrochemical-Shibukawa
6. Sanyo Monomer 27. Ka~ima
7. Tokuyama, Nanyo 28. Kanegafuchi Chemical
8. Shin-Etsu Chemlcal 29. Shin-Etsu Chemical
9. Sunarrow Chemical 30. Ka~ima Vinyl Chloride Monomer
- 10. Tokuyama Sekisui 31. Chiba
11. Sunarrow Chemical 32. Electrocheanical
12. Tokuyama Soda 33. Chisao
1:3. 'foyo Soda 34. Sumitomo Chemical
14. Mitsui Toateu-Izumikita 35. Nisean Kagaku
L5. Toa Gos~i-Tikuehima 36. Chiba Vinyl Chloride~Monomer
16. Kaneg~fuchi Chemical-Setteu 37. Asahi Penn Chemical
l7. Knnegafuchi Chemical-Takasago 38. Niaean Chemical
18. Sumitomo Chemical-Niihama 39. Japan Vinyl Chloride (EDC)
19. Ctiiseo-Mizumata 40. Kawasaki
2U. 'l'oyo Soda-Yokkaichi 41. Kawasaki Yuki
21. M.Ctsui Toatau-Nagoya 42. Central Chemical
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1~()R ()I~N'I('IA1, IItiN: ()NI.Y
Last Moment of Complex Era
In Alberta, Canada, where Dow is planning to place a supply station for EDC and
vinyl chloride monumer to be shipped to Japan, a gigantic petrochemical complex
is b~:ing built. As a first-stage project, an installation that produces 540,000
tons of ethylene a year has been operating since September 1977 in the hands of
local capital, Alberta Gas Ethylene.
Dow takes all of the ethylene produced and manufactures 200,000 tons of vinyl
chloride monomer there. And 450,000-ton class installations are being ne.wly con-
structed for EDC, soda, chlorine and EO-EG. A 3,000-km pipeline has been laid
between Fort Saskatchewan, where the plant is located, and the Dow Sarnia plant in
Ontario so that the remaining 180,000 tons of ethylene can be used as a raw material.
Products from this Sarnia plant will be shipped to the gulf coast on the east coast
_ of the United Statea, which is truly a mecca for petrochemistry. An average 10
percent duty is applied to exports to the United States, so the cost competitive-
ness is not necessarily good.
The key products are derivatives which will be transported by rail from Fort
Saskatchewan to Vancouver. This stretch is only half the distance to the Sarnia
plant. Fort Saskatchewan has bountiful natural gas and rock salt, and electricity
is also inexpensive. Products costing less than 100 y~n (around 170 yen in Japan
at present) per kilogram, on the basis of the ethylene price, arrive in Vancouver.
Commodity circulation bases such as EDC tanks and ships for exclusive usE have been
already constructed in Vancouver. Since only some 20 percent of the national
demand exists on the west coast of the United States, they were certainly placed
there to aim at the Southeast Asian markets. EG and the like have already arrived
in Japan.
The second-stage and third-stage projects are being formulated in Alberta with the
target operational date set at 1984 and 1986 respectively. The total ethylene up
to the third stage will be on the 1.8-million-ton ecale. As ethylene derivatives
of the second-stage pro~ect, intermediate and low preasure polyethylene of Dupont,
styrene monomer of Exxon or Shell and LLDPE (a third kind of polyethylene) of Dow
are named as candidates.
The total Canadian ethylene and polyethylene production will be 3.5 million tons
and 1.7 million tons (currently 60Q,000 tons) reapectively in 1990, and some pre-
dict that two-thir.ds of the prcducts will be exported.
Repositioning of Pacific Sphere
These positive activities in Canada are very characteristic of.the future petro-
chemical development. In the United States, raw mate?-ial costs will be 30-40 per-
cent cheaper than in Japan and Europe due to the domes!:ic price control over crude
oil and natural gas. T'nis price control is expected to be lifted (decantrolled)
in September 1981 for crude oil and in 1985 for natural gas. After the decontrol,
it is obvious thaC the competitiveness of American products will be lowered.
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Also, in the United States, oil c:apita~ often enters into the petrochemical business.
The present shares of each petrochemica~. product held by the oil company group in
the United States are 60 percent in ethylene, slightly less than 90 percent in
benzene, 60 percent in polypropylene and 40 percent in polyethylene.
These shares Fertain to either refined products or primary reactio-~ products. With
fuel consumption regulation over passenger vehicles, gasoline demand is expected
- to drop. The oil companies are aggressively looking for a new source of profit in
petrochemistry. The weight is, so to speak, shifting from conventional petro-
"chemistry" to "petro"chemistry.
Adding to the forecast decline of the raw material advantage in the United States,
competition between oil and chemical capital has opened an overseas rush to seek
resources.
Furthermore, im~estment in advanced areas--Canada, Alaska and Australia--is in the
limelight. These areas a11 belong to the Pacific sphere. The repositioning of
outposts in this sphere that involves the Japanese pttrochemical industry is shaping
up.
Absolute Advantage of Resource Holders
~ In the past, the world's petrochemistry was established in Japan, the United States
and Western Europe where gigantic demand existed, and was developed by each supply-
ing i.ts own market. The annual demand for ethylene in each area is 4.2 million tons
in Japan, 13 million tons in the United States (estimated) and 12 m.illion tons
(estimated) in Western Europe.
Southeast Asia, flanked by the~e areas, currently shows a very small demand, 200,000
tons (estimated), although it has a potential growth capacity. Southeast Asia is
relegated ta being an export market of Japan, the United States and Europe. In the
past, basically only the excess aupply of each area was put out for export, a
pattsrn where domestic demand had priority and the surplus was ~xported.
The basis for these mar~Cet location type tripolar structuxes was that they could
secure inexpensive raw materials and en~oy the benefit of large-scale investment.
However, midwifed by the two ~il shocks, the absolute advantage of the rpsource
holder revealed itself at last when 80 percent of the total cost of universal chemi-
cal products was claimed by raw material costs. Among the tripoles, the petro-
c:hemical industry of the TJnited States is blessed with the optimal condition of
_ having the market location as well as the resource location, and it retains out-
standing competitive power.
Un the other hand, the Japanese petrochemical industry's international competitive-
ness rapidly declined. 1. 1975, after the first oil shock, domestic demand dropped
drastically, and the surplus, mainly the universal use resins such as polyethylene,
was placed for export. I~ a3dition, im~orts dropped drastically (see Table 2).
`I`his happened at a time when the price of domestic products was relatively expen-
sive, 1,OQ0-2,000 yen per kiloliter, compared to the imported naphtha, because the
price of raw material naphtY:s was still on the rise i~n 1975-76.
9
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I~()I2 ()1~1~1('i;ll, litil~: ()NI.Y
1'able l. Cont�nuous Depression of Exports
(unit: 1,000 tons,
. _ 2 3 4 5 ~ � --n-... . ~
_ ~ ~o i ss u
8 : s ~ . ~ ns ~s ~~r ~u aw sia
(19.!) (31.9) (25.5) (29.8) (23.9) (14.1) (24.9)
9~:nyQe~. 100 154 116 14Z 161 ~ 98 '48
(2Y.6) (25.9) (17.2) (23.3) (21.6) ~9.6) f6.1)
10 e~~! 147 131 119 90 54 ~ 82 48
~ (30.0? (11.?) (11.4) (8.8) �(4.4) (5.2) (4.0)
11 tt e=~ ~ P- 64 117 166 i81 250 105 .
(5.D) (9.0) (12.41 (12.1) (8.1) (7.4)
12 Y;i: 9 x# u i. 69 69 ' 81 ~ 88 98 90 6~
(S.1) (5.8) (7.0) (9.8) (9.4) (7.3) (12.3)
13 aX}~,~/v- 98 73 b8 40 41 18 2
(D.5) (8.9) (5.S) f8.9) (3.8) (1.3) (0.3)
B T X'{0~ 4~? 2Z9 300 381 'J41 3d0
~10.1) (T.4) (5:8) (7.4) (9.2) (7.8) (10.3)
E G - 10� 20Y 42~ 147 71
(45.8) ~38.8) .(95.0) (~.BI (18.SI
14 aa~~aio~l~te~#~tit, c ) v~i:~~tr_xtttM~s~
15 ttUrh) ~e*1[~AMt~, ~1t~s~~tttA1R, +~SfM~t
~
Key:
1. 1974 11. vinyl chloride monomer
2. 1975 12. polyst:yrene
3. 1976 13. styrene monomer
4. .977 14. (Note) Actual val~e gained up to October for
5. 978 1980, figures in are export ratio to
6. .~979 production.
7. 1980 15. (Source) Prepared from NIHON BOEKI GEPPO by
8. polyethylene the Ministry of Finance and KAGAKU KOGYO
9. polyprolylene TOKEI GEPPO of the Ministry of International
10. vinyl chloride resin Trade and Industry
Table 2. Basically Increasing Imports
(units ~,000 tons)
qa , i 1 18
E D`C l~f ' f!O 6! 3Yi 3/a 177'
9 ne n ~tt ~ y u ~ 4 ~ a~ u
10 X~'~Y~/~~` b o ia ia ~ e~ es
11 ~s~-w~l~ ia ~ i~ sa s~ a-
~ s r x a� i~a ev iae ieo ~
s~ a. ~e o a. ~ s~ s~ ee
12 Tf9saE~1~ - 6 7 0 ~ 90 6A
13 7 A ie u as 4a
fik) 66~Ff3101li~C~~IR~ (tll~IF)~~t~B~kf�1lla~
14� 15
Key:
l. 1974 9. polystyrene
- 2. 1975 10. styrene monomer
3. 1976 11. phenol resin
4. 1977 12. acrylonitrile
5. 1978 13. synthetic rubber
6. 1979 14. (Note) Actual value gained up to October for 1980
7. 1980 15. (Source) NIHON BOEKI GEPPO by Ministry of Finance
- 8. polyethylene
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N LY
Ir contrast, this time, the surplus cannot be turned to export. Yet, imports are
iiicreasing noticeably in the sector of bulk products. It is natural that exports
di~opped in 1979, when there was nothing left to export because of the stringent
supply of raw material and the favorable domestic demand. However, exports did
not recover even ~hen the domestic demand fell in reaction in 1980. This is be-
cause European products were the only competitors to Japanese products in the export'
market encirc~ing Southeast Asia during the previous recession, while at present
overwhelmingly cost-competitive American products have made a conquest of the mar-
ket. For example, some vinyl chloride resin products on the market are even cheaper
than the price of Japaneae ethylene. .
Others Besides EDC Await an Opportunity to Flow In
The American petrochemical indu~try had a small exportable surplus in the past,
showing an export ratio of an average 10 percent, siihilar to Japan. The drop in
automobile production and the housing slump gave a devastating blow to this indus-
try in the United States, wliich prim$rily caused the universal use resin business
to tumble down from the second quarter of laet year. The drop in demand hit
bottom, but the recovery is painatakingly slow.
These stagnant buainess conditiona are one of the factors preseuring exports. The
fact thaz there are other factora makes the root of the trouble deeper. No new
ethylene inetallation pro~ects are called for after 1982 in the United States. In
this reapect, it can be said that no installations will be built for ex~ort pur-
poses.
- However, this is true oniy within the boundary of the United States. Overseas
investment, which is expected to continue in the months to come, cannot be con-
sidered without constant exporte. The current export aggressiveness may convey
by and large an impression of preeale.
"The queation of EDC �rom Dow raised at this time will not be limited to this item.
Any products carried in bulk will be built into a long-term strategy," is the
frequent serious reaction (director Kenichi Watanabe of Showa Denko).
Indeed, looking at Table 2, EDC imports dxopped in 1980 compared to the previous
year, when the shortage o� chlorine and ethylene dramatically accelerated EDC
imports, but styrene monomer, ~G and acrylonitrile imports showed an upward trend.
Vulnerability of Japanese Industries
~ If export aggreasiveness in Japan and Southeast Asia intensifies, Japan, to counter
thie, can also scheme to obtain overseas locations for pursuit of inexpensive
resources. This is a reasanable theory. However, the Japanese petrochemical
induatry unfortunataly does not have enough real power to assume the role of an
advantageoua reeourca holder.
In Singapore, a 300,000-ton ethylene operation, palyethylene, polypropylene and
EO-EG operations are expected to be initiated in the fall of 1981 under the leader-
ship of Sumitomo Chemicals. This is not a raw material location, but an oil
refinery base. It is certain that the coet competitiveness will be low. Also,
the securing of marketa ma.y encounter difficulty since the project was not approved
by ASEAN. In addition, the more etringent pollution control may affect the project.
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Meanwhile, Saudi Petrochemical is located in a nation which has resources but which
suffers from political instability. It is often considered that normal operation
will meet with difficulty from the aspect of technical transfer. "If a large
_ deficiency does not appear, we must celebrate, under this system which gives
priority to national interests" (a related sourc~). The co;apany is relieved to be
able to scale down to 500,000 tons of ethylene following a~oint operation agree-
ment with Dow.
With the example of Mitsui's failure in Iran adde3 to the uneasiness, the purpose:
of opening busineases in the developing nations, alChough they may have resources~,
is fading away in the petrochemical industry. In Iran Petrochemical, there was a~
plan to bring EDC to Japan. The facr that Mitsui Toatsu is whetting its appetite:
to purchase EDC from Dow may be one of the indications that the Iran route has
been virtually "given up". This aesumption is further supported by the [~ustra.li~i
Redcliff Pro~ect anaounced by Mitsui Toatau with Asahi Chemical Industry.
"Economically, Canada is preferable, but Redcliff also has natural gas. It may
even have oil; we cannot be ab~olutely suree We might even be able to obtain the~
right to hold reaources," is the explanation of the advancement plan (Mitsui
Toatsu).
However, preceding this, there w~s the episode of Mitsubishi Chemical Industries
and Mitsubishi Corporation implementin~ a feasibility study. According to the
results of the study reported at that time, "money will be consumed by stagflati~~n
investment, and the natural gas will not even last 10 years." The fact that Dow
was hesitant to start a feasibility study and lost the option may have been due ~to
such circumstances.
On the other hand, Mitsubishi Chemical Industries acquired the right to implement
a feasibility study at Prudhoe Bay in Alaska "by following the trail of the Dow-
Shell group."
However, the problem there ie the ownerehip of natural gas. The assurance given
by the atate government for ttae location was the aupply of natural gas held by the
atate. But the state owne only one-eighth of the entire Prudhoe Bay natural ga~,
and so it "can be worth only a 100,000-ton ethylene installation" (Mitsubishi
Chemical Industriee director Hiroshi Watanabe).
Dow is currently negotiating for the remaining seven-eighths of the natural gas with
Exxon, which owae it. In aay case, the vote of Mitsubiahi Chemical Industries which
has the right to hold resources ie not significant.
Another example of a~oint venture is five companies--Mitsubishi Chemical Indus-
tries, Mitaubiehi Petroch~mical~ Mitsubishi Corporation, American Occidental
- Petroleum and Canadian Dotne Petroleum--which have agreed to promote a petrochemical
- complex pro~ect that will produce 3009000 tons of ethylene, 100,000-150,000 tons of
high pressure polyethylene and 300,000 tons of EDC in British Columbia, Canada.
"We would like to handle this as carefully as we are handling the possibilities in
Alaska" (Watanabe, Mitsubishi Chealical Industries).
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F(l~R OFF'1('IAL U~E ONI.Y
Are More Coming To Approach Japan'
As described above, Japan's petrochemical industry is vulnerable in light of the
fact that it does not have the advantage of being a resouxce holder. At the same
time, Japan's petrochemical industry has not acquired a global market, and cannot
graduate from the.practice which grew up during the daqs of the Japan-U.S.-Europe
tripolar structure.
The overseas sales ratio of American petrochemical f3rms has reached a high level,
for instance 50 percent for pow, 40 percent for UCC and 30 percent for Dupont,
whereas Japan's Mitsubishi Chemical Industries, Mitsui Toatsu, Showa Denko and
Sumitomo Chemical all maintain only a 10 percent level.
- As seen in Saudi Arabia and Singapore, Japanese petrochemical companies acquired
capital power in the form of a consortium when they advanced overseas, and they
often supplemented informatioa networka and selling power by the participation of
trading catnpanies. Even with this preparation, the Japanese firms made good only
in the Japaneoe tnaYket or the limited Southeast Asian market. If production
activity is atarted in an oil-producing nation without a solid new marret, the
products can be sold only in the existing m~rket.
Overseas locations are associated with the problem of delivery of goods. American
teams can easily take the defeneeless naked Asian market and are familiar with the
ins and outs of the West European market, but they can get snarled up in the
Japanese market. But if only there is a pilot, they can come in any time.
Americans will not play a power game by setting up a damestic or foreign ~oint
concern or a conaortium to sweep Japanese industries off Cheir feet, but will
devisz a way to envelop Japan for a landing:
. Japan's market is immense and has further potential growth compared to the American
and European markete. It is posaible to coneu~ie the inflow to an extent. Never-
- theless, the high growth rate of an annual 20 percent increase that Japan once
enjoyed ie now beyond her dream. The market is large, but not enough for a living
for ourselves and the incomexa" (Watanabe, Mitaubiehi Chemical Induatries).
The American goods offensive led primarily by bulk products is, however, inevitable.
Now we have plunged into the time when the Japanese petrochemical industries must
set up an operational atrategy in proportion to this attack. And on the other hand,
we must carefully avoid any policies tinged with protectionism such as an import
narrier that wi11 impede a rati.onal conversion. ~
Collapaing Complex StrucCure
From the starting point of the Japanese petrochemical industry in the decade from
1955 to 1965, it was necessary to establish a production system that used naphtha
as a etarting raw material and collectively utilized propylene fraction, butane-
butylene fraction and cracked' residues which were produced in connection with
ethylene. Large-scale operations were sought to gain the economies of scale and
comprehensive operations to utilize each fraction efficiently.
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'1'o each complex, new industrialization of polypropylene and acrylonitr.ile and
acetoaldehide manufacturing method conversions were implemented in the latter half
of the decade. In addition, electrolysis equipment, ammonia and methanol were
also incorporated into each petrochemical complex.
The cost reduction achieved by these large-scale, comprehensive operations increased
the demand for products to be used for automobiles, home appliances and synthetic
fabrics and created a demand for products used as paper and iron substitutes. A
happy cycle appeared when these expanded demands made larger scale operations pos-
sible, recreating the increase in demand encouraged by the further cost reduction.
~ Since the first oil shock, however, the faults in the complex structure have been
revealed by the integral effects of the unbalanced moves in demand. A further blow
from an incre3se in foreign imports such as EDC could wipe out the balance of the
integrated effective utilization of various continuously produced fractions that
serve as the main pillar of the complex structure.
Inevitable Reorganization .
The 500,000 tons of EDC imports that Dow is talking about far surpass the production
of a single complex. The largest EDC installation in Japan is Tokuyama Doda's
200,000-ton acale operation. Even adding the 180,000 tons of vinyl chloride
monomer produced by Sunarrow, which ranks parallel with the Idemitsu Petrochemical
and Tokuyama Complex, the total production is slightly over 400,000 tons in terms
of EDC.
And 400,000 tons of EDC is equivalent to 280,000 tons of chlorine and 120,000 tons
of ethylene; this amounts to a large nart of the complex. This is true of
acrylonitrile and EG. Even if the ethylene supply is greatly depleted, the products
manufactured in connection with ethylene such as olefins may be still needed, which
creates a large imbalance.
Japan's petrochemistry must rely on foreign raw materials for crud.e, naphtha or
intermediate raw materials. If naphtha which is customarily imported is replaced
by an inCermediate raw material which is obtained lower on the production line than
naphtha, materials in the atream above thia point will become unwanted.
The industry ie pressed to cope with this from both sides--which product should be
produced in order to be the moet rational (horizontal), which stage of the produc-
tion system should the Japanese petrochemical induetry choose to start production
(vertical).
In Japan, where uaera are very critical of product quality, the inflow of monomers
as intermediate raw materials may be acceptable, but polymer imports will not be
readily received in the market. However, in the field of LLDPE, where competition
for technologicgl development has intensified, rivalry for a share of the market
is in evidence, including foreign technologies such as those of UCC and Dow. In
Alberta, ventures by Asahi Chemical Industry with Dow technology or by Asahi Dow,
a subsidiary shared 50-50 by the two companies, are being considered. Also, Nitto
Chemical Industry auppliea acrylonitrile to the parent company, Mitsubishi Rayon,
but Mitsubishi Rayon~ in a move going beyond the business affiliation, is substitu-
ting inexpensive imports for part of the supplies.
~14 ~
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k'resident Hisashi Ki:rokawa of Mitsubishi Petrochemical says: "The second-stage
- project of Kajima cannot be a c~py of the first stage." If this statement is
applied to existing complexes, a reorganization and reconstruction of the com-
plexes are perhaps inevitable.
Intensified Dow Tactics to Grab Warld Market Shares
Among the world chemical industries, Dow Chemical is well known as a firm which
has most aggressively enforced multinational development. The weapon it uses for
this development is not particularly special.
Dow's approach clings to a very simple and crude theory that calls fur the mass
production of universal goods at a bottom low cost and the expansion of markets.
The main strength is the world's largest and most competitive chlorine products,
specifically, vinyl chloride, sCyrene, and polyethylene. Furthermore, Dow's
= business practice dictates that ic not get its hands into polypropylene at all,
although it is a universal reain, and that it deal only with EDC and monomers,
but not with polymers even among vinyl chlorides. To maintain competitive
strength, Dow's conventional practice calls for locations advantageous from the
aspects of raw m_.~erial, energy and~cost, and purauit of an all-out scale of mass
production.
In Pursuit of Natural Gas
After the first oil shock, Dow sought plant locations advantageous in resources,
on ~ne hand, and extended its areas beyond the traditional European and American
cultural sphere, on the other hand, with outstanding developments in Asia, the
Pacific and Central and South America, especially in unison with the rise of the
moderately developed nations.
- After the oil shocks, the world chemical industry entered into an era in which a
serious question aroae regarding whether petrochemiatry is downstream of the oil
industry or still in the genre of the chemical industry. In reality, the large
equipment investment for petrochemistry in the latter half of the seventies was
overwhelmingly made by the ma~or oil companies or crude oil holders such as the
oil-producing nations, rather than by the purE:ly chemical firms. In the midst of
this trend, Dow intensified its move toward u~~stream by attempting to counter the
ma~or oil companies. It made a series of offe:nsives--resource exploration in
Canada together with Dome Petroleum, expansior. af the service business of the
dowel [phonetic] sector to the oil industries, holding of lignite deposits in
Texas, and a crude oi1 refinery installation (180,000 barrels a day) in Oyster
Creek, Texas. It also holds coal mining areas in Australia.
This company is self-supporting in 80 percent of the electricity it uses, and
holds more than 10 percent of the natural gas it uses from its origin. However,
these strategies are powerless against the oil ma~ors, which formulated a scheme
for control of the well spring of resources. It can be said that they are merely
measures to maintain bargaining power.
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Figure 2. Worldwide Network of Dow Bases
~ it~~~ :~'?~9rr14~6~~!
,,D ~
~ ~f~' .rY
~
i
1 ~ ~ .
2. ,~3
~ 6 7 ~
.
. M ~*13 .
~ ~
. 12 ~ + ~ ~ .
4 ~ ~ ~
w~'`
. 5 , ~
~ F~~17 16
. S!. ~i' ~ " ~ .
� ' Y
, , . . - �
Key:
l. Alaska 7. Holland 12. Saudi Arabia
2. Alberta, Canada 8. Germany 13. Japan
3. Midland, Michigan ~ 9. Yugoslavia 14. Korea
4. Colombia 10. Italy � 15. Hong Kong
5. Brazil 11. Spain 16. Australia
6. England
A truly discreet approach is to bring a large plant to an area where inexpensive
and plentiful resources are available.
'rhis idea was embodied by the ventures into Alberta, in Canada, the Alaska pro~ect,
the Redcliff pro,ject in Australia, the Saudi p~o~ect and the projecC to advance
into northern England and directly connect to the North Sea oilfields (liquefied
natural.gas). It also still has a project for advancing into developing nations
witti resources, such as Indonesia.
c~C ~tiem all, the Alberta pro~ect was the first to be completed. In Canada, there
I:: cilso the Sarnia plant, which was the company's first venture into a foreign
country in 1946 and was built in a province ad~acent to Michigan (where the main
of.fice of Dow is located, in Midland). This is the largest chemical plant in
Canada, and it produces vinyl chloride, styrene and polyethylene.
The large-scale operation of the recently built Fort Saskatchewan plant in Alberta
will. make a pair with the Sarnia plant Chrough pipelines.
'l't~~ province of Alberta has shown interest in promoting second- and third-stage
~~rajects similar to the petrochemical enterprise to be completed in 1983 and 1986
respectively. It is said that Dow has already demonstrated a desire to get
i.nvolved in the second-stage project. 16 '
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'['o Australi~, Saudi Arabia and the North Sea
In addition, in Alaska, where somewhat of a boom has been evident in recent years,
Doa went into business at the head of a large consortium and acquired rights to
r.onduct a feasibility study of Prudh~e Bay on the Arctic coast. This consortium
i.s made up of eight companies, including two key companies of the Dow-Shell combine,
_ A~a.hi Dow, Mitsubishi Chemical Industries and Dupont, etc. According to the project,
a pigeline will be installed vertically across Alaska from Prudhoe Bay to the Kenai
Peninsula on the south coast. A gas separation plant, a 450,000-ton ethylene plant,
a 200,000-300,000-ton class polyethylene plant and a 250,000-ton EG plant will be
constructed by 1985. The total investment reportedly will excee~ $3 billion ($1.4
billion for the pipeline alone). This will be connected to Alberta and the American
mainland ev~entually by pipeline, according to the blueprint.
On the other hand, an oil refinery plant in Oyster Creek, Texas in the southern
United S~_ates was~completed last apring. It is not only scheduled to supply naphtha
to an e+:hylene plant (540,000 tons) which consumes 200,000 barrels a day and is
newly bsilt in Louisiana, but also to establish a raw material fuel self-supporting
system for factories scattered in the gulf area. Meanwhile, the company is trying
to establish a self-supporting system by holding lignite for electric generation in
Texas.
The pursuit of resources has not been confined to North America. Although Dow's
option in the Australian Redcliff pro~ect was revoked by the local state government
last October due to a long delay in the project, since the latter half of the seven-
ties, the project "will never be abando~4d. We definitely want to go ahead with it,"
says Dow. (vice president Lundeen).
- ls~ri
i0Q ~
90 r '
i gp
70 ' Figure 3. Steady Expansion in the Seventies
60 - �
2 ~ Key:
50 1. 100 million dollars
2. sales
ao 3. operational profit
30
20 - 3
~o- '
1910 Ti M 78 4 7 1 77 71 7~
' Also, the Saudi pro~ect was recently pushed forward by a joint venture with
Mitsubishi. This finally set Che course to begin serious investment in Saudi
Arabia. Although the details have not yet been specified, it will certainly
;~.7 ,
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be clecided to reduce the scale of the derivative products that the two companies
Lake delivery of, in addition to 500,000 tons of e~hylene and 500,000 tons of EG
they must share. Furthermore, the policy of the Saudi Government seems to stick
to the principle of setting 30 percent of the total investment value as capital,
of funding b0 percent by means of a 3 percent interest rate loan from the Saudi
Government, and of procuring 10 percent through the market. In the $2 billion
Mobil project in Yanbu, Mobil and SABIC (Saudi Basic Industry Corporation) pro-
vides $300 million each, the government loaned $1.2 billion, and the market loan
was $200 millio:~. In the $3 billion Shell pro~ect, Shell's investment share was
allowed to be only $400 million. Dow and Mitsubishi appear to be investing dol-
lars based upon these shares in investment.
Based on this principle, 15 percent or less may be Dow's share, which matces it
quite a low investment. For the Dow company, which is unusually highly dependent
on loans among American firms, this pro~ect has considerable advantage considering
the present high interest rates. Informed circles agree that Dow is panting to
- obtain Saudi crude oi1, since it is forecast that securing crude oil for the
refinery in Texas will encounter some difficulty. They say the original purpose of
Dow's advance into Saudi Arabia was oil.
Likewise, the eighties' greatest theme of resource pursuit activities is the move
to obtain gas in the North Sea. Dow hae announced a petrochemical pro~ect in
, Firth, Cromarty, in northern Scotland. It plans to build a gas separation facility
and ethylene complex based upon a pipeline to be inatalled across land from a pipe-
line which has already been laid in St Fergas (slightly to the south) on the British
mainland. The pipeline will be installed by 1984-85, a 400,000-600,000-ton ethylene
installation will be completed by 1986, and the ethane gas surplus will be supplied
to Dow plants on the European Continent. However, ICI, BP Chemical and Shell
Chemical, which conetitute the ma~or English chemical concerns, are showing strong
oppos~tion.
Sheer Snatching Tactics in Low Market Growth
Meanwhile, Korea, Japan, Hong Kong, Brazil, Yugoslavia and Spain, which tend to
have growing markets, are almost virgin soil for pow. Maneuvers to take some part
of the market in these areas which have a high growth potential have been especially
noticeable since the latter half of the seventies. In the Yosu complex, in Korea,
a 240,000-ton soda plant, a 280,000-ton EDC plant and a 100,000-ton high pressure
polyethylene plant were built and began operation in 1980. This complex, however,
appears to be a big failure and ia suffering from a low rate af operation, directly
affected by the drastic slowdown in the Korean economy.
Meanwhile, Dow disclosed the intention to start a 360,000-ton soda (720,000 tons
in the ~econd stage) and electrolysis base petrochemical chlorine complex around
1975. It looked for locations for a while, but in the end, as announced by vice
president Lundeen at this time, it appeara that Dow settled on a policy of snatch-
ing a share of the Japanese market through product imports rather than building
plants. This can be interpreted as meaning that it does not make much sense to
get involved in production in Japan, where raw materials, energy (especially elec-
tricity) and cost are most expensive.
18
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Figure 4. Increasing MultinationaZ Flavor, Toward Downstream
(Unit: million dollars,
. ~ Z5 7i~ Tl 7~ ?9
1 It ~ a.W s.16s ~,~31 k~a t~xi5 .
T' r?1 il 56.7 54.4 55.5 52.9 49'.5
i~. 4~~'1c~Fl � 7~~) ~ 26.0 26.6 26. Y6.3 28.8
SAj ,~i t 6.6 6.5 6.4 6.4 6.8
~ ~ 6 ~ ~ . ~ 3.7 4: a ~4.4 S.9 . 6.8'
~7 3fi7tUi~ , 4.8~ 4.L 4.4 4.9 5.I
8~7 3'> . 3.9 ~9.5 3.1 3.6 3.0
9 1~~~~~ 'J~ 13.~ .747 3,048 3,333 .~.535 ~,788
' i~ � ~*~q~4 694 622 809 ' S43 578
r1 y'Jx#~'i~' 15 .r,~ �1.429 1.691 2,146 2, 479 3;458
ffi'~~ '~~1~6 301 392 3T3 ~ 414 693.
j ~ ~ ~flb'i '~f17.~ 712 . 713 ?55 ' 8T4 .I,O1Z-
- ) �~'1~~'1 '~~1 8 82 82 4~~ ' 94 63
~
Key:
1. katio by areas 8. Brazil 13. Sales
- 2. Total sales 9. Revenues by sector 14. Operational profit
3. America 10. Chemical products, 15. Sales
4. Europe, Africa metal products 16. Operational profit
S. Canada 11. Plastics, packing maf~erials 17. Sales
6. Pacific area 12. Biochemical products, 18. Operational profit
7. Latin America conaumer goods
Other than Korea, the relatively large plants built are a polystyrene plant of
70,000 tons a year in Hong Kot~g, and a plant of 15,000-ton scale in Thailand. As
soon as the flong Kong plant wae completed in 1978, the exports to Hong Kong by the
affiliated AsAhi Dow (50-50 investment by Dow and Aeahi Chemical Industry) showed
a draetic decline.
On the other hand, in Latin America, the Aratsu [phonetic] complex in Brazil was
completed with the investment of $200 million, and in con3unction with this, Dow
Brazil was aeparated from Dow Latin America to become an independent firm. Aratsu
produces PG, P0, soda and chlorine group products, and is Dow's largest plant in
Central and South America. ~
Worthy o� mention is the petrochemical businesa in Yugoslavia. This turned into
a West-East ,joint oparation which is the largest in Eastern Europe. A complex for
ethylene cracking and producCion of vinyl chloride, polyethylene and styrene on
~ Krk island will be completed in 1982-83. Already in 1978, a polystyrene plant in
Zagreb started operation. The investment on Krk island will come to a total of
$700 million. Recently, Dow opened a resident office in Peking, ana it is reported
that Dow has concluded a long-term blanket agreement with the Republic of China.
At any rate, Dow has steadily pursued resources and expanded markets with an
insatiable appetite, but various sources point out that Dow's traditional business
practice was about to encounter a eharp turn in the road. This was necessary due
to the worldwide slackening of the growth rate of universal chemical products, the
shrinking of areas available for market expansion, and the frequent labeling of
petrochemicals as downstream products of the oil industry.
. -19 .
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FOR OFFI('IAI, 115H: ONI.Y
I'u cumb.~t ttit~se trends, I)ow Ltself has decided to expand and replenish the bio-
~�h~�mic~l lield: it is rumored that it will expand tnto the gene engineering field
~~nd it wi:11 alsu purchase Richardson Merril, a large pharmaceutical company (it
might very well end up in a joint concern or it might be a simple license purchase).
tilso, various projects such as special resin, hollow fiber and coal liquefaction
are being brought to light one after another. A popular direction from commodity
- chemical to speciality has begun to be pursued even in a firm like Dow.
Still, it is questionab le whether or not Dow, which has conducted business on the
basis of mass production and mass sales, can successfully change its habits.
Rather, it is more likely that the company will reinforce its accustomed business
~ractice of expanding its shares in generally stagnant markets using traditional
products and approaches. In this sense, it seems correct to accept first vice
president Lundeen's usual press interview in Japan as an announcement that Dov~ is
serious about grabbing a share of the Japanese market.
COPYRIGHT: Shukan ToyoKeizai 1981
8940
CSO: 8129/1451
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;
;
SCIENCE AND TECHNOLOGY
_ FIRMS PLANNING TO WORK WITH BIOTECHNOLOGY SURVEYED
'rokyo NIKKEI SANGYO SHIMBUN in Japanese 13 Jul 81 pp 10-11
[Text] Biotechnology is being used for pharmaceuticals, chemicals, and food pro-
ducts. Even trading companies and machinery manufacturers are getting seriously
involved in biotechnology. According to a poll conducted by the Nihon Keizai
: Shimbunsha, 95 companies, 72 percent of the 132 companies responding, were found
to have specific business plans for biotechnology. It has been called the last
technological revolution of this century. Zndustry has begun to put real effort
into research and development for this indispensable and potent technology in
order to create future business vitality. There are many different target dates
for commercialization. Some companies expect to make use of the technology in 1
or 2 years; some have long-range targets of more than 10 years. This shows that
biotechnology has already passed the "fever" stage and has been incorporated into
business strategy.
Commercialization for 47 Percent of Companies in 2 to 5 Years; Sights First Set
on Pharmaceuticals
Biotechnology will first be applied commercially to pharmaceuticals, next it will
spread to chemicals and food products, and in the future it will move to the larger
tields of energy and agriculture. This is roughly the commercialization strategy
of the companies planning to work with biotechnology.
'Che 95 companies (86 manufacturers and 9 trading companies) which have business
plans for biotechnology are aiming at quite different fields. Almost half--44
percent--are planning to apply it to pharmaceuticals, 23 percent to chemicals and
food products, and 10 percent to energy. Also, many manufacturers gave specific
names of products, such as interferon (virus propagation prevention gene), anti-
biotic substances, and amino acids. From this we see that biotechnology is becom-
ing firmly entrenched in the field of pharmaceuticals. Specialized manufacturers
, such as Takeda Chemical Industries Ltd have always been involved, but companies
in different businesses such as Suntory, Toray Industries, Mitsui Petrochemical,
and Calpis Food Industry Company can be seen entering Che field. The new tech-
' nology is being used as a takeoff point for ventures into pharmaceutical and
chemical products.
Pharmaceuticals are the initial target because their high added value and growth
potential make this a perfect market for commercialization of the new technology.
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FOR OFFIC'IA1, ( ItiN: ONI.Y
In Ltie period of low growth, the pharmaceutical industry maintained a growth of
close to 10 percent and secured a high rate of profit. With this in view, compa-
nies seeking to diversify find that "there is no business more attractive"
(Suntory).
1'he target date for commercialization is 2 to 5 years from now for 47 percent of
the companies. However, there are many businesses, like Showa Denko's amino acid
manufacturing, which are already in operation. Also, there are many "reserve
forces" ready for commercialization. Takeshi Tsuchikata, president of Sumitomo
Chemical Industries, says: "We have roughly decided on pharmaceuticals, agri-
chemicals, and petrochemicals. Now we have to narrow our sights."
When it comes to energy and agriculture, commercialization wi71 occur later than
in other fields. For example, Idemitsu Kosan will "require a least 10 years" to
produce chemical products using gene recombination. Morinaga Confectionery "would
like to improve seeds by cell fusion, but it will take 5 to 6 years to accomplish
this." In agriculture, it is necessary to manipulate higher forms of Zife such as
plant.s. In the fiel.d of energy, the price ~ompetition between crude oil and
synthetic fuels is an important issue.
The practical application of biotechnology will lead ;:o the expansion of peripheral
markets such as machinery and plant construction. The large shipbuilders such as
Mitsui Shipbuilding and Engineering and Hitachi Shipbuilding and Engineering have
announced their intention to "undertake construction of chemical plants using bio-
technology." In addition, major companies that specialize in planning such as
Chiyoda Chemical Engineering and Construction and Sumitomo Chemical Engineering
are competing for orders for facilities to prevent biohazards in testing facili-
ties. Also, general tradir.g companies are watching the situation carefully.
Mitsui and Co Ltd is actively working to effect a tie-up between U.S. business
ventures and Japanese industries. Marubeni, Ito Chu, and Tomen also have ambi-
tions: "We want to get involved in pharmaceuticals and industry.
In technology, expectations center on the following processes in the order given:
gene recombination, fixed fermentation, semisynthesis using fermentation, cell
fusion, and large-scale cultivation of cells. Gene recombination Cechnology is
~onsidered to be a central part of biotechnology. Many companies "are in the
process of learning" about it (Takeda Chemical Industries Ltd, Fujisawa Pharma-
ceutical Co Ltd, A~o no Moto Co Inc, and Mei~i Confectionery Co Ltd) and are work-
ing hard to secure the necessary technology. Some concrete results can be expected
in 1 or 2 years.
It is generally felt, however, that cell fusion has more practical value than gene
recombination in the near future--for example, for use in diagnostic drugs. There
is also strong interest in applications for improvement of agricultural products,
not just pharmaceuticals and diagnostic medicines. The fixed fermentation process
Is being applied to the production of amino acids and fats and oils and to research
and development of synfuel alcohol. Companies which have gotten results with these
technologies such as Tanabe Seiyaku, Miyoshi Oil and Fat, and Kansai Paint are
rclying on biotechnology for manufacturing.
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FOR OFFICIAI. USE ONLY
a~
- .~"~S :
~'K. s 6 ' i:
~r.
. j+ 'f',4,`~~.
.
+ Y-'.
- Culture tank for production of interferon
(Central Rese arch Laboratory of the Green
Cross Corporation)
`l'-~~r~et ~'ie?ds cf Corlmercializat.ion for ~Siotechnolo:~;;r
- . , ~
_ - r-
~
' l,.
ra~:r:~-.ceuti.ca?.s ~ ~ ehemicaZp '``ener~;~;~ ~isce~.~.aneou~
' � i f ood pr ~ducts~.. . ~
, i
~
~
44 ~3 ~ ~ `~lo % 23
~
. . . , ~ ~ 1~`~ ~ ~ ~ .
Tar,~+:t Dwtes for Bi4technolo{~y Co-imarcialization
llOt set ((~.6) 1 yeax ('7.1)
,
~yl~e~d-:T in u~o (15~~ . - 2-3 years (1~..,)
i~ ~
%1 . ~
l�')-~ ycnr~U (7.4 ) targot date. ;
9rj co~npanie~
1 155 Projocts .
r �n (',",~.5) ~ � 4-5 ,ye~.r:+ (~?'7�"O
,-1 ) ; c;a~
~
~
Research: Trying To Catch Up With the United States and Europe in Quantity and
Quality; Positive Approach to Business Tie-ups
Of the 80 companies undertaking or planning to undertake business related to bio-
technology, 62 companies already have a related research department. Seventeen
companies do not have a special research organ but are beginning to conduct
research. Pharmaceutical manufacturers which specialize in organic chemicals and
even ordinary chemical manufacturers have already set up bioscience research
, centers. For example, Mitsubishi Chemical Industries established such a research
organ as a separate company 10 years ago, in 1971. The research capability of such
companies is rapidly taking shape.
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roR oE~Ficin~. ~~sH: c~Ni.v
I~uL luukiil~ at the overall situation, there are many companies which are not yet
~~yu.i_ppecl t~ handle this new technology. Also, 4G of the companies, more Chan half,
re5poncled that they have less than 10 researchers (including the "several" cate-
hory). 'I'hen there were 20 companies which had from 10 to 49 research personnel.
~)nly 9 companies had 50 or more. Biotechnology is said to require "a human wave
oL geniuses." Considering that a U.S. genetic engineering venture, Genentech, has
60 researchers with doctor's degrees, it cannot be denied that we are behind the
United States and Europe in both quantity and quality.
~t ~~fR~rtDJl~ 1 flf
~~~t~~ - -
~ c~ a~~ t~t ! c~~ ~t 5 6
, ~o ~
i5 ~ u 4:
_ 10 ~ 5 10 ~ 7
5 5 4tt a 4~
~ ~ . 2 ~ 231
0
,.ta "~o so iao ~ i ~ io
> t ~ ~ 8.~ 9 i ~l0~ot11~
6~~~ 4i ~ k !9 19~ ~1
~f7 8 ~ 9 '10 ~ ~ s _ x t
Key: Key:
1. 44 companies 1. Research and Development Investment (note:
2. 20 companies 36 companies did not respond)
3. Number of Researchers (note: 2. companies
13 companies did not respond) 3. 2 companies
4. 5 companies 4. 19 companies
5. 4 companies 5. 36 companies
6. (including "several persons") 6. 25 companies
7. 10 or less 7. 4 companies
8. 10-49 8. less than 10 million yen
9. 50-99 9. 10 million yen to 100 million yen
1(l. 100 or more 10. 100 million yen to 1 billion y~n
11. more than 1 billion yen
'I~t~~~ mci.in problem is ~etting the pereonnel (reaearchers) . Of 86 companies, 32 are
~~~u~;uplinracticetinhtheeJa~aneseeemnlo mentisistem~~pThisnshowsahowrmuclhli hS ualit
t P P Y Y' Y
re:;c~archc~rs ~re needed for biotechnology and how desperate many companies are for
~~cr5onnel .
lic~c~au~;e of this situation, all of the companies are diligently working to train
E~~ople quickly. Looking at the methods of personnel training (composite answers),
53 companies said,that they rely on in-house training. However, even more compa-
tiies (59) send their people to educational institutions within Japan, while 32
companies send their people to overseas educational institutions. Aji no Moto
~~rides itself on being the world leader in fermentation technology. However,
according to the president, Katsuhiro Utada: "We are continually sending our per-
:;onnel as students to educational institutions such as Stanford and MIT in the
tini.tecl States and Tokyo University and Kyoto University in Japan and we are careful
~~ot to have the relationships cut off."
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With respect to research and development investment, four companies are spending
more than 1 billion yen annually: Mitsubishi Chemical Industries (2 to 3 billion
yen), Sumitomo Chemical Industries (several billion yen), A~i no Moto (approxi-
mately 2 billion yen)~, and Ringen (approximately 1 billion yen). The largest
group, 25 companies, spend between 100 million yen and 1 billion yen. Compared to
the generosity of Dupont, which gave 6 million dollars to Harvard Un3versity for
biotechnology research, Japanese companies still have a long way to go. Hourever,
- we can see that in reaearch investment as well as in personnel education, they are
quickly building up their capability.
There are also many companies eager to make tie-upa with other companies for research
and development and pereonnel training. The poll showed that 40 companies have
already made tie-ups or are in the proceas of doing so. Several tie-ups have been
made with U.S. business ventures such as Mitsui Toatsu Chemicals and the Green Cross
Corporation with Gennex. Most observers believe that there will be an increasing
number of companies who use tie-ups with other companies to secure new technology
more quickly at the stage where their own accumulated technology has reached a high
level and their development goals are clear.
One aspect of biotechnology is its use in diversification, for example the develop-
ment of inedical products or fertili2er additives by a petrochemical manufacturer.
Many of the people involved declare: "In commercializing, one cannot avoid tie-ups."
Method of Poll
A questionnaire wae sent to 200 important companies involved in the field of bio-
technology such as chemical and food companies. Replies were received from 132
companies by the end of June, and the results were analyzed. Together with ques-
tions on the companies' business plans and research organizaCions, the opinions of
reaearch and development aupervisors were surveyed.
Of the companiea which responded, 85 companies submitted the main points of their
answers in the form of a chart. The following companiee did not submit because of
format limitatione or the deaire noC to reveal heretofore unpublished information:
Nippon Oila and Fats, Fu.~.isawa Pharmaceutical, Wakamoto Pharxnaceutical, Kaken
Chemical, Santen Pharmaceutical, Amano Pharmaceutical, Ishihara Sangyo, Nippon
Noyaku, Tokuyama 5oda, Mitsubiahi Gas Chemical, 5hinetsu Chemical Industry, Nippon
Synthetic Chemical Industry, Nippon Synthetic Rubber, Nippon Sanso, Hoya Glass,
Sakai Chemical Industry, Chiba Buta~ien Industry, Nitta Gelatine, Jomo Nenshi,
Honshu Paper, Kanzaki Paper Manufacturing, Japan Tobacco and Salt Public Corpora-
tion, Mitsui Norin, NitCo Seifun, Toyo Sugar Refining, Kyodo Shiryo, Fu~i Seiyu,
Yoshihara Oil Mill, Prima Meat Packers, Ito Ham Provisions, Hayashikane Sangyo,
S B Food ProducCa, Okura Shuzo, Chlorella Industries, Kawasaki Heavy,Industries,
Tsukiahima Kikai, Nikkiso, Mitsubishi Electric, Mitsubishi Corp, Mitsui and Co,
C. Itoh, Marubeni, Sumitomo Shoji, Niasho-Iwai, Tomen, Kanematsu-Gosho, and Nichimen.
We surveyed the opin~.ons of executives in charge of biotechnology and department
- managers of 132 companies which have a strong relationship with biotechnology.
They believe that this ie a promiaing technology with great importance for the next
generation. They have confidence in the posaibilitiea of commercialization and are
dealing with it rationally. We compiled the repliea as follows: 94 percent believe
25.
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FOR OFFI('IA1, l~tiE ONI.Y
, tl~;� I~i~,~~~rl~noloby ~atll contribute to the happiness of mankind. Four out of f.ive
l~~l[tve that the level of Japanese technology will be up with the United States
witt~in 5 years. However, more than half believe that "administrative restrictions"
and "citizen's movements" will create obstacles to the commercialization of bio-
technology and many said that the recent boom in biotechnology is building up
excessive expectations.
~1~~f~'?~'/o'r-C~A~~'~0~##tt:.$t~1.~3b+ ~
c~a~stiu25~~) Key :
I l. Do you think that biotechnology will
contribute to the happiness of mankind?
2~ $ 3 1181~ (126 total respondents)
, ~ 2. Yes
~ ~
3. No
3~:~~~t~` ~ 3~ 4. Other answer
~ 5. What is the Japanese capability in gene
4 ~o~~ ~5w recombination? (128 total respondents)
' S~~~~iM~.~~`T~*~~~ . 6� Will be equal to the United States in
t~~Ht~tze~~> 5 years
7. Will catch up with the United States in
;~~E:his 62~ 2 or 3 years
*r~a~.
8. Gap,between Japan and the United States
~~2~3'~T~ 311~ and Europe likely to continue
p~ic~~ c
~ 9. Already equal to the United States and
~ ~c~t~~~~^ ~ Europe
13~~'~~ ~ 10. Other answer
9trr~c~~~,5~'. . _ . '
i !t . , ~ ~ ~ . I
~ ~
~ II I I ~ a~ 1l a~i'f'~"
VI
tive H iene Laborator High-
Preven Y
National
Yg
Safety Test Facility Made for International
Communicable Disease Program
.
1. When do you think that biotechnology will
~ become a 1-trillion-yen industry? A 3-
trillion-yen indusCry?
2. 1 trillion yen market
?t~(~}+~7/ ''~~~~1~( 3. 3 trillion yen market
1 ~~ts ~ ,
~t ~~~~th~ 4. lare 1980's
~~~4
~ 5 . early 1990 `s
6. late 1990!s
7. 21st century
gp. 8, other answer
~
~ . ~.~x
* ~ ~
_ e~~t~e~t..^~arir~li � 26
. ~ ~Ei~C1~FO~il~t'1!~'~ ( P 4 ~
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~
What do you think will restrict the application of bio-
f B~r'~'~~r~~�~s-4t~t technolo to industr in Ja an? (125 res ondents)
~.ri-iGAi'~'~'~~e,'~l:~~IM~4t~t.: ~ gY Y P P
~ atafif~'rLx3~.'
` t11ALll;h) ~
. ~w-;,.+ (1) social restrictions related to safety and life
~ ; ' ethics 81
_ (2) administrative restrictions such as testing
.l0.~ i guidelines for gene recombination 75
~ 4~ Y .
(3) economic restrictions such as the burden of
" m'~4u~~'~~~~--~�~-~31J1 research and development costs 52
~'m,~~ }5� (4) personnel restrictions such as a lack of
~ ~ -
~,'~,1HE~M! ~ . . . . .
researchers 42
~!I!~!~l~~"'".r",~~.' .
,
~#x~~`~+~~ , ~ (5) technological restrictions such as intrinsic
'm~~~'~'~~~~A~ ~ limitations in biotechnolo itself 23
~ ~~a~~ar , gy
} ~
� (6) other answer 6
Market: Ma~ority Believe It Will G~ow to 1 Trillion Yen in 10 Years; Gene Recombi-
nation Technology to Catch Up with the United States in 5 years; Opinion Poll of
Related Executives and Department Managers
Firat, opinions emphasizing the importance of the world to be opened by biotechnology
were evident. "To put it strongly, we are approaching one of the greatest turning
points since the beginning of mankind" (development department manager of a trading
company). "It is an effective means for solving the food shortage of the 21st
century" (development department deputy manager of a major sugar refiner). "After
electronics, it is the second most revolutionary technology since the war. I
~ believe it is a meaas of solving the world's fuel and food shortages" (director and
production technology group general manager of a ma~or fermentation company).
What size worldwide.market will be formed by biotechnology and at what time? In
the survey, we asked when the market would reach 1 trillion yen and 3 trillion yen.
_ A majority ~52 percant) responded that a 1-trillion-yen market would be created by
the early 1990's. In other worde, the respondents believe a 1-trillion-yen market
is poesible in about 10 years. The largest number of respondents, 42 percent,
thought that the tnarket would expand to 3 trillion yen by the late 1990's. However,
30 percent thought that it would take until after the beginning of the 21st century.
So there was quite a divergence of opinion on the pace of market expansion.
Some observera in the United Statea say that there will be a 6-trillion-yen market
in the 1990's. Compared to this, the eatimates of Japanese companies are very con-
servative. In the United States, this technology is expected to expand to agricul-
tural fields, euch a3 seeds~ and to energy. In Japan, developments are expected to
concentrate on pharmaceuticals and chemicals. Perhapa this difference in approach
is reflected in the estimates of market size.
Next, we asked what percentage of chemical procesaes using high temperature, high
pressure, and large aquipment will change to ~nergy-saving processes at ordinary
temperatures and pressurea. The overwhelming response was less than 10 percent in
the next 10 years. Fifty-three percent of the respondents said 10 to 30 percent in
20 years. Narrowing it down to only thoae respondents involved in chemical indus-
tries, we found that 64 percent replied 10 to 30 percent in 20 years. This means
27
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th~~t in the firat part of the 21st century chemical industries are expected to
et~ow a great change becauee of biotechnology. We can see a readineas for t}ie
change.
However; opinions like the following were also hearfl. "The reaction of living
organisms is slow and catalysts for fermentation are unreliable. It will be dif-
ficult to use them in the manufacture of petroleum products in the near future"
- (technological research department manager of a chemical manufacturer). "Bio-
technology will soon have a central role in a technological revolution in medicine.
But its application to chemical industries will be limited for some time" (director
and research and development manager of a ma~or chemical company).
What is the capability of Japanese technology in the field of biotechnology? We
asked the individuals involved how they would rate this level f~r one of the newest
technologies, gene recombination. Only 4 percent replied that "Japan has already
caught up with the United Statea," 24 per,cent said that we would be "equal with the
United States in 2 or 3 years," aad 48 percent or almost half of the respondents
believed that we would "catch up in 5 years."
As was the caee with semiconductore, we have been told by many observers in the
United Statea and Europe that Japan will soon catch up in gene engineering. Most
, of the relevant pezsonnel of these Japanese companias also believe that "this will
happen in 5 years." This shows that Japan is rapidly gaining confidence in this
field. Already some people are saying: "Biotechnology fits Japanese culture. It
is possible that Japan will soon be the world leader in this field" (pharmaceutical
planning department member of a ma~or liquor company).
On s:he other hand, 13 percent of the respondents said that "the,gap between Japan
and the United States will continue for some time." Also, there are many requests
for improved capability. "Unfortunately, the talented people in this field are
going overseas. We need poeitive action by the government and financial sector
such as economic assietance, improvement of faciliCies, and relaxation of regula-
tions" (developmant~office director of a seed manufacturer). "If we are to expand
the fields of application for fermentat~.on technology, which is very advantageous
for Janan, more effort muat be put into basic and peripheral technology" (director
and research and development divieion manager of a chemical product manufacturer).
Although companies which are not involved in biotechnology say that it has "great
merit," it is clear that they are hesitatiag. Thie technology is based on basic
research in a broad range of ecientific fielde including biology, agriculture,
medicine, biochemiatry, chemistry, and biophy$ics, so haste is not in ord~r.
Another problem ie the rather large research and development cost required. The
products must be narrowed dowa to those with high added value. All companies,
including those not yet actively involved, have very high expectations of biotech-
nology.
An Issue: Wariness of Emotional Reaction; Viewpoint of "Life Ethics" Cannot Be
Ignored
Many respondents said that "social reatrictions related to safety and life ethics"
and "administrative restrictions such as testing guidelines for gene recombination"
are important problems in promoting business in this field. Three out of five
28
,
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~ iE ONLY
respondents consider that these two things are obstacles. On the other hand, those �
who picked "economic restrictions such as the burden of research and development
investment" and "the difficulty of securing human resources such as researchers"
did not constitute a majority. In ahort, the results showed that even though the
companies are hi.ghly motivated, they are afraid that citizens' movements and overly
stringent government regulations will shackle positive progress.
- On the other hand, there were many who consider that safety measures should have
priority. "Measures should be tak~n by the government to prevent those who have
not received training from lightly indulging in ~experiments" (research and develop-
ment planning department deputy manager of a ma.~or textile manufacturer). "This
field involves certain dangere, 3ust as does nuclear energy, and sufficient con-
sideration ahould be given to respect for human life" ~technology promotion depart-
ment aupervieor of �at and oil company). In addition, admon~itions against racing
- ahead recklesely stood out. "For eaample, cloning technology ie a field where the
ethical view of ecientiets becomes very important" (director of applied development
laboratory of beer company). "Even in Japan, Che people are likely to be critical
of thia type of research. We ahould remember that the commercialization of this
technology is posaible only if it is socially accepted" (deputy director of
research labor$tory of food products manufacturer).
Companies which cannot decide whether to enter this field or not gave the following
sorts of~opinions. "Pharmaceuticals and increased food production are fields where
microorganisms and plants can be used. However, it is not permissible, for ethical
reasons, to fool around with animal genes. The very study of cloning of animals or
human beings should be forbidden" (central ]:aboratory director of chemical manu-
facturer).
"Even if new products are useful for particular human purposes, might they not
~ destroy the balance of the natural world?" (deputy director of research and develop-
ment office of oil refining company). It is interesting that there were many
respondente in industry who coneider that becauae biotechnology is a very promising
and revolutionary technolagy~ commercialization should be carried out circumspectly.
There were only 3 respondents out of 126 who anawered "no" to the question "Will
biotechnology contribute to t~te happiness of mankind?", while 118 respondents
answered "yes".
However, of those wha answered "yes", there were only a few wt~o were as uncondi-
tionally positive as in this opinion: "Biotechnology has technological limits.
There fs no danger of repetitive self-propagation of monsters" (director of central
research laboratory survey and planning office of a food products manufacturer).
Moat respondenta wanted to apply conditions even though they believed that biotech-
nology could contribute to the happiness of mankind. "Whether it can be useful or
not is a problem for human beings." "A necessary condition is the establishment of
a social ethic under which only research whtch aims at increased human happiness is
allowed" (life ecience researcH laboratory director of ma3or fat and oil company).
'ro summartze, biotechnology is atill a young area of science~ and technology. It
should be evaluated rationally and cultivated with understanding. For this pur-
pose, proper guidance and measures for cultivation by the government are indispensa-
ble. Also, it will not do for the gener.al populace to have excessive expectations
derived from science fiction or to protest on the basis of emotion alone. The prob--
lem is what specific actions will be taken by industry Co create the proper environ-
ment for progress. 29,
F4R OF~ZC'[AL U3L QAILY
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APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R044400050006-6
FOR OFFICIAL USE ONLY
Business Plans Related to P,iotechnology Research Capability
Business Field Technalogy Used ime Needed Name of No. of
Company Name Research research-
or Commer-
ialization Organ ers
Pharmaceuticals
Takeda pharmaceuticals cell fusion, gene 5-8 years Biotechnology 30
Pnarmaceutical recombination and Laboratory,
Industries other arrangement Fermentation
Products Lab
~ .
an yo o p armaceut ca s ce us on, gene years ermentat on sever~3
recombination Laboratory
onag o p armaceux ca s gene recom nat on - years several
plant and animal fixed ~nzyme
medicines, clin~ fermentation,
ical diagnoatic cell fusion
medicines
ana e e ya u a no ac s, xe m croorgan sm a rea y pp ie io-
organic acids method applied science Lab,
= Microorganism
Eisai Co physiological gene recombination 10 years Bioscience . several
active substances cell cultivation Group
Yamanouchi pharmaceuticals aemisynthesis 5 yeare Cell Physiology
Pharmaceutical uaing fermentation Laboratory
cell fusion
Banyu antibiotics gene recombination R&D Group several
Pharmaceutical cell fusion Office
Yoshitomi pharmaceuCicals gene 'recombination 5-6 years Central several
Phar~aaceutical Laborator
Mochida interferon cell cultivation unknown several
Pharmaceutical diagnostic test cell fusion 2-3 years
chemical
Otsuka interferon cell fusion 5 years Cell Technology approx
Pharmaceutical Research De t 30
Tokyo Tanabe Co pharmaceuticals fixed fermentation 3-4 years Natural Sub- several
stance Lab
Riken Vitamin food producta fermentation~ . 1-2 years
Chemicals �
Mitsubishi pharmaceuticals geae recombination 5-10 yrs Bioscience Lab,
Cheinical chemicals semisynthesis using " Biochemistry several
Industry fermentation Lab, Technology tens
Laboratory
food products fixed fermentation alre~dy
. applied
diagnostic test cell fusion in 1981
chemicals
30
FOR OFFICIAL USE ONLY
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APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400050006-6
~v `-~-+"~~~"`r'~- Fermentation and Biology-Related
- Training and Employment R&D Expenses Business Already Undeztaay
Plans (1981 Plan)
in-house training, overseas pharmaceuticals, amino acids,
education, new graduate nucleic acids
employment, midcareer
employment
in-house training, new p armaceut ca s, yeast ermentat on
graduate employment
in-house training, outside approx ~ p armaceut ca s
education in Japan and over- million yen
seas, new graduste employment,
midcareer employment
in-house training amino acids, organic acids
in-house training, outside small pharmaceuticals, animal medicines,
education in Japan amount food product ingredients ,
in-house training, overseas ant ot cs
educat3.on, midcareer
employment
in-house training, outs e p armaceut ca s
~ education in Japat~
outside training in Japan an p armaceut ca s
overseas, n~w graduate and
midcareer employmeat
enzymea, hormones
new gra uate an m career approx
em lo ent million yen
in-house training, oute e enzyme ~aanu actur ng agents or
education in Japan, medical uae
in-house training, outside 2-3 billion steroids, diagnostic test chemicals,
education in Japan and yen isomerized sugar, soybean milk
oveXSeas, new graduate
employment, rnidcareer
employment
31
FOR OFFICIAL USE ONLY
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APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400050006-6
FOR OFFIC[AL USE ONLY
(taUle continued)
Sumitomo pharmaceuticals gene recombination 7 years Bioscience Lab
Chemical interferon cell cultivation 5 years Pharmaceutical
- chemical bioreactor 10 years Div Research
- roducts De t
Showa Denko amino acids gene recombination 2-3 years Bioscience Lab
Mitsubishi pharmaceuticals, gene recombination, 4-10 years Central Research
Petrochemical agrichemicals, cell fusion, cell Lab, Mitsubishi
diagnostic test cultivation, Petrochemical
chemical fermentation Pharmaceutical
roducta Laborator
Mitsui Petro- physiologically fermentation, cell 2-3 years Comprehensive
chemical Indus- active sub- fusion, tissue Research
tries stances cultivation Laborator
Kanegafuchi intermediate semisynthesis already Bioscience
- Chemical pharmaceuticals, usi~ng fermentation, applied Laboratory
Industr harmaceutieals ene recombination 2-3 ears
SeiteCsu Kagaku pRarmaceuticals synthesis using 3-4 years Research Dept
and inter- fermentation Bioscience Group
ediates
Toyor Soda sweeteners fermentation 2-3 years Planning Lab
ph~rmaceuticals gene combinatinn 5-10 years
enzyme analysis 2-3 years
e ui ment
Nippon Soda pharmaceutical~ gene recombination 5-6 years Bioscience Lab
nd fermentation
chemicals " " 8-10 ears
Asahi Denka food producta fixed fermentation 3-4 years Food Products
chemical emisynthesis 5-6 years and Oils and
producta sing fermentation Fats Development
Laborator
Chisso pharmaceutical fermentation 5-6 years Development
companents Office, Yokohama
Branch
Nihon Shokubai chemical gene recombination 10 years Cencral
Ka aku Ko o roducta Research Lab
Sekisui Kaseihin se of uriused semisyntheais 5-7 years
Ko o resources sin fermentation .
Asahi Glass field being &D Dept ~
elected
Nippon Paint harmaceuticala ell cultivation 5 years echnology
chemical ene recombination Center
ubstancea nd cell culture
Kansai Paint chemical fixed fermantation 4-5 years echnology
roducte acterial method rou
Dainippon Ink ood producta ell fusion 5-6 years ioscience
and Chemicals hemical ivision
roducts
32
FOR OFFICIAL USE ONLY
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APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400050006-6
sevezal in-house training, outside several
tens training in Japan and overseas, billion yen
employment of new graduates and
midcareer em lo ent
several in-house training, outaide amino acids, etc
, education in Japan, employment
u on raduation and in midcareer
i:n-house training, outside heat resistant enzymes
_ education in Japan and overseas,
employment upon graduation and
in midcareer
approx IO " " approx 200
million yen
approx 100 outside education in Japan and bread mold, glutathione
overseas, employment upon
raduation and in midcareer
several outaide education in Japan, 20 million
employment of new graduates yen ,
approx 30 in-house Craining, outeide 300-400
� education in Japan, employment million yen
upon graduation and in midcareer
_ several outsid~ education in Japan and urokinaze (pharma-
overseas, new graduate employment ceutical)
. several in-hause training, new graduate 50 million
employment yen
approx 10 in-house training, employment 50 million
upon graduation or in midcareer yen
several outside education in Japan,
em lo ent in midcareer
several drainage water tr~at-
ment rocess
several new graduate employment 10 million
yen
several
~ several in-house training, outside approx 100 micrabial. protein
education in Japan, new million yen
graduate employment
33
FOR OFFICIAL U~E ONLY
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APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-00850R440400050006-6
FOR OFFICIAL USE ONLY
Kyowa Hakko pharmaceuCicals gene recombination 5-6 years Tokyo Lab,
Kogyo amino acids gene recombination Technology
special anti- cell fusion and Laboratory
bodies, enzymes large-scale culti-
vation
alcohol fixed bacterial �
method
Nippon Kayaku pharmaceuticals gene recombination -6 years Pharmaceutical
and cell fusion Div Pharma-
chemical gene recombination 10 years ceutical Lab,
- products and fixed fermen- Agrichemical
tation Div Jomo Lab,
Technological
Development Dept
Takasaki Lab
Kumiai cell wall dis- Bioscience Lab
Chemical solvin enz
Hokko Chemi- antibiotice gene recombination -10 years
Induetr
Kao.Soap food products gene recombinaCion -6 years~ Bioscience Lab
- chemicals fixed fermentation "
Lion Fat and biomass develop fixed fermentaicion 0 years Bioscience Lab
Oil ment
plant breeding gene recombination -4 years
oil and fat cell fusion, etc -4 years
manufacturing
enzymes for gene recom'uination -5 years
medical use
Miyo~hi Oil lipid synthesis fixed fermentation -4 years Manufacturing
and Fat Grou
Sanyo Chemical chemical fixed fermentation -6 years Planning and
Industry producte Development
Group, Planning
De t
Shin Nippon chemical fermentation, fer- -7 years
Rika producte mentation using
enz es
Sun Star interferon ce11 cultivation -7 years Bioacience Lab
Dentrifrice antibiotica cell fusion -10 ears
Textiles~ Palper and Pulp
- Asahi Chemical urokinaze tisaue cultivaCion -6 years Technology Lab,
Industry Research Section
of Food and
' Pharmaceuti.cal
Plants
Toray interferon gene recombination few Basic Research
ears Laboratory
various am~.no technology apply-
acids in enz es
34
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400050006-6

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400050006-6
approx 40 in-house training, outside 700-800 pharmaceuticals, alco-
education in Japan and overseas, ~illion yen hol and fuel, amino
employment upon graduation and acids, enzymes, etc
in midcareer
several outside education in Japan, 30 million pharmaceuticals,
_ employment of new graduates Yen amino acids
aeveral agrichemicals
~ agrichemicals ~
40 in-house training, outside 500 million production of surface-
education in Japan and overseas, yen active agents
~ t �of .new.. re~uates
approx 1~0 iix-house training, outside 900 million soap containing enzymes
education in Japan and overseas, yen
employnsent of new graduates and
eople in midcazeer
several in-houee training, employment 20 million fat and oil analysis
of b~w raduatea en
_ several i~t-houss training, outmide
ducatioa in Japan~ employmant
f new graduatee and people in
idcareer
approx 15 verae8s education, employment 250 million
f new raduates en
utside education 3n Japan and sodium glutamate,
verseas, employment of new harmaceutical
radua~es � ingredients
- n-house training, overseas harmaceuticals, amino
ducation, employmAnt of new cids
raduates and people in midcareer
35
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400050006-6

APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-00850R440400050006-6
FOR OFFI('fAl, USf: ONLY
Teijin pharmaceuticals gene recombinaCion, 5-6 years Biomedical Lab
chemicals fermentation and 8-10 years Central
tissue cultivation Laboratory
, Basic Research
De t
Kanegafuchi pharmaceuticals cell fusion and 5-6 years Pharmaceutical
Spinning cell cultivation Research
pharmaceuticals fixed enzyme 7-8 years Laboratory
fermentation
Unitika pharmaceuticals fixed enzyme 4-5 years Central
fermentation Research Lab,
chemicals No 3 Lab
Kuraray pharmaceuticals gene recombination 5-6 years Central
cheraical fermentation 3-4 years Research
producte Laboratory,
agricultural an gene recombination 10 years No 3 Lab �
live~tock
roducta
Mitsubishi al'cohol fixed enzyme 1-3 years Central
Rayon ~ fermentation Research
Laboratory,
No 8 Research
Grou
Nitto Boseki pharmaceuticals fixed enzume 10 years Development
fermentation Laboratory
limi.ted en$ es
Koh~in phar~aceuticals gene recombination 5-6 years Saeki Plant
che~airals semisynthesis 2-3 years Research Dept
uein fermentation
0~1 Paper timber breeding protoplasr eepara- 5-6 years Timber Breeding
tion and cultiva- Laboratory
tion technology~
cell fueion
Sanyo Kokusaku tieeue cultivation, 4-5 years Iwakuni
Pulp fixed enzyma Research Lab,
- fermentation Etsu Branch,
Fercdentation
Grou
Jujo Paper pharmaceuticals semisynthesis Central
food products . Research Lab,
Chemical
Products Grou
Food Produc~e
Kirin Brewery new yeast breed cell fusion, gene 10 years Comprehensive
ing technology recombination Research
new bariey b~e~ed gene recombination 10 years Laboratory
in technolo cell cultivation
Suntory phyeiologically gene recombination 10 years Biomedical
active peptides Laboratory,
food~producte fixed enzyme Central
fermentation Research Lab
36
FOR OFF[CIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400050006-6

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400050006-6
in-house training, outside
education in Japan, employment
of new graduates
approx 10 " " 40 million pharmaceuticals
yen
approx 20 in-house training, outside 300-400
education in Japan and overseas, million yen
e~loyment of new graduates and
eo 1~ in midcareer
several outs~de education in Japan and 100-200 drainage water treat-
over~eas, employment of new million yen ment with micro-
graduates and people in . organisms
midcareer
4 3n-houae training 30 million
' yen
several fn-house training, outside 50 million amino acid synthesis,
education in 3apan, employment yen enzyme fixing
of new raduates
approx 20 outs3d~e.educatinn in Japan, approx. 100 yeast, enzymes
employment of new graduates million yen
10 outside education in Japan, SO million forestry
employment of new graduates yen
and people in midca~eer
several in-houee tralning, outside 50 million protein yeast,
education in Japan, employment yen ribonucleic acid
af new graduatee
several in-house training, yeast, nucleic acids
employment of new graduates
~ several in-house training, outside several tens beer brewing, plant
~ducation in Japan, employment of millions and microorganism
of new graduates and people of yen enzyme production,
in midcareer malt roduction
approx SO in-house training, outside liquors, food pro-
edueation in Japan and overseas, ducts, pharmaceuticals
employment of new graduates and
eo le in midcareer
37
FQR OFFICIAL US~ UNLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400050006-6

APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-00850R440400050006-6
FOR OFFICIAI. USE ONLY
Sapporo food products cell fusion 8-12 years Central Lab,
Breweries (yeast, etc) Applied Develop-
' seeds tissue cultivation 10-15 yrs ment Lab, Raw
pharmaceuticals gene recombination 10-15 yrs Material Testing
Lab
Asahi food products gene recombination 3 years Central
Brewpries pharmaceuticals enzyme fermentatio 3 years Research Lab
agricultural an cell fusion
livestock
roducts
Toyo Jozo Bioscience Lab
~ Sanraku Ocean alcohol fixed yeast 5-6 years Central

~ fermentation Research Lab
amino acids gene recombination 5-6 years
antibio~ics cell fusion 5-10 ear
Godo Shusei ethyl alcohol fixed enzyme 3-4 years Central
fermentation Research Lab
biomass product~on of high S-6 years
coave~sion erformance bac~ri
Aji no Moto amino~~acids gene recombination 3-5 years Central
fixed enzyme 2-3 years Research Lab,
fermentation Bioscience Lab
Kikkoman phyaio7.ogically semisynChesis 3-5 years Central
activa - ~using fermentation Research Lab,
substances Noda Industrial
Science Lab
Foundation
Chukin vinegar mfg gene recombination, 5-6 yeara Chukin
Vine ar tixed fermentation Bioscience Lab
- Snow Brand dait'y products tixed anzyma already Technology
Milk Producte fermentation applied Reeearch Lab
food producte ue~ of new enzymes 1-2 yeara Bioscience Sec.
microorganiema
phax~saaceuticals aemisyntheais 3-4 yeara
using zymotic
microar aniams
Mei~i Milk food products~ gene recombination 10 years Bioscience Lab
Products harmaceutic~l.s
Yakult pharmaceuticals gene recombination 5-10 year Central
food products " " Resear.ch Lab
Calpis Food antibiotica semisynthesis 5-10 year Tokyo Research
Industry using fermentation Laboratory,
antineoplastics cell ufsion Basic Research
Sec. ~
= 38
FOR OFFICIAL USE ~ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400050006-6

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400054006-6
- approx 50 in-house training, outside 20 million alcoholic beverages
education in Japan, employment yan
of new graduates and people
in midcareer
20 in-house training, outside eer, malt, yeast
education in Japan and overseas,
employment of new graduates
approx 30 in-house training, outeide alcoholic beverages,
education in Japan and ovezseae, harmaceuticals,
em lo nt of new raduates food roducts
60 in-houee training, outside 400 million
training in Japan and overseas yen
approx 20 in-houae training, outside approx 100 drinking alcohol,
education in Japan, employment million yen enzymes, alcoholic
of new gratduates and people beverages
in midcareer
approx 150 in-houae training, outside approx 2 amino acids, nucleic
education in Japan and overseas, billion yen acids, yeast,
em lo nt of new raduates harmaceuticals
approx 40 in-house trainirig, outside approx 800 soy sauce, alcoholic
education ia Japan and overseas, million yen beverages, food
e~ployment of new graduates and products, alcohol
people i.n midcareer
several in-houae training, outaide 50 million vinegar manufacture
educatiion in Ja an and overaeae en
approx 50 in-houee trainittg. ou~teide 500-700 cheeae, lactobacilli,
sducation in Japetn and overeeae, million yen fermented milk drink,
etaployiaent of new graduatee pharmaceuticals
several in-house training, outside undetermined fermented food products
education in Ja an
approx 20 ouCside education in Japan, fermented milk drink,
employment of new graduates and fermentation agents,
paople in midcareer lactobacillus agents
in-house training, outside fermented food and
education in Japan beverages, plant and
- animal food products
n 39
FOR OFFICIAL USE ONI.Y
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400050006-6

APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400054006-6
FOR OFFICIAL USF.. ONI.Y
- Meiji Seika antibiotics gene recombination 1-2 years Central
enzymes cell fusion " Research Lab,
physiologically fixed bacteria " Pharmaceutical
active peptides method, enzyme Development
fermentation Research Lab,
Fermentation
Technology Lab
Pharmaceutical
Develo ment Sec.
Morinaga pharmaceuticals gene recombination 5-6 years Bioscience Lab
Confectionery food products "
chemic~tle "
s~eds cell fueion "
Meito Sangyo synthesized fermentation already Fermentation
producta (yeast) applied Development
Dept, Synthesis
Develo ment De t
Mitsui Sugar food products fixed enzyme within 3 R&D Dept
mxde by combi- fermentat3on years
nation and
- conversion of
di.saccharides
Taito food products semisynthesis several
usin fermentation ears
Hokkaido food products Fermentation
Sugar (beet sugar, Plant Research
maltose Section
Nippon Shoku- sugars (pharma- fixed enzyme Research Lab
hin Kako ceuticals, food fermentation
products)
dextrine "
Ringen interferon ce11 fueion 2 yeara Ringen K.K.
dextriae fixed~enzyme already Technology Dept
chsmicale fermentation applied Ringen
active sub- microorgani~ms " Bioscience Lab
stances inside
- or anie
Oriental breading of cell fuaion, etc 2-3 year~ Research Lab,
Yeast y~ast molecules, Enzyme Develop-
Industry biochemistry fixed enzyme already ment Center,
tee~ chemicals, fermentation applied Biology Lab
automatic analy- " 1 year
sis e~ui ment
Takii Seeda improved vege- cell fusion already Basic Research
tablee flawers a lied Laborator
Other Manufacturing Industries
Idemitsu biomasa energy cell fusion, etc 5-10 year Central
Kosan chemical gene recombination more than Research Lab,
products 10 years new dept
40
FOR OFFICIAL USE ONLY ~
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400050006-6

APPR~VED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400050006-6
in-house training~ outeide pharmaceuticals,
education in Japan and overseas, foodstuffs, agri-
employment of new graduates chemicals, veterinary
medicines, enzymes
approx 30 outside education in Japan, approx 200 alcohol
employment of new graduates million yen
people in midcareer
approx 30 in houee training, outside approx 200 enzy.mes such as rennet,
t~Ainiag in Japan, employment million yen dextran
of new graduates
several in-house training eucrose manufacturing
several ~ outside education in Japan small amount natural pigments
6 in-house training, outside 40 million melibiaze, maltose
educat~.an in Japan, yen production enzymes
~ nt of new raduates
_ im~+hduee training, outside sugar syrup, dextrose
edulcat~,on in Japan, for use in pharma-
e~ployt6ent ~of new graduates ceuticals
approx 120 outaide education in Japan, a~prox 1 maltose and pururan for
employment of new graduatea use in pharmaceuticals,
grape augar for use in
food, sweeteners
aeveral in-housm training, outaide bread yeast, steri-
education in Japan, lizing livestock feed,
employmeat of new greduates SPF (specific pathogene
and people in midcareer free) animal breeding
several ~ o e rs n n, ou s e 15 million improvement and sale
~~~~atie~~iof3n.an ab~soverseas, en of seeds
several outside education in Japan 100 billion
~ and overaeas, employment of yen
, new graduates and people in
midcareer
41
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400050006-6

APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-00850R440400050006-6
FOR OFFICIAt. USE ONLY
Nippon Oil alcohol for fixed microorgan- within 10 Central
use as fuel isms years Research Lab
pharmaceuticals fermentation by 3-4 years
variant roota
Hitachi Ship- chemical produc bioreactor 5-6 years Technology
building and tion equipment Research Lab,
Engineering Chemical
Research Section
Mitsui Ship- pollution high-density in 1981 Bioscience
building and prevention aontinuous Laboratory
Engineering . � fermentation .
slctif3cial �
i~
Japan Gaeolin synfuels fixed micro- 2-5 years Technology
oY anism method Reaearch Lab
- Chiyoda Chemi ~iohsz~rd already
cal Engineer- pz~vottti~on applied
ing and aquip~tat '
' Construction
Toyo telluloae ~ enzyme reaction undeter- Technolo~y
Engineering plants mined Laboratory
~ Process Lab
Sumitomo biohazar$ Technology
Chemical p+r~vention Dept
- En inee'rin e ~ at
Matsushita ~eth"sRe produc- btcrmass conver- 1-2 years Energy Con-
Electric tios~r'equipment .siqn technology version
Industrial btoeei?por fixed enzyme 4-5 years Laboratory,
fermentation Matsuehita
Battery
Industr Lab
Fuji biobazard already
Electric pXav~ntion applied
~a ~ ii~
42
FOR OFFICUL USE ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400050006-6

APPROVED FOR RELEASE: 2007/02/49: CIA-RDP82-00850R000400054006-6
- several in-house training, outside approx 200
education in Japan, million yen
employment of new graduates
employment of new graduates equipment for sludge
and people in midcareer treatment
several in-house training, employment several tens active sludge method,
of people in midcareer of millions alcohol fermentation
of yen
several in-house training, employment 100 million all types of related
of ~o le in midcare r en lants
several outside education in Japan and approx 100 fermented alcohol
ov~raeas, employment of new million yen plants
raduatea aad eo le in midcareer
several outside education in Japan and 10 million
overseas, employinent of new yen
r, uates
several i~-1i~tlse training, employment several biomass conversion
of nati gY~duates amd people in hundred energy
midcsreer. million yen
COPYRIGHT: Nihon Keizai Shimbuaeha 1981
9651
CSO: 8129/1561 ~D
43
FOB OFFICIAL U3E ONLY
APPROVED FOR RELEASE: 2007/02/09: CIA-RDP82-00850R000400050006-6