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Mitsubishi
By
Markus Heissler
 
 
 
Keywords:  Japan; Mitsubishi Group; Private industry; Rice; Food processing; Plant breeding.
Correct citation: Heissler, M. (1995), "Mitsubishi." Biotechnology and Development Monitor, No. 22, p. 7-8.
 

The Mitsubishi Group is one of the largest business groups in the world and Japan's largest financial and industrial association. About 41 core companies are united under the Group's umbrella. Besides the production of well­known products such as Mitsubishi cars and Nikon cameras, the Group is involved in biotechnology research and development through the member companies Mitsubishi Chemical Corporation and Kirin Brewery Company.

The Mitsubishi Group is the post­war successor of the Mitsubishi Zaibatsu, one of the giant Japanese industrial and financial conglomerates before World War II. After the war, under the impetus of US anti­trust policy, the 1947 Anti­Monopoly Act formally dissolved these huge conglomerates by dismembering their corporate structures into autonomous corporations. Although holding companies were prohibited under the anti­trust laws, the old corporate structures were transformed into even more powerful financial and industrial business groups. Besides Mitsubishi, five other large groups (Mitsui, Sumitomo, Fuji, Dai­Ichi Kangyo, and Sanwa) gained a dominant position in the Japanese economy.
The nucleus of the Mitsubishi Group is formed by Mitsubishi Bank, Mitsubishi Corporation and Mitsubishi Heavy Industries. The Mitsubishi Corporation, a general trading company has strong links with the Group's business activities. It is one of the largest trading houses in the world with a turnover of nearly US$ 155 billion in 1993. With its approximate 170 offices worldwide (excluding the subsidiaries) it also provides an information and sales network for the Group.
The corporations of the Group are not organized in a holding company and operate independently from each other, but they are interlinked through cross­shareholdings. Additionally, the fortnightly meetings of the 28 chairmen and presidents of the core companies of Mitsubishi (the so­called Kinyo­Kai) facilitates the exchange of views and information about the current business activities. Through Mitsubishi Chemical Corporation and Kirin Brewery Company, the Mitsubishi Group has a strong foothold in biotechnology.

Mitsubishi Chemical Corporation
In October 1994, Mitsubishi Kasei Corporation and Mitsubishi Petrochemical Corporation merged into the Mitsubishi Chemical Corporation, which now concentrates the Group's chemical business. Mitsubishi Chemical is among the top ten chemical companies in the world and the biggest in Asia. Principal products are petrochemicals, plastics, floppy disks, carbon products, agrochemicals and pharmaceuticals.
In 1971, Mitsubishi Kasei started working on biotechnology when it established its non­profit subsidiary Institute of Life Sciences. This Institute, located in Tokyo, is fully focused on basic research and employs about 180 researchers. The corporation funds the Institute and is the owner of all its research results. The transformation of basic research results into commercial products is the task of Mitsubishi Chemical's Research Center in Yokohama, where 400 researchers work in biotechnology­related fields.
Besides its own R&D in biotechnology, the corporation has established strategic alliances with US biotechnology companies. In 1982 it started a co­operation with Genentech, a world leader in genetic engineering. The two rDNA pharmaceuticals which Mitsubishi Chemical has commercialized are both licensed from Genentech (USA). The first one is a t­PA (tissue plasminogen activator), which is used for coronary thrombosis. The second one is a hepatitis­B vaccine. Mitsubishi Chemical also co­operates with the Californian biotechnology company IDEC in the area of therapeutic monoclonal antibodies against auto­immune diseases and transplant rejection.
Another part of the corporation's R&D strategy is the participation in state­financed projects such as the Protein Engineering Research Institute (PERI) in Osaka. PERI has been initiated by the Ministry of International Trade and Industry to conduct basic research on protein engineering in co­operation with companies and university researchers.

Rice
In 1982, the former Mitsubishi Kasei and the trading company Mitsubishi Corporation established the Plantech Research Institute. The Institute focuses on plant breeding technology and plant improvement of especially rice, carrots and cabbages. This joint venture has provided Mitsubishi Chemical with a strong partner that could market seed products, while Mitsubishi Corporation gained access to research in agricultural biotechnology.
Being a major food crop in the Asian region, research on rice might be a profitable business. Rice improvement is considered important for sufficient food supply in the region, especially in a situation where the production of rice cannot keep up with the population growth.
In 1987, Plantech succeeded in producing transgenic rice. Further R&D focuses on virus and insect resistance. Virus­resistant rice has been obtained through the introduction of a gene encoding the coat protein of the rice stripe virus. Insect resistance was created through the introduction of an insecticidal protein gene of Bacillus thuringiensis into rice protoplasts. As one of the first private entities in Japan, Plantech performs field tests with genetically­engineered rice, but before commercialization the Health Ministry's safety guidelines have to be met. Plantech already markets rice varieties resistant to strong winds, heavy rain and frost. These varieties were developed using protoplast mutation.

Kirin Brewery Company
The Kirin Brewery Company is the largest brewery in Japan and the fourth largest in the world. Kirin is a core company of the Mitsubishi Group. The company is diversifying its business to other fields of biotechnology application, such as the development of pharmaceuticals and plant breeding technology.
In the early 1980s, the Japanese government barred Kirin from increasing its 50 per cent market share in the domestic beer market. Therefore, the company was forced to search for other business areas to expand its activities, which resulted in the establishment of a drug division. The current medical research strategy of Kirin is focused on anti­cancer, cardiovascular, and immuno/allergic drugs.
Based on the technological knowledge of the US company Amgen, Kirin produced the gene recombinant drug EPO (erythropoietin), which became one of their first successful rDNA products. EPO is a hormone that stimulates red blood cell production to treat renal anaemia. Another successful product of the Kirin­Amgen alliance was the development of G­CSF (granulocyte­colony stimulating factor) which promotes the proliferation of white blood cells. It is widely used in association with cancer treatment and bone marrow transplant. In 1993, Kirin sales of both products reached about US$ 230 million. Major export markets for EPO and G­CSF are South Korea and Taiwan. To conquer the large Chinese market for these products, Kirin recently also joined its marketing operations with Amgen. Together with the Japanese food company Ajinomoto, the company has started research on AIDS treatment.

Kirin's plant breeding activities
Besides pharmaceuticals, Kirin has developed biotechnology processes and products for agricultural purposes since 1982. Kirin's research is focused on plant breeding technologies to produce flower and vegetable seedlings. It uses tissue culture in combination with the so­called "plug method". Hereby seedlings are grown in long rows in special receptacles, which in turn are removed from the containers in soil plugs for replanting. Additionally, Kirin developed the first robot to cut seedling plugs of uniform size and to transfer them to sterilized receptacles.
To strengthen its plant breeding business activities, Kirin acquired Twyford International, USA, a major production and trading company of tissue­cultured plants. In Twyford's Californian plant alone, 40 million seedlings per year are produced. Kirin further participates in a state­financed programme of the Japanese Ministry of Agriculture, Forestry and Fisheries to decipher the entire genome of the rice plant. A year earlier Kirin established a joint venture with Calgene (USA) to produce and sell seed potatoes. Together with its affiliate Tokita Seeds, the company developed new plant species such as senposai, a cross between cabbage and komatsuna (Brassica campestris), new varieties of tomatoes and bunching onions, using tissue culture.
Kirin also has a strong foothold in the production and trade of chrysanthemums. In 1993 it acquired the Dutch Fides Beheer, the world's largest company in the breeding, production and sale of chrysanthemums. Kirin conducts research on developing new varieties of chrysanthemum using cellular breeding and genetic engineering (see also Monitor No.20).

Environmental criticism
The Mitsubishi Group is cultivating an image of environmental consciousness and global responsibility. For example, its leading company, the Mitsubishi Corporation, is a member of the Business Council for Sustainable Development. This Council is an association of multinational corporations, and was founded before the UNCED conference, to promote the sustainable utilization of the world's resources.
Notwithstanding these efforts, Mitsubishi is confronted with criticism from environmentalists and local communities. Campaigns against the company started with a call for a boycott by the Rainforest Action Network International of all products of the Group. The aim of the boycott was to convince Mitsubishi to stop cutting tropical wood in the endangered forests of Malaysia. Responding to this criticism the company established a global environment committee, whose first decision was to launch a reforestation project in the most damaged area of the Malaysian rainforest, in the province of Sawarak. This, however, did not stop Mitsubishi from trading in tropical wood.
Mitsubishi's public image was also damaged by the case of the Asian Rare Earth Company (ARE). ARE was established in 1982 by the former Mitsubishi Kasei in co­operation with local Malaysian companies. In 1985, ARE was sued by residents of a local community. They wanted the corporation to stop producing and storing radioactive waste in the vicinity of the village. Mitsubishi, like many other companies, transfers its hazardous production to countries with less stringent environmental legislation. Although the local community lost the lawsuit in 1993 after an eight­year court battle, Mitsubishi nevertheless closed the factory for, as they claim, economic reasons. Japanese non­governmental organizations, such as the Consumers Association of Japan, are trying to pressure the company to take responsibility for the elimination of the radioactive materials produced by ARE and the health problems of local residents allegedly caused by the plant.
Markus Heissler

Sources
R. Arnold (1989), "The world of Mitsubishi". Bilanz, no. 8.

Mitsubishi Kasei Corporation (1994), Annual report.

Kirin Brewery Company (1994), Annual report.

People's Action Network to Monitor Japanese Multinationals (1994), "Mitsubishi Kasei closes polluting plant in Malaysia". AMPO Japan­Asia Quarterly Review, vol.25, no.1.



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