INTERNATIONAL TRADE State cultivates Japanese contacts


TOKYO -- D. Michael Grose is paid by the State of Maryland to wine, dine and socialize with Japanese businessmen.

His spacious office, by Japanese standards, is located in Ginza, Tokyo's hottest shopping district, and is an indication of how serious Maryland is in attracting yen.

In the last two years, Grose and his assistant, Dr. Hirotsugu Aso, have been able to attract more than $167 million of new business investment from Japan, according to the state Department of Economic and Employment Development.

"What you have to do is cultivate the relationship," said Grose, 46. "You contact them, get to know them and you hope that will develop into a business lead or business inquiry."

In Japan, establishing a business relationship is a delicate process. Socializing with Japanese companies isn't an option but a business necessity. Often important investment deals are discussed over sake, sushi, and other traditional Japanese dishes.

Even the exchange of business cards is a ritual that if done incorrectly could set the wrong tone.

Unlike in the United States, where a business deal can be forged within a few months, the Japanese culture usually dictates a longer courtship.

"In some cases, it can take anywhere from two, three and even five years to develop something with a Japanese company," Grose said.

The Tokyo investment office is one of four foreign offices operated by the Maryland International Division. The others are in Brussels, Hong Kong and Taipei, the capital of Taiwan.

The competition for Japanese investments is tough. At least 47 other states maintain a presence in Tokyo.

Maryland's Tokyo office opened in 1980, but Grose is its first full-time director. Before accepting the position in 1986, Grose // was an educator. He speaks fluent Japanese and has lived in Tokyo off and on for 17 years.

In addition to his investment efforts, Grose is also responsible for marketing the Baltimore/Washington International Airport, assisting with tourism, and helping Maryland's Sister State Program.

Grose's marketing strategies are straightforward. He contacts as many Japanese firms, banks, investment groups as possible and pitches the virtues of Maryland.

"But just making appointments with them, saying we are Maryland and we are here looking for investments and leaving it at that doesn't really generate any real solid business," he said.

It takes time and an elaborate networking system.

His search for companies that might want to move to Maryland, known mostly for its close proximity to Washington, begins with Japanese companies that have established operations in the United States, such as banks and their investment sections, construction companies and trading companies.

"Sometimes you can get a tip and try to make an entry," he said.

Grose proudly points to his first catch, Fujisawa Pharmaceutical, which wanted to move from New York. Fujisawa opened a five-person marketing and research development office in Bethesda in 1987. Now the office is up to 80 people and still growing, he said.

It took about six months to consummate the deal, Grose said. It was an easy one compared to other attempts to get Japanese investments.

Maryland's biggest problem is its image--or lack of one, Grose said.

"I think part of the problem is that we are between New York and Washington, D.C. and we are in the shadows of Washington. Therefore, a lot of the time, when things occur in Maryland, it gets reported as a suburb of Washington D.C. It's frustrating," he said.

Maryland also isn't cheap compared to some other states, a factor that has sent some Japanese companies to the South or the Midwest.

The Baltimore-Washington corridor has a large concentration of the state's population. Land is expensive, wages are higher than the national average and unemployment is low, Grose said.

So when Japanese companies begin choosing locations for ((TC plant, Maryland often strikes out in key areas.

"Companies looking at manufacturing sites look for cheaper land and cheaper labor," Grose said. "But I like to say we have a higher quality labor and higher productivity."

His salesmanship almost worked in 1986 with Konica Supplies Manufacturing USA Inc., which manufactures cameras, film and office machines.

But Konica's major U.S. manufacturing photographic division, Konica Village, went to North Carolina. Maryland was its second choice.

But Grose said he never lets a source die.

In the summer of 1987 Konica approached Maryland again.

The company wanted to establish another plant to produce toner for copiers. Grose said his office helped by making numerous site recommendations. After a year, Konica decided to purchase land in Cecil County, near I-95, where it would have access to the photocopy market between Boston and Atlanta.

In 1988, Konica made a capital investment of $25 million, creating about 100 new jobs. In 1989, Konica decided to purchase an additional 26 acres near its plant to produce plain paper copiers, Grose said.

"I don't think I used any particular charm," Grose says modestly about his investment efforts. "I tried to give them as much information on the state as fast and as prompt as possible."

Aside from trying to attract manufacturing facilities to the state, Grose said he's venturing into the biotechnology, high-tech and telecommunication fields.

"They are going to be the growth area for the future," he said. "I think we have sowed a lot of seeds in biotechnology. It will begin to pay off for Maryland in the next two to three years."

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