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Starbucks Subsidiary Shows Record Sales and Loss of Profit in Japan - 2002-05-24

The Japanese subsidiary of coffee shop chain Starbucks posts mixed results and Japan's trade surplus with the rest of the world widens as exports increase.

Starbucks Coffee Japan unveiled record sales, and a sharp drop in profit for the last fiscal year. Sales grew 63 percent from last year, Starbucks says, largely because the company is opening more stores, mostly in Tokyo. But net profit sank 49 percent, because of tax charges associated with its stock-market debut.

Company officials express concerns about growing competition in Japan, where coffee cafes are extremely popular.

Yuji Tsunoda, Starbucks Japan's chief executive officer, tells reporters that competition is getting more severe. He adds that the company will try to improve profitability while continuing to open more outlets.

Starbucks aims to expand to five hundred stores in Japan within two years.

Four of Japan's top five steel makers are suffering from hefty losses for the year that ended in March. They blame poor domestic demand and lower prices.

Nippon Steel, the country's largest steel manufacturer, says it lost 230 million dollars compared with a strong profit last year. NKK, the number two in the industry, was hard hit by the collapse of its U.S. subsidiary National Steel.

For the next business year, all five steel makers predict a turnaround.

However, U.S tariffs on steel products from Japan and other countries worry Japan's steel industry. Tokyo has complained about the tariffs to the World Trade Organization.

According to the latest trade data from the Japanese Finance Ministry, Japanese steel exports to the United States fell 27 percent in April from a year earlier. But the country's overall trade surplus with the world rose nearly 27 percent. That marks its second consecutive month of growth.

Increased demand for exports to other parts of Asia has contributed to the healthy performance. Export rose 1.6 percent but imports dropped for the ninth straight month.