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Business Briefs

Reported by Star-Bulletin staff & wire

Monday, July 31, 2000

X-ray treatment plant ships Big Island fruit

The new X-ray fruit treatment plant at Keaau, south of Hilo, began shipping papaya to the mainland today, according to its operator, Hawaii Pride LLC.

The company, owned by Kurtistown nurseryman Eric Weinert and Hilo restaurant operator John Clark, said it is starting small but expects eventually to ship 120,000 pounds a day of papaya and other locally grown fruit. Titan Corp., the San Diego-based company that provided the equipment, will receive 19.9 percent of the profits as a royalty payment. Titan said the system kills fruit flies by bombarding them with X-rays generated by ordinary electricity. The SureBeam technology avoids the criticism received by nuclear irradiation proposals, said a Titan spokesman, Wil Williams. Titan said the SureBeam system used on the Big Island is the first for processing fruit but the technology is being used in a meat-packing plant on the mainland to eliminate such pathogens as E. coli and salmonella.

Intel introduces faster Pentium III

SANTA CLARA, Calif. -- Intel Corp. today introduced a Pentium III processor running faster than one gigahertz, beating rival Advanced Micro Devices Inc. to the punch for bragging rights to the speediest computer chip on the market. AMD earlier this year beat Intel to the market by a few days with the first chip to run at one gigahertz, and plans to begin shipping a 1.1 gigahertz chip on Aug. 28. Processors are the "brains" of PCs. One measure of their performance is the "clock speed," measured in hertz, or cycles per second. Intel's new Pentium runs at 1.13 gigahertz, or 1.13 billion cycles per second.

In other news . . .

NEW YORK -- Cigarette manufacturers are hiking wholesale cigarette prices by 6 cents per pack, a move analysts say is in anticipation of increased settlement payments due next year.

Consumers will likely see an increase of 8 cents per pack. New York-based Philip Morris Cos., which commands more than half of the U.S. market alerted wholesalers Friday of its decision to raise prices, effective today.

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Of Mutual Concern

News for mutual fund investors

State Farm to sell funds through agents

BLOOMUNGTON, Ill. -- State Farm Mutual Automobile Insurance Co., the largest U.S. home and auto insurer, is entering the crowded mutual fund marketplace.

The Bloomington, Ill.-based insurer plans to introduce 10 mutual funds later this year, which will be sold by its agents and targeted to buyers of variable annuities but also available to the general public. State Farm has offered variable products since 1998 and has sold them to about 14 percent of its property-casualty customer base, suggesting room for growth. Still, competition's fierce.

"With 50 to 60 fund families in an already crowded marketplace, State Farm is going to face a real challenge," said Geoff Bobroff, a mutual fund consultant. "It's going to be an uphill battle."

The insurer said a new unit, State Farm Investment Management Co., will oversee seven of the funds, while Capital Guardian Trust Co., a unit of Capital Group Cos., will sub-advise on two funds and a unit of Barclays Global Investors will manage three others.

The funds will include a large-cap equity index fund, a small-cap equity index fund, an international equity index fund, a stock-and-bond balanced fund, a bond fund and a money market fund.

Variable annuities are investment vehicles that allow people to invest in various mutual funds and upon retirement guarantee an income for life based on the amount of money in the account. These products typically carry higher fees than stand-alone mutual funds, because of the insurance component.

Variable annuities are one of the fastest-growing segments of the life insurance business. According to the American Council of Life Insurance, sales have grown at an average annual rate of 41.3 percent a year since 1988 to about $104.4 billion in 1998, the latest year for which figures are available.

State Farm says it has taken about $133 million in variable annuity premiums fo far this year, compared with from $239 million for all of 1999.

Mutual fund owners big users of Internet

WASHINGTON -- Just over two-thirds of U.S. households owning mutual funds use the Internet, checking fund performance, costs and other information about their accounts, the fund industry's trade group said.

A study by the Investment Company Institute found that shareholders who used the Internet typically had $40,000 invested in four funds. The median age of the Internet user was 42 years and median household income was $63,900. Median household financial assets amounted to $100,900.

In all, 68 percent of the 48 million U.S. households owning funds use the Internet, the ICI said. Nearly half of shareholders who used the Internet during the April 1999-March 2000 study period visited mutual fund Web sites.

The study found that although 51 percent of the fund-owning households conducted transactions during the prior year, only 9 percent bought or sold fund shares online.

Those conducting fund transactions, such as allocation changes in their retirement plans, were typically younger, with greater household income and greater financial assets. However they owned smaller mutual funds portfolios than those who conducted transactions by other methods.

The study found that 60 percent of fund households that were online used the Internet to check stock prices, 49 percent used it to read online financial publications and 44 percent used to it to get information about retirement or personal financial planning.