Major chemical company Idemitsu Petrochemical Co. and second-tier chemical maker Tokuyama Corp. will enter into a broad-based tieup in the field of polypropylene to jointly gear up competitiveness ahead of a planned gradual tariff reduction by 2004, company sources said Monday.

The two companies will promote cost cuts and may integrate their businesses in the future, the sources said.

Polypropylene is a general-purpose resin that is a material of plastic.

Idemitsu Petrochemical and Tokuyama, both of which have production facilities located next to a huge petrochemical complex in Tokuyama, Yamaguchi Prefecture, have developed close ties through their common supplies of raw and processed materials.

To compete with major European and U.S. chemical companies, which have been increasingly taking the offensive in the Southeast Asian market, Idemitsu Petrochemical and Tokuyama decided it was imperative to join forces to compensate for their common weakness in the field of general-purpose resins, the sources said.

Since Sumitomo Chemical Co. and Mitsui Chemicals Inc., Japan's second and third largest chemical firms respectively, announced last November they will integrate their management by October 2003, moves among Japanese chemical companies to reorganize operations have picked up speed.

Earlier this month a plan by Mitsubishi Chemical Corp., Showa Denko K.K. and two other chemical companies to integrate general-purpose resin businesses surfaced.

The chemical industry is paying attention to how Asahi Kasei Corp. and Tosoh Corp. will deal with the planned tariff reduction.