Mitsui Mining & Smelting Co. and Sumitomo Metal Mining Co. said Thursday they have agreed to integrate their zinc operations in an effort to cut costs and cope with intensifying international competition.
Mitsui, Japan's largest zinc operator, and fourth-ranked Sumitomo will jointly establish a company in April to procure raw materials for zinc production and to oversee product sales.
While the new company will also assume manufacturing operations, it will farm them out to the founders' plants.
The deal is expected to generate savings and other effects worth 1.5 billion yen annually, the two companies said.
Mitsui and Sumitomo will own equal shares in the new firm, although its capitalization figure and name have yet to be decided.
Employing a workforce of around 30, the firm is expected to chalk up annual sales worth 25 billion yen.