Steel maker NKK Corp. said Wednesday it will set up a venture with seven other firms to research the feasibility of producing dimethyl ether, a clean fuel that can be used as an alternative to liquefied petroleum gas.
DME International Corp., the new company to be set up Oct. 19, will develop markets for the fuel known as DME and conduct manufacturing research over the next two years, company executives said.
DME can also run fuel cells and thermal power plants, according to NKK.
The joint venture will be capitalized at 100 million yen, with NKK holding a 34 percent stake. Toyota Tsusho Corp., a trading house of Toyota Motor Corp. group, and Hitachi Ltd., an electric power plant system maker, will own 17 percent each.
TotalFinaElf, the world's fourth largest energy company based in Paris, trading house Marubeni Corp., Idemitsu Kosan Co., a petroleum suppler, and INPEX Corp., an oil resources developer, will hold 7 percent each.
Nippon Sanso Corp., an industrial gas supplier, will have 4 percent.
The founders of the joint venture plan to begin supplying DME for businesses in 2006 and produce 800,000 tons to 1.5 million tons of the fuel annually.
NKK has been developing direct synthesis technology to mass-produce DME at low cost at an experimental plant in Kushiro, Hokkaido, since 1989.