A joint holding company to be formed April 1 by Honen Corp. and Ajinomoto Oil Mills Co. will merge with another cooking oil producer, Yoshihara Oil Mill Ltd., to create the largest domestic entity in the field, according to the three firms.

The planned holding firm, Honen Ajinomoto Oil Mills Inc., will combine with Yoshihara Oil on April 1, 2003, because the firms have found it necessary to increase their international competitiveness in the maturing cooking-oil market, they said Tuesday.

The joint holding firm will be renamed when Yoshihara Oil joins, but the name has not yet been decided.

Once integrated, total sales of the three companies will reach nearly 700,000 tons a year, 30 percent of the domestic market.

The figure surpasses that of the Nisshin Oillio group, a planned alliance to be formed this October by Nisshin Oil Mills Ltd., Renoru Oil Mills Co. and Nikko Oil Mills Co.

The latest three-way alliance is expected to accelerate further realignment in Japan's cooking oil industry.

Last November, Honen, a major cooking-oil producer, and Ajinomoto Oil Mills, a food oil unit of Ajinomoto Co., Japan's top seasoning maker, announced plans to integrate operations under a joint holding company on April 1.

Honen and Ajinomoto Oil have had cooperative ties with Yoshihara since 1966 and 1996, respectively.

The three companies said the three-way integration will produce about 6 billion yen in synergistic effects in the next five years. The companies also plan to cut about 20 percent of the total workforce at Honen and Ajinomoto Oil.

Honen Chairman Masaji Shima is expected to assume the presidency of the joint holding company that will oversee the three companies.

Ajinomoto Oil President Shinji Sasaki will become its vice president, while Yoshihara will send two executives to its eight-member board, they said.

The companies plan to mutually use production bases and distribution facilities to slash costs, and will cooperate in new product development and sales as well.

In preparation for the full integration in April 2003, Honen Ajinomoto Oil and Yoshihara Oil will form a strategic alliance on April 1, they said.