NKK Corp. and Kawasaki Steel Corp. on Friday set up JFE Holdings Inc., a joint holding company, as the first step toward forming the JFE Group and becoming the world's fourth largest integrated steelmaker.

The launch of JFE Holdings heralds a new era in which the Japanese steel industry will be divided into two giants: the JFE Group and Nippon Steel Corp.

NKK's and Kawasaki's combined crude steel production in 2001 was about 25 million tons, which approaches the output of Nippon Steel, the world's largest integrated steelmaker. That ranks them fourth in world crude steel output.