Kyowa Hakko Kogyo Co. and Showa Denko K.K. may team up on the production of the paint solvent ethyl acetate, the firms said Monday.
"We are earnestly considering it but have yet to decide on details," Kyowa Hakko said in a statement. Showa Denko issued a similar statement.
The Nihon Keizai Shimbun business daily reported Saturday that the two firms will jointly establish a company this year to integrate their ethyl acetate production activities.
The newspaper claimed that Kyowa Hakko wants to trim its production of chemicals in order to intensify its focus on medical and bioscience operations, while Showa Denko hopes to expand its chemical output in order to boost its price competitiveness.
The two companies hold a combined 80 percent of Japan's 20 billion yen market for ethyl acetate. Showa Denko is the market leader while Kyowa Hakko holds the No. 3 slot.