Following discussions announced in August, Japanese firms Zeon Corporation and Sumitomo Chemical have agreed to form a joint venture agreement to consolidate their solution styrene butadiene (S-SBR) businesses. The new company – ZS Elastomers (ZSE) – will be owned 60% by Zeon and 40% by Sumitomo Chemical and have a start-up capital of $4 million.

The companies said that although demand for fuel-efficient tires is forecast to grow steadily, competition is intensifying due to manufacturers increasing capacity. They expect the merger to have a synergistic effect and strengthen their respective S-SBR businesses. ZSE will take over sales rights and obligations and the R&D functions of the respective businesses. At present, the companies’ separate production assets will not be part of the venture but there are plans to combine these in the future. Until then, ZSE will purchase products made by Sumitomo Chemical and Zeon to use for sales.

Zeon operates S-SBR plants in Tokuyama, Japan, and Singapore, with a reported combined annual capacity of 110,000 t/y, while Sumitomo Chemical’s plants in Chiba, Japan, and Singapore have a total combined output of about 48,000 t/y. The companies said they expect the partnership will also accelerate new product development to meet customer needs, enhance cost competitiveness and secure a stable supply of product.

Zeon said ZSE will be established on Dec. 8, but not formally launched until Apr. 1, 2017.