Tokyo-based Sumitomo Corporation (www.sumitomocorp.co.jp) and Nagoya-based Daido Steel Co (www.daido.co.jp) have agreed to establish a joint venture in Wuxi (Jiangsu Province), for the purpose of expanding the high-grade tool-steel distribution and processing business in China.

The name of the new company will be Wuxi Summit Nikka Metal Products Co Ltd, and it will be owned by Sumitomo and Daido Steel in an 81:19 ratio.

Tool steel is used to make dies and moulds; China is currently the world’s largest producer of these, with their value increasing from 200 billion yuan in 2015 to 250 billion yuan in 2020.

It is anticipated that there will be a greater focus on high-grade tool steels, particularly for forging dies and die-cast moulds for automotive parts.

Before this latest agreement, Sumitomo and Daido Steel were engaged in a two-decade partnership to develop the tool-steel distribution and processing business in East and South China, as part of efforts to expand sales of Daido Steel’s high-grade tool steels in China.

Wuxi Summit Nikka will help to satisfy the growing demand for tool steel. The launch of commercial production and sales is scheduled for mid-2018, when the construction of expanded processing capabilities and storage capacity will be completed.