Both companies declined to provide further details, but according to Japanese newspaper Nikkan Kogyo Shimbun, the joint venture plans to ramp up production to as much as 120 metric tons per month in 2018, with at least some of the portfolio developed for and geared to local users needs.

The Japanese tools and machinery market has been shrinking, pushing metalworking fluid manufacturers in Japan to overseas production bases. In the automobile industry, manufacturers are shifting production sites offshore, and the domestic market is contracting, noted metalworking fluid manufacturer Yushiro Chemical Industry Co. in its published medium and long-term plan in March 2016. Meanwhile, production is forecast to trend upwards globally due to growth markets in China and emerging countries, as well as the recovery of the North American market.

Figures released in December by the Japan Machine Tool Builders Association showed a decline in domestic and overseas demand for machine tools in 2016. Domestic demand fell 9.5 percent, while overseas demand fell nearly 20 percent. Although demand decreased less than 10 percent in the United States, and Europe remained unchanged, Asia’s plunged 35 percent. Automobile machine tools declined 14 percent.

Ever Chemical Industry manufactures industrial oils including synthetic and soluble metal-cutting fluids and emulsion-based fluids for automotive manufacturers. The Osaka, western Japan-based company has two domestic plants along with a facility in Thailand.In the future, it will expand into other parts of Southeast Asia, according to a source at the company.

Tjokro Group is a machinery manufacturer for automotive, mining, oil and gas and other industries. It makes injection pumps for the local automotive industry along with gears for export to Japan, the U.S., Australia and Singapore.