TOKYO -- Canon Electronics is leading a venture that will work on developing a rocket specifically to carry small satellites into space.
Canon is joining IHI Aerospace, construction company Shimizu and the government-backed Development Bank of Japan in the venture.
The new company will be founded on Wednesday with capital of 200 million yen ($1.8 million). Canon Electronics will take a 70% stake. The three other parties will have stakes of 10%.
The business is not expected to get underway until at least the end of fiscal 2017. When it does begin operating, it will try to meet some of the surging demand to carry small satellites into space with a small, low-cost rocket.
The partners plan to develop the rocket using technology from the SS-520 minirocket owned by JAXA, Japan's space agency.
Canon Electronics supplies the SS-520's control equipment.
An SS-520 voyage in January, the rocket's first, ended in failure. Canon Electronics says it will draw from the experience.
IHI Aerospace has experience developing and launching solid-fuel rockets.
Shimizu is studying how it can apply its construction technology to space development. A subsidiary has engaged in consulting work regarding space.
The DBJ is providing a 100 billion yen line of credit to the company over the next three years.
The rocket industry has been accelerating in the U.S. In May, an American venture launched a small rocket.
According to one estimate, demand to carry small satellites into space will more than quadruple by the early 2020s to about 500 units.