Indomobil to build US$120m tire plant

JAKARTA (JP): PT Indomobil Investment Corp., the holding company of the Indomobil car group, and Sumi Rubber Industries Limited of Japan agreed yesterday to set up a joint venture which will build a US$120 million tire and golf ball plant at Cikampek, West Java.

The plant project, to be designed with annual capacities of 1.5 million sedan, bus and truck tires and 2.5 million one-piece practice golf balls a day, is scheduled to start production in 1997.

"We foresee a potentially big market for tires in Indonesia, in view of the steady increase in the automobile population," Subronto Laras, president of Indomobil Investment Corp., said after the signing of the joint venture agreement.

Subronto said Sumi Rubber decided to relocate its tire plant to Indonesia after the devastating earthquake which hit Kobe last year.

Indomobil, the second largest automobile group in the country after the Astra group, is controlled by Sudono Salim and his business associates.

Subronto said the new company would market 65 percent of its tires which will use the Dunlop trademark on the domestic market and the other 35 percent on international markets.

"But the golf balls will be wholly exported," he added.

The joint venture company, called PT Sumi Rubber Indonesia, is 70 percent owned by Sumi Rubber Industries Ltd. and 30 percent by Indomobil. (04)