Tire market 'to grow by over 40% this year'

TANGERANG, West Java (JP): Indonesia's four-wheel tire market is expected to grow by over 40 percent this year on the back of the country's economic recovery, according to a senior official at publicly listed tire manufacturer PT Gajah Tunggal.

Assistant to Marketing Director Aziz Pane said on Monday the domestic market would absorb about 11.2 million four wheel tires this year, compared to 7.6 million tires in 1999 and 5.7 million tires in 1998.

"This is based on the positive assumption that the ongoing economic recovery in Indonesia continues to proceed normally," he said after a meeting with representatives of tire distributor Reifen Gundlach of Germany.

He said a German buyer had agreed to increase their order from the company to 150,000 four wheel tires this year from 50,000 tires last year.

Gebhard Jansen, the managing director of the German company said his company had been ordering radial winter tires for four wheel vehicles from Gajah Tunggal since last year.

He said, besides its competitive price, the quality of Indonesian tire was better than those from South Korea.

Gajah Tunggal General Manager for Marketing E.K. Law said Gajah Tunggal currently exported 85 percent of its radial car tires and 40 percent of non-radial tires and 10 percent of motorcycle tires.

The company exports to about 80 countries with the United States and Germany as the first and second biggest buyers.

"Our plant's daily production capacity is 25,000 radial tires, 10,000 non-radial tires and 35,000 motorcycle tires," Law said.

He said that the plant had been operating at over 90 percent of its capacity for the past year.

"During the economic crisis the domestic market shrank to only about 30 percent of the pre-crisis market," he said. But the crisis did not really affected Gajah Tunggal as most of the company's tire products were sold overseas, Law explained.

He said the company acquired 85 percent of its raw material from the local market and the rest from imports, in the form of chemical additives.

Gajah Tunggal is listed on the Jakarta and Surabaya Stock Exchanges. Principles in the company are Gajah Tunggal Mulia (57.18 percent), PT Gajah Tunggal Sakti (10.08 percent), PT Surya Grahareksa (0.01 percent), cooperatives (0.24 percent) and the public (32.49 percent). (udi)