Rubber prices high, tire companies thrive

Thu, 01/19/2012 - 14:05

The steeping rubber prices, jumped 14 percent since November 2011 to US$3,916 per ton at the Tokyo Commodity Exchange for June delivery Wednesday, are followed by the industry's tremendous growth, proven by aggressive expansions of a number of local rubber producing companies.

Gajah Tunggal, producer of car tire GT Radial, has recently stated to invest US$10 million to finance its expansion plan in 2012, increasing the installed production capacity of its factory to 105,000 units of motorcycle tires a day from 90,000 units in 2011, and 45,000 units of car tires a day from 40,000 units last year.

The company currently controls 53 percent of the national motorcycle tire market, expecting to sell 38.35 million to 41.84 million units of all products in 2012 after the increase of production capacity, raising the company's revenue to Rp15.3 trillion from the estimated Rp12.3 trillion in 2011.

Another tire company, PT Multistrada Arah Sarana Tbk, has also planned to increase the production capacity of its car tire production by 26.6 percent from 22,500 tires per day to 28,500 tires per day, increasing its motorcycle production to 16,000 tires per day from half its capacity in 2011.

Indonesian tire demands are expected to increase by 8.25 percent to 45.46 million units from around 42 million units in 2011, while demands for car tires should stick at 50 million units in 2012. (eaz)

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