Gajah Tunggal expands in car, moto and tubes in Indonesia

Jakarta, Indonesia - Indonesian tyre maker PT Gajah Tunggal Tbk expects to spend US$170 million to increase production of radial passenger car tyres, motorcycle tyres and innertubes between now and 2011, according to a company spokesman.

In passenger car radials, the company expects to increase production to 45 000 units per day in three tranches of 5k u/day from the current level of 30 000 u/day. Yesterday, the Indonesian news agency Antara incorrectly reported the company was expecting to increase capacity to 50k units/day, said the spokesman.

The spokesman said the first tranche would come on stream in mid 2008; the second in mid-2009 and the final tranche toward the end of 2010, or the beginning of 2011. He added that Gajah Tunggal has an off-take agreement with Michelin and that Michelin's requirements are increasing sharply. He said 90 percent of the passenger car radials are destined for export with the biggest export market being Europe and the second largest being North America.

In motorcycle tyres, the company is also expanding in a series of equal tranches. The company will increase current capacity of 45 000 units/day in four tranches each of 15 000 units/day. The first will be onstream by the start of 2008; the second at the end of 2008 the third at the end of 2010, and the final tranche, bringing capacity to 105 000 units/day is expected to be on stream by 2011.

Inner tube production for motorcycle tyres is also expanding, rising to 154 500 units/day by the end of 2009 from the current level of 74 500 units, said the spokesman.

The spokesman was keen to underline that the expansions - especially in motorcycle tyres - are for the company's own brand products.

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Gajah Tunggal earmarks $170 million for business expansion Antara (Indonesia) -- note that the figure of 50 000 units/year for passenger car tyres is incorrect.