India’s two main domestic tyre manufactures, JK Tyre & Industries and Apollo Tyres, are considering investing in full scale tyre plants in Indonesia – Aziz Pane, chairman of Indonesian Tire Producers Association, told local reporters.

The comments were made in the wake of last week’s inauguration of a new US$350m tyre plant by South Korea’s Hankook Tire.

Aziz said combined investments of the two Indian tyre companies would amount to at least $600m with $300-$350m being the minimum investment level to achieve competitive economies of scale.

Hankook’s plant is expected eventually to produce 6m tyres per year, for sale domestically and for export across Asia, the Middle East and North America. Investment in the plant is expected to rise to $1.1bn by 2018. 

Indonesia is a key natural rubber producing nation with a substantial domestic market and relatively low labour costs.