Italy’s Pirelli plans to build a new tyre plant in Indonesia in a joint venture with PT Astra Otoparts, the country’s largest automotive components group.
Pirelli will take a 60% stake in the US$90m factory, which is scheduled to start operations in 2013 – initially to produce motorcycle tyres. It will have a capacity to produce 7m units per year, for sale domestically and for export to other developing markets in the region.
The Indonesian motorcycle market is expected to exceed 7.5m units in 2011. The company expects to sell 2m motorcycle tyres per year domestically, with the remainder destined for export, when full production is reached in 2016.
The local availability of natural rubber makes Indonesia an attractive export to base for tyres and other automotive products. The company will likely add passenger vehicle tyres at a later stage.