Cheap Illegal Imports Force Indonesian Manufactures to Close

A “flood of illegal Chinese and Indian-made tyres” has caused two influential Indonesian tyre manufacturers to close. Aziz Pane, head of the Association of Indonesia Tire Companies told local newspapers that PT Intirub and PT Mega Safe Factory were the first casualties.

In 2004 PT Intirub (Indonesian Tire & Rubber Works Ltd) ran three factories and manufactured approximately 3.5 million radial and bias tyres. Around 66 per cent of production was described as “internationally competitive” and the management had previously described Great Britain as one of its markets. In 1995 the company established a technology cooperation with Cooper-Avon and, two years later began producing radial tyres. E-marking and ISO 9002 followed shortly afterwards.

In 1997 PT Mega Rubber held 40 per cent of Intirub’s shares. By 1999 this had grown to 53 per cent. At roughly the same time PT Mega Safe grew out of the cooperation with Cooper-Avon. From this point on the company produced Mega Radial brand radial tyres.

Aziz Pane revealed that illegal tyres are entering Indonesia from Singapore through Batam, Jambi, Pekanbaru, Dumai and Tanjung Balai. He explained: “It is hard to predict [the market] for 2007 because there are many uncertainties. Increase of electricity tariffs would be one of the examples,” he said.

Indonesia’s average annual production is 45 million tyres. 11.2 million units are sold on the domestic market.