Gajah Tunggal Looking to Fill US Market Void Left by Tariffs

Indonesian tyre maker PT Gajah Tunngal is hoping to take advantage of US tariffs against Chinese made consumer tyres. The Jakarta Globe reports company director Catherine Widjaja as saying “we are looking to see if we can fill the void left after the US hiked import tariffs on Chinese tyres.”

In 2008, 46 million Chinese tyres were imported into the US, up from 14.6 million in 2004. The 35 per cent tariff has now made these products much less attractive, and Widjaja said Gajah Tunggal could increase production should a greater demand for non-Chinese tyres exist. “If demand picks up next year there could be opportunities for expansion. But for the time being, we’re monitoring cautiously, and will just optimise our production capacity,” she said. At present the Indonesian manufacturer exports around 38 per cent of its output, and the US is its largest overseas market.

According to the Jakarta Globe, Gajah Tunggal produces around 35,000 radial tyres a day and plans to increase output to 45,000 a day by 2012. It also plans to increase motorcycle tyre production from the current 37,000 tyres a day to 105,000 per day by 2012.

While Gajah Tunggal’s annual revenue is expected to be flat this year, at around Rp 7.9 trillion ($837.4 million), growth of 20 per cent is expected next year. “Despite weak sales in the first half, sales really picked up in the third quarter and we hope it will continue in the fourth also,” Widjaja commented.