Chinese Firm Plans to Build New Tire Factory in Indonesia

Foreign media reported that a Chinese tire company plans to invest 300 million to 400 million U.S. dollars in building a tire factory in Indonesia.

Indonesian Tire Companies Association (APBI) Chairman disclosed that two tire companies were interested in the business, but only one company truly intended to build up a plant in the country.

According to the report, tire market competition in China has become increasingly intensive, labor costs continue increasing, and many producers seek for business opportunities overseas.

The Chinese investor has been looking for location for its new plant, which might be on the island of Java.

Currently, China’s tire industry is severely oversupply and producers have to look for new market.

The APBI official worried the Chinese company aims at entering into Indonesian market legally through the investment plan.

Therefore, he asked local government to be prudent about the Chinese firm’s investment plan.

Tire markets across the world have been sluggish, the demands in Middle East, Europe and North America are small, and large tire producers, such as China and India, are exploring new markets proactively.

He believed that Indonesian tire market imports at least 2 million tires illegally, which affected the competitiveness of local tires.