Indonesian Tire Maker Multistrada Eyes Expansion Plans

25 June, 2012

Tire maker Multistrada Arah Sarana plans to expand its business and become an industrial estate provider, the company’s chief said on Thursday.

The company argued that it was the right time for the move given what it said were government plans to require all manufacturers to relocate to industrial estates prior to December this year.

“The subsidiary will be called Kawasan Industri Multistrada,” said Multistrada president director Pieter Tanuri.

Multistrada will build its industrial estate on a 210-hectare plot of land located near Jakarta.

“We have secured a license from the Investment Coordinating Board [BKPM] to build the industrial estate,” Pieter said.

He expects the company to finish its construction by December 2014.

“Some companies have already expressed an interest in operating from within our [industrial] area. There are already investors from [South] Korea, China and India,” Pieter said.

He declined to reveal the size of the company’s investment.

Multistrada manufactures tire brands including Strada, Corsa and Achilles. It sells its products domestically and also exports.

Separately, Multistrada, through its plantation arm Multistrada Agro Internasional, is intending to grow rubber on 5,000 hectares of plantations at a cost of Rp 400 billion ($42 million). Pieter said the first production would start in five years.

Multistrada Arah Sarana is aiming for sales growth of 30 percent this year, following a drop in net income last year.

The tire company is aiming to achieve sales of Rp 3.72 trillion this year, up from Rp 2.86 trillion last year. The company’s net income fell 19 percent to Rp 143 billion last year. About 75 percent of its sales are to overseas markets.

The automotive sector has warned of a easing in growth in the second half of the year following the introduction last week of tougher consumer finance laws.

Shares in Multistrada fell 1.9 percent to Rp 520 in Thursday trading in Jakarta. They have gained 4 percent this year.

 

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