Gajah Tunggal, IRC building motorcycle tire plant in Indonesia

Tangerang, Indonesia – PT Gajah Tunggal Tbk. and Japan's Inoue Rubber Co. Ltd (IRC) have broken ground on a motorcycle tire joint venture plant in Tangerang.

The 50/50 joint venture, Gajah Tunggal IRC Manufacturing Indonesia, will produce IRC-brand high-performance motorcycle tires for the Indonesian OEM and replacement markets as well as exports, Gajah Tunggal said.

The plant is expected on stream by September 2019. The JV partners did not disclose the plant's size, capacity or expected employment.

In a separate filing, Gajah Tunggal said it was selling 5.8 acres of land at its Tangerang manufacturing complex to the joint venture for $253 million.

The new JV represents a deepening of a relationship between the Indonesian and Japanese companies that dates back to 1971, when IRC helped Gajah Tunggal—then a bicycle tire and tube maker—expand into motorcycle tires.

The company's existing capacity for motorcycle tires is listed as 95,000 units a day.

Sales of motorcycle tires represented about 25 percent of Gajah Tunggal's sales last year, or $264 million.

Giti Tire Group is PT Gajah Tunggal's single largest shareholder at 49.7%. Group Michelin has a 10% share.