Tyre industry in Indonesia would predictably hard to score better performance this year, many hard challenges had to be faced at home and abroad. Azis pane, chairman of APBI stated on Monday [1/12], that sales of tyres might stagnate this year.
He projected that next year sales of tyres was only posted at 1.2 million units, the same as this year. Azis that the challenges to tyre industry at home was slow moving economic growth. Adverse economic condition reduced purchasing power for card with chain effect on tyre sales. Abroad, the pressure originated from low purchasing power of buyer countries.
Azis stated that the sales portofolio was domestic sales 7.52 million units of tyres and export 11.94 million units of tyres. Domestic sales consisted of original equipment [OE] and replacement equipment. Export volume stagnated with same attainment as in 2013. For information, the export destination countries were mostly the Middle East a small portion to Myanmar.
Azis rated that sales of tyre sank as world price was not too favorable. To refer to information from rubber contract at Tokyo Commodity Exchange in Bloomberg, world rubber price was on the downturn. Price of rubber in contract for December 2014, on august 10 2014 was posted at Yen 202.8 kilogram.
According to Azis, the national tyre industry would be subject to internal and external stimulus. at home, many people tend to wait and see before buying a car, just in case money was needed for emergency. Abroad, there was turbulence in Ukraina and the Middle East which had the potential to reduce export. Challenges also came from imported tyres, APBI data it that by May import of tyres was posted at 2.25 million units coming from India and China. “These various challenges make it difficult for us to predict tyre sales till end of year,” Azis said.
The same remark was made by Daud Husni Bastari, Chairman of Gapkino who said that export of Indonesia’s rubber was hard due to increasing supply of rubber from various countries amidst low global market absorption many countries in Southeast Asia and even Africa were posting growth in rubber production.
Daud mentioned that in 2013 based on data of International Rubber Study Group [IRSG], rubber production in Thailand came to 4.414 million tons, Indonesia 3.08 million tons and Malaysia 820,000 would continue till end of 2014. As production grew, Gapkindo was expecting new markets in the map. He remarked further that most of the exported rubber was absorbed by the tyre industry.
He was expecting to sell tyres to India, China and Japan but the there countries were having their own problem so this year there was notably no increase of demand while there was no new market, Daud said market opportunity abroad for rubber was limited, while the domestic rubber industry was not making advancement in downstreaming. (SS)
Business News - December 5, 2014