Sunday, 12 October 2014


Tyre producers in Indonesia were optimistic that mandatory implementation of the Indonesia Standard of Quality Certification [SNI] for vehicle tyres would strengthen competitiveness of national tyres when AEC was effective in 2015. As known, the Ministry of Industry had set deadline for tyre producers to immediately obtain SNI certificate not later than February 2015. The policy was written in the Regulation of the Ministry of Industry No 68/2014 effective as per August 11 2014 on the application of SNI for tyres.

The regulation stated that tyres could still be produced with reference to SNI 2002 not later than 8th week of 2015. This rule applied to substitute tyre or Original Equipment Manufacture [OEM]. Tyre producers represented by the Association of Indonesia Tyre Producers [APBI] rated Permenperin No.68/2014 was more stringent compared to the previous regulations. The regulation helped to strengthen Indonesia made tyres in AEC 2015. “We are optimistic that this policy would strengthen Indonesia’s competitiveness in Asean market, Azis Pane, Chairman of APBI stated on Monday [22/9].

Azis believed that Permenperin No. 58/2014 could protect domestic tyres if implemented seriously. All foreign products interning Indonesia must meet SNI standard of qualification which was different from the standard abroad. Azis stated that imported goods without SNI were forbidden to enter Indonesia. Uncertified products already entered must be deported or destroyed.

Azis saw that smuggled cars had stormed the domestic market in the past few years. The number came to 50% of total tyres circulating in the market. A condition as such was unfair to domestic tyre industry, because consumers tend to buy smuggled goods which were 15% cheaper. In this case Indonesian tyre producers as members of APBI urged the Government to implement Safeguard to wall out illegal tyres.

Azis said that illegal tyres were freely circulated in Sumatra, Kalimantan and Sulawesi which were areas easily penetrated by smuggled goods. He was expecting that the Ministry of Trade and the Customs Dept, Ministry of Finance tightened control over traffic of goods. The smuggler’s modus of operandi was falsifying customs documents. Legal tyres were mostly from India and China, they even bore SNI logo to device consumers.

Data of the Ministry of Industry 2013 had it that total value of imported tyres came to USD 24.31 million; tyres for agricultural and forestry tyres USD 9.18 million and import of other tyres USD 518.57 million. soaring import of illegal tyres happened since the USA stopped Generalized System of Preference [GSP]. The moment the Regulation was applied tyre producers from India and China threw their excess of production to Indonesia.

Meanwhile on the export side APBI noted that through January-May 2014 sales of auto tyres was posted at 19.46 million units, down by 1.42% against same period in 2013. Azis saw that national tyre market in 2014 was losing steam and triggered loss. Sales of tyres sank deep as world’s rubber price dropped. Upon entering Semester II-2014, Azis predicted that national trye industry would have to face hard challenges at home and abroad. (SS)

Business News - September 26, 2014

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