INDONESIA: Gajah Tunggal to boost exports to new destinations

Major tyre manufacturer Gajah Tunggal will expand its exports by entering more countries in South America as part of its strategy to generate foreign-denominated income and reduce currency exposure.

Gajah Tunggal corporate secretary Catharina Widjaja said the company was now working on opportunities to boost exports and increase domestic sales as well. “We are working on our exports, studying potential markets, such as those in Latin America. We are also studying the prospect of exporting our motorcycle tyres,” she said.

Widjaja said her company, which is known by its brand GT Radial, had started exporting its radial tyres to Brazil and had begun shipping its motorcycle tyre products to Malaysia. Gajah Tunggal, whose exports make up more than half of its revenue, generates its overseas income mostly from its radial tyres. Its motorcycle tyre exports to Malaysia represent the company’s early stage of expansion. The company’s biggest export destination is the US, followed by Europe and other parts of Asia.

Widjaja said that the company did not have specific target for exports at the moment. She added, however, that Gajah Tunggal was comfortable with its current sales proportion. Exports, according the company’s documentation, made up 57 % of the company’s revenue during the first nine months of the year.

She also said that her company was looking to enhance its domestic sales proportion by enhancing its production quality to compete against new players in the country’s tyre industry.

Widjaja said that while the company sourced its materials, such as rubber, from the domestic market, most of the materials are priced in US dollars, in line with most materials in the commodity market. Therefore, the company was not immune to effects of currency depreciation. She said, however, its material costs could be easily addressed if market conditions and exports improved.

Source: Daily “The Jakarta Post”, Jakarta; 14 Nov 2015
(Syed Rashid Ali, Karachi, Pakistan)