RI tires maintain grip in Egypt despite new local factory

Indonesian tire manufacturers remain confident of maintaining their market share in Egypt, despite the country’s state-owned enterprise plan to revive an idle plant to become the largest producer in the Middle East.

Indonesian Tire Association (APBI) chairman Aziz Pane said Thursday he had heard about the plan from the Indonesian trade attaché in Egypt, who quoted news from MENA News Agency, the local news agency.

“I’ve heard that the Egyptian company plans to invest US$109 million. That won’t be enough…to revamp the entire manufacturing facilities of the idle plant [to be able to compete with Indonesian products],” he said.

The investment would allow the plant to produce a maximum of only 600 tires a day, or 219,000 tires a year, he said.

“If they want to compete with us, they will need to invest at least $200 to $300 million, to produce 1,500 tires a day [around 547,500 tires a year], of a high quality,” Aziz said.

The Egyptian company needed to invest that amount to replace all the idle plant’s outdated manufacturing facilities, for example molds that could cost at least Rp 40 million ($4,360) each, he said.

“That company will need lots of new molds because there are thousands of tire sizes,” Aziz said.

MENA reported earlier this month that the Egyptian government had planned to build the biggest car tire plant in the Middle East through its state transportation and machinery enterprise, Transportation and Engineering Company (Trenco), with a total investment of $109 million.

The plant, expected to produce 1.5 million tires a year, would be built in El-Amerya, west of Alexandria, within the next two years, MENA said.