ENSCHEDE, Netherlands-An Indonesian bicycle tire maker plans to enter passenger and light truck tire production by opening a $100 million plant by 1997.
Elangperdana Tyre Industry will produce Vredestein-brand tires by using radial tire technology and know-how provided by P.T. Vredestein Consulting, according to Vredestein Banden N.V.
Elangperdana just installed a car and truck inner tube line at Bogor, just south of Jakarta, Indonesia, with Vredestein's help.
Rob Oudshoorn, managing director of Vredestein Banden, said Vredestein will provide engineering technology for a factory with an annual manufacturing capacity of 1.5 million tires.
The tires will carry the Vredestein name. The project will cost more than $100 million. Oudshoorn said Vredestein has not yet sourced the machinery, but the technology used would be similar to Vredestein's highly automated Enschede factory.
The two firms, which have been talking ``for a couple of months,'' signed the deal in early November, he said.
The first phase of the plant will be on stream in 1997, but Vredestein says the project will be expanded to make larger tires in the future.
Vredestein estimated that 40 percent of initial production will be exported.
To manage sales of the Vredestein tire exports from Indonesia, Vredestein has entered a joint venture with Elangperdana to sell tires made by both companies. Once the factory is on stream, the companies will make detailed decisions about where the tires will go.