JAKARTA, Indonesia (May 18)—Groupe Michelin has bought a 10-percent share of Indonesia's P.T. Gajah Tunggal Tbk., which in turn has agreed to make an undisclosed number of Michelin associated brand car tires and to distribute selected Michelin and BF Goodrich car and light truck tires in Indonesia.
The agreement, rumored to be in the works for some time, will benefit both companies, representatives of the new partners said. The companies did not disclose the value of the 10-percent share of Gajah Tunggal's capital.
Gajah Tunggal, one of the largest tire makers in Southeast Asia with plants in Indonesia and China, expects the cooperation to strengthen its manufacturing base. The manufacturing agreement calls for Gajah Tunggal to make a "selected range" of Michelin associated brands, including high speed-rated tires, for various markets served by Michelin. The manufacturing deal excludes Michelin-brand tires.
The agreement to distribute Michelin and BFG tires will enhance the companies' distribution and market positions in Indonesia, the firms said in a prepared statement.
Michelin does not have a sales/distribution company in Indonesia, one of the most populous countries in the world. It does have subsidiary company in Singapore for the Association of South East Asian Nations market and a manufacturing venture in Thailand.