JAKARTA, Indonesia (June 1, 2012)—Pirelli & C. S.p.A. is joining with P.T. Astra Otoparts Tbk. of Indonesia to build a motorcycle tire plant in Indonesia in a four-year project valued at $120 million.
Pirelli will hold a 60-percent interest in the as-yet unnamed joint venture the companies are forming. Astra Otoparts, a Jakarta-based automotive components maker, will own the remainder of the venture, which will produce bias-ply motorcycle tires, primarily for the domestic and other Asian markets.
The plant is expected to come on stream in the second half of 2013 with estimated annual production of about 2 million tires in 2014, Pirelli said. When fully operational in 2016, output should reach 7 million units annually.
Construction of the factory, located a short distance from Jakarta on a 62-acre site, is expected to begin in the fourth quarter.
Astra will take 3 million units of the plant's output to sell as Astra brands, while the remaining 4 million—equal to about one-fourth of Pirelli's global motorcycle tire production—will be sold as either Pirelli or Metzeler tires.