SUBANG, Indonesia (Aug. 19, 2013) — P.T. Astra Otoparts Tbk. and Pirelli Tyre S.p.A. have broken ground on their $130 million joint venture motorcycle tire plant, with initial production anticipated before year-end 2014.
The plant, being built in Desa Wanakerta, Subang, West Java, is expected to come on stream with an initial annual production capacity of 2 million bias-ply motorcycle tires, ramping up to 7 million units when fully operational, Astra said.
Desa Wanakerta is a developing industrial area about 50 miles east of Jakarta, Indonesia. The project is being built on a 62-acre plot of land the partners acquired there.
Pirelli and Astra, a Jakarta, Indonesia-based automotive components maker, disclosed their plans for the joint venture in mid-2012.
Pirelli owns of 60 percent of the company — dubbed P.T. Evoluzione Tyres (Evoty).
The partners have agreed to allocate 40 percent of the plant's output for domestic sale through Astra Otoparts' distribution network.
The recent ground-breaking ceremony was overseen by Paolo Benea, president director of Evoty, and Rahmat Ependy, head of Purwadadi sub-district, Subang.
Pirelli and Astra earlier said the factory will employ 750 at full production.
This will be Pirelli's fourth production site for motorycle tires; the others are in Breuberg, Germany; Gravatai, Brazil; and Yanzhou, China.
Two-wheeler tires account for about 7 percent of Pirelli's global revenue.