Since the first quarter of this year, the capacity utilization rate of Indonesian tire companies has dropped significantly.
Aziz Barne, chairman of the Indonesian Tire Industry Association (APBI), said that since the lifting of some restrictions on imported tires this year, the Indonesian tire industry capacity utilization rate has dropped from 64% to 52%.
According to the data he provided, Indonesia can produce 85 million tires per year, but at present, only 45 million can be produced per year, and the capacity utilization rate is only 52%.
It is understood that at the beginning of this year, Indonesia issued the No. 6 Trade Ministers Regulations of 2018, replacing the No. 77 tire import trade ministers regulations of 2016.
Aziz said that since then, the number of imported tires has increased significantly. As of April this year, Indonesian tire imports increased by 127% year-on-year.
The Indonesian Tire Association has appealed to the local government to increase restrictions on imported tires.
Indonesian Ministry of Industry officials said they would re-examine the efficiency of Trade Ministers Regulation No. 6 of 2018, while they are evaluating the implementation of the post border policy.