The Covid-19 pandemic has created difficulties for a number of industrial sectors, including the tire industry. The tire industry can develop if the mobility of society and business continues to increase. However, due to the pandemic, PSBB, and PPKM, the mobility of the community and business people has drastically reduced, which means that the use of tires will also decrease.
The pressure experienced by the tire industry caused a decrease in production by 60% and market absorption was not optimal. This of course also has an impact on the ability to absorb labor from the industry. Like one of the big producers, namely Good Year where if this condition continues it will cause Termination of Employment (PHK) for some of its employees.
Based on a survey from the Association of Indonesian Tire Manufacturers (APBI), in terms of consumers, such as workshops. Before the pandemic, workshop owners admitted that a daily tire change service usually benefited them with a tip of IDR 50 thousand-100 thousand per day. But now, a week to get IDR 10 thousand tips is good. This shows that there is a change in consumer behavior that reduces the use of domestic tires.
Based on this, APBI asked the government to pay attention to the existence of the tire industry, especially during the Covid-19 pandemic. The reason is that all transportation in supporting mobility cannot be separated from the role of tire parts. Ambulances, which are currently the main means of transporting Covid-19 patients, cannot operate without tires. In addition, without tires the medical personnel cannot go to the hospital.
However, from the development of sales, there are sub-businesses that actually recorded an increase in revenue amid the decrease in the tire industry. The weakening of purchasing power turned out to be a boon for the retreaded tire industry. Because the price of retreaded tires is only half the price of new tires, this product has finally become an attractive option when income and purchasing power are reduced during the pandemic and waiting for the corona vaccine. The Association of Indonesian Tire Manufacturers (APBI) predicts that the production volume of the retreaded tire industry will jump 20-30% in 2020. And in the first half of 2021, it will still experience an increase.
Retreading of motorcycle tires and reducing the volume of imports of bus and truck tires are considered to be the drivers of this growth.
Based on bisnis.com, the Indonesian Rubber Council (Dekarindo) noted that the realization of natural rubber absorption by the retreaded tire industry reached 97,700 tons in 2019 or grew 4.88% from the previous year’s realization. Meanwhile, this consumption is greater than the combined consumption of the rubber gloves and two-wheeled tires industry in the same year. Meanwhile, in 2020, natural rubber uptake by the retreaded tire industry rose in the range of 122,125 tons. Meanwhile, the production of retreaded tires is expected to increase because the retreading of motorcycle tires is one of the drivers of this growth.
GOVERNMENT ACTIONS IN OVERCOMING CONSTRAINTS OF THE TIRE INDUSTRY SECTOR
The Ministry of Industry (Kemenperin) is currently piloting an easing program for the essential sector. From these trials, one of the industries that is preparing to re-invigorate its production is the tire industry. The tire industry sector is one of the leading sectors in supporting the national economy. The tire industry is able to absorb more than 250,000 tons of natural rubber per year or about 42% of the national natural rubber consumption. There are several national brands that have been able to compete in the international market and have reached the world class tire manufacturer or global tire manufacturer. Currently, there are 17 manufacturers listed with a total installed capacity of 200 million tires per year for each of the outer and inner tires. The national tire production includes passenger car tires, light truck tires, truck and bus tires, bicycle tires, motorcycle tires, as well as tires for agricultural and agricultural vehicles. (www.ekonomi.bisnis.com)
With this easing, there are several tire manufacturers that will soon increase their operations, including PT Gajah Tunggal Tbk. (GT Tires), PT Multistrada Arah Sarana Tbk. (Achilles), PT Elang Perdana Prima Trading & Industri (Forceum), and PT Industri Karet Deli (Swallow).
In the process, the Chemical, Pharmaceutical and Textile Industry (IKFT) of the Ministry of Industry has checked one of these companies, namely PT. Gajah Tunggal Tbk and conduct full production trials. Based on its current status, with the Operational and Mobility Permit for Industrial Activities or IOMKI, Gajah Tunggal has more than 130 export destinations, which include the Americas, Europe, Asia, and the Middle East. Based on its current status, with the Operational and Mobility Permit for Industrial Activities or IOMKI, Gajah Tunggal has more than 130 export destinations, which include the Americas, Europe, Asia, and the Middle East.
Meanwhile, the current production capacity of PT Gajah Tunggal reaches 157 million tires, the types of production include passenger car tires with rim sizes 12 inches – 20 inches, light truck tires, truck and bus tires, and motorcycle tires. Their total export volume since 1983 has penetrated 165 million tires.
With production capacity and long experience in managing its business, PT. Gajah Tunggal Tbk. It is expected to provide positive developments after being given a relaxation in operations. Likewise with the other companies mentioned above.