PT Gajah Tunggal Tbk has prepared a US$ 10 billion capital expenditure (Capex) for machine maintenance and semi-automated machine procurement.
Founded in 1951, Gajah Tunggal is a tire manufacturing company that produces tires and other related parts for passenger cars, commercial vehicles, off-the-road vehicles, industrial vehicles and motorcycles. The company produces famous tire brands such as GT Radial, Giti, Gajah Tunggal Bias, IRC Tire and Zeneos.
Gajah Tunggal Director Kisyuwono explained that the procurement of semi-automated machine, which is part of the maintenance measure, was due to the outdated machine age.
“Meanwhile, our sales growth target is between 10% and 15%,” he said during a public expose on July 28, 2022.
Until June 2022, the company has realized its Capex spending to US$30 for purchasing factory buildings and machinery and equipment owned by the company’s subsidiary PT IRC Gajah Tunggal Manufacturing Indonesia.
“In the second semester of 2022, the company’s Capex of US$10 million will be allocated for engine maintenance,” said Kisyuwono.
According to the company’s annual financial statements, Gajah Tunggal posted net sales of IDR15.344 trillion. In the first half of 2022, the company recorded net sales of IDR 8.28 trillion, a 14.14% increase compared to net sales in the same period last year of IDR 7.26 trillion.
The weakening rupiah to US dollar may bring an impact to tire exports. The increasing prices of raw materials – natural rubber, synthetic rubber, tire cord and carbon black – in the 2022’s first half also impacted the company to raise its spending. With no sign on declining raw material prices, the company might be hit hard longer.
