Management of PT Multistrada Arah Sarana Tbk at the Extraordinary General Meetings in Jakarta - Photo by the Company

JAKARTA (TheInsiderStories) – A number of global tyre companies have shown their interest in acquiring Indonesia’s tyre maker, PT Multistrada Arah Sarana Tbk (IDX: MASA), according to the sources close to the deal. Two global players French tire maker Michelin  and South Korea’s Hankook Tire among the investors name.

Since 2011, Hankook was attempted to buy Multistrada’s share but however it allegedly was unsuccessful amid the differences on the acquisition price. While, Micheline and PT Chandra Asri Petrochemical Tbk (IDX: CAPC) formed a joint venture company PT Synthetic Rubber Indonesia to take advantage of growing tire demand, both at home and in other Asian countries.

Last October, President Director of MASA Pieter Tanuri has bought 86.5 million shares of the company with a transaction value of Rp24.22 billion (US$16.47 million). The share purchase was carried out through PT Waterfront Sekuritas Indonesia with an implementation price of Rp280 a share.

“The purpose of this transaction is to repurchase it,” he explained in an information disclosure on Oct. 22. With the transaction, Tanuri’s share ownership in MASA increased to 1.89 billion shares from the previous 1.8 billion shares.

From the beginning of 2018, the price of MASA’s shares rose 101.79 percent, but the director Ade Bunian Moniaga, in the official statement to the Indonesia Stock Exchange on Oct. 9, said that he was not aware of any information or material facts that would affect the movement of shares.

The company is optimistic that sales up to the end of 2018 can grow above 10 percent along with the increase in export market penetration. The contribution of export sales its expected reaches 70 percent of the company’s total sales.

A number of MASA market areas are the United States, Japan, European Union, South Korea, Australia and the Middle East. The company aimed to open new markets to Eastern Europe. Potential products marketed are tires for winter and summer tires.

In addition to export penetration, the company also boosts domestic sales by making a solid tire. This type of tire is usually used for heavy equipment and its needs are still met by imports.

To spur MASA’s performance, it also focuses on increasing utility so that it hoists production volumes. It is expected that motorbike utilization this year will go up to 90 percent from 85 percent previously, and car tires to 80 percent from 75 percent previously.

Multistrada produces passenger car radials, motorcycle tyres, truck and bus radials and solid tyres. Last year the company manufactured 7.61 million PCR and 5.15 million motorcycle tyres, as well as 70,880 TBR and 9,630 solid tyres.

Its two tyre brands are Corsa, its motorcycle tyre brand, and Achilles; the tyre maker also manufactures off-take tyres for other companies, including motorcycle tyres for Michelin under a memorandum of understanding signed last year.

Judging from the first semester 2018 financial report, MASA’s sales reached $153.07 million, up 19.3 percent from the same period last year which was US $ 128.39 million.

At the same period, MASA obtained a net profit of $506,559. In the same period last year, the issuer lost $2.34 million.

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