CEO of PT Chandra Asri Petrochemical Tbk. (IDX:TPIA), Prayogo Pangestu, stated that the company plans to start the construction of its joint venture with tire maker Michelin & Cie (ML) in November.
The new plant, which will manufacture synthetic rubber, is slated to start operating in 2016. It will be located in Cilegon, Banten.
According to Pangestu, the whole plan will involve two stages: First stage requires $500 million investment in setting up the plant and procuring the raw materials. The second stage also requires a $500 million investment to manufacture automotive tires.
In their earlier announcement, both partners said that the total investment for this venture will require $435 million investment. Michelin will control 55 percent of the venture and TPIA will own the remaining 45 percent.
The French tire manufacturer plans to raise tire production in Asian markets to fulfill increasing demands for cars and light trucks in the region.