Michelin will work with Barito Pacific and invest up to US$400 million (Rp5.1 trillion). The plant’s construction is scheduled to start in 2016, with the goal to have it begin operations by 2019.
Both Michelin and Barito Pacific had also expressed their desire to develop rubber plantations in Jambi and West Kalimantan.
Michelin plans to establish a joint venture with Barito Pacific’s subsidiary, PT Chandra Asri Petrochemical Tbk.
Michelin’s plan is expected to help increase the absorption rate of rubber by Indonesian industries.
Right now, about 20 percent of the national rubber production is consumed by the tire industry; far below Malaysia, China and India’s; each absorbing more than 40 percent of their production.