Technical Rules for Importing Tires Published, Heavy Equipment Businessmen Get Fresh Air

 

Technical Rules for Importing Tires Published, Heavy Equipment Businessmen Get Fresh Air

 Heavy equipment business people can now breathe a sigh of relief. This is because the government has started to relax tire imports for the heavy equipment industry.

As is known, recently the Ministry of Industry (Kemenperin) issued Minister of Industry Regulation (Permenperin) No. 10 of 2024 concerning Procedures for Issuing Technical Regulations (Pertek) and Recommendations for Importing Tires.

This is a technical policy from the Minister of Trade Regulation (Permendag) 36/2023 concerning Import Policies and Regulations which has been amended twice.

There are 33 tariff posts related to various tire products listed in the regulation and require Pertek and recommendations from the Ministry of Industry for import activities.

General Chair of the Indonesian Heavy Equipment Industry Association (Hinabi) Giri Kus Anggoro said that this new policy is expected to expedite the process of importing tires for heavy equipment so as to revive the industry.

Previously, the supply of heavy equipment tires had been hampered since last year because importers had difficulty obtaining General Import Identification Numbers (API-U), one of the conditions of which was the publication of a Commodity Balance Sheet from the Ministry of Industry.

Giri also said that the average need for tire imports for the heavy equipment industry is around 4,000-5,000 psc per year or the equivalent of IDR 70 billion-IDR 80 billion. So far, the majority of heavy equipment tires still have to be imported.

With the ease of importing tires, Hinabi is confident that heavy equipment production and sales trends will improve in the remainder of this year. Moreover, demand for heavy equipment from the mining sector has begun to recover, especially from nickel mines. "National heavy equipment production this year is still according to plan, namely 8,000 units," said Giri, Tuesday (14/5).

Until the first quarter of 2024, national heavy equipment production fell 23% year on year (YoY) to 1,668 units. Hydraulic excavators are the most widely produced heavy equipment, namely 1,427 units. After that, followed by 141 dump trucks and 120 bulldozers.

Tire import budget

PT Intraco Penta Tbk (INTA) Corporate Secretary Astri Duhita Sari admitted that her party has had difficulty importing tires since the first semester of 2023 due to the effects of government regulations regarding the import of commodity goods. In fact, INTA needs tire imports to support customers in the mining sector such as coal, nickel and gold.

The relaxation of tire imports will certainly help INTA in assisting the needs of customers in the mining sector in carrying out production. "Tires are consumable goods and contribute the second largest cost after fuel in the mining sector," said Astri, Tuesday (14/5).

INTA management has budgeted around US$ 18 million in 2024 to spend on imported tires. INTA's tire import needs continue to increase with an average volume of around 40,000-50,000 psc per year. This figure includes imports of radial tires around 20,000 psc per year.

Meanwhile, PT United Tractors Tbk (UNTR) claims that it is not directly affected by the government's policy of relaxing imports of heavy equipment tires. This is because UNTR receives a complete or complete supply of heavy equipment from the factory and then distributes it to customers.

"To replace tires, customers or heavy equipment owners usually place orders directly from the tire dealer," explained United Tractors Corporate Secretary Sara K. Loebis, Tuesday (14/5).