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talian tire maker Pirelli has secured approval to build a US$126 million plant in Indonesia, Investment Coordinating Board (BKPM) chairman Chatib Basri said on Thursday.

 Pirelli signed a deal last year with component maker PT Astra Otoparts to construct its first plant in Indonesia aimed at producing motorcycle tires for local and ASEAN markets. Construction is expected to begin later this year, with production slated for 2013 and full operation in 2016. The plant is expected to have an annual production capacity of 7 million motorcycle tires, Astra Otoparts said in a statement.

“July [investment] figures are relatively okay. What we need to be careful of is [investment figures] in the fourth quarter or in 2013,” Chatib told a press briefing, citing interests from South American companies to invest in the salt, food, livestock and bus transportation industries.

Realized foreign direct investment (FDI) in Indonesia reached its highest-ever level for a first quarter, Rp 51.5 trillion (US$5.46 billion), up 30 percent over the same period in 2011. Overall investment soared 33 percent to
Rp 71.2 trillion in the first three months of this year from a year ago.