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Jakarta Post

Multistrada seeks better margins in US, Europe markets

Anton Hermansyah (The Jakarta Post)
Jakarta
Fri, June 10, 2016 Published on Jun. 9, 2016 Published on 2016-06-09T20:58:58+07:00

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Multistrada seeks better margins in US, Europe markets A worker inspects a finished tire at Multistrada Arah Sarana's factory. (Kontan/Cheppy A. Muchlis)

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ublicly listed tire producer Multistrada Arah Sarana hopes for a better margin in the US and European markets, looking for the two markets to contribute 10 percent and 7 percent, respectively, of its sales.

According to Multistrada marketing director Uthan M. Arief Sadikin, the European market bears good margins. In a bid to increase  market penetration, the company established Multistrada Europe GmbH in Germany in July 2015 after announcing sponsorship of Paris Saint Germain football club in May.

"As for the US market, it offers a good margin in the SUV [sport utility vehicle] tire segment. We began direct exports to the US in January. Moreover, the US protectionist measures against Chinese products open up an opportunity for us," he told thejakartapost.com in Jakarta on Thursday.

The global market has in recent times been oversupplied by Chinese products, leading to a plunge in global tire prices. Exporting 70 percent of its products, Multistrada's performance was badly hit, recording net losses since 2015.

In the first quarter of 2016, Multistrada suffered net losses of US$1.32 million.

"Despite the raw material prices decreasing in line with lower commodity prices, our margins  have still been squeezed, as selling prices have decreased even faster," said Multistrada vice president director Henry Komala. (ags)

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