Michelin and PT Gajah Tunggal Sign Co-operation Agreements

TIRES ONLINE - Michelin & PT Gajah Tunggal Tbk (GT) have announced the signing of business co-operation agreements focused on the manufacture of passenger car tyres for Michelin markets and distribution activities in Indonesia. Under the manufacturing agreement, GT will manufacture a selected range of Michelin Group's associated brands of car tyres (excluding the Michelin brand), including high speed rated tyres, for various markets served by Michelin. Michelin and GT have also, in this context, announced that Michelin has acquired 10% of GT share capital.

Under the distribution agreement, GT will distribute in Indonesia, through its extensive network, a selected range of Michelin Group's passenger car and light truck tyres, including Michelin and BFGoodrich brands, for the replacement market. This agreement will enhance GT's and Michelin's distribution and market positions in Indonesia. Both companies agree that the co-operation will have long term benefits for both Michelin and GT, and allow them to better serve the customer segments in their respective markets, through a richer brand and product offer.

The investment in Gajah Tunggal marks Michelin's third investment in Asian tyre manufacturers in recent years. The company already has similar co-operations and minority shareholding in Hankook Tire (Korea) and Apollo Tyres (India)

Firms join fight against HIV/AIDS

THE JAKARTA POST - Suwarni, not her real name, decided to resign from her company after her colleagues learned she was HIV-positive.

Her husband had died of an AIDS-related illness after infecting her. It was only Suwarni's son and her decision to become an activist that got her through the dark period that followed his death.

"Many people still don't know about HIV/AIDS. They often discriminate against people with HIV/AIDS," she said in her new office in South Jakarta.

She remembered how her colleagues, who were afraid of being infected, refused to share office facilities, such as telephones and toilets.
At that time (in the early 1990s) there was much fear, suspicion and superstition around the virus. Not many people here knew it could not be transmitted through skin contact.

As knowledge of HIV transmission improved, attitudes changed. But there are still people in the same position as Suwarni today.
Big companies are helping to raise awareness on HIV/AIDS, including the seven firms that recently established the Indonesian Business Coalition on AIDS (IBCA).

The coalition, which was formed by local companies Gajah Tunggal, Sinar Mas and Sintesa; and multinational firms Chevron, Unilever and British Petroleum, was officially launched Sunday by Vice President Jusuf Kalla.

"The coalition aims to promote awareness on HIV/AIDS to business communities. Conducting prevention programs costs less to the company, actually," Catharina Widjaja, Gajah Tunggal director for corporate communication affairs, said Monday.

Catharina said Gajah Tunggal -- one of the largest tire producers in the country -- had educated its 10,000 employees on HIV/AIDS since 2003.

According to a recent study by the International Organization for Migration (IOM), companies can save money and retain more employees by implementing HIV/AIDS programs in the workplace.

The research, which was conducted in mining companies in Zambia, calculated the costs of operating HIV workplace programs with the costs of HIV/AIDS to the company.

The study found that the programs reduced employee absenteeism, turnover rates and productivity loss, as well as helping employees handle discrimination and learn about prevention.

Catharina said the company, which was awarded by the International Labor Organization for their HIV/AIDS awareness in 2004, had also adopted guidelines on the right to privacy of individuals with HIV/AIDS

She said the company did not oblige its employees -- who are mostly aged between 20 and 40 -- to undergo HIV/AIDS tests.
"It's okay, if they undergo the tests voluntarily. We will keep it secret," Catharina said.

She said 95 percent of Gajah Tunggal's employees were men and 90 percent of them were sexually active adults -- the main targets of today's HIV/AIDS awareness campaigns.

She said education programs on the prevention of HIV/AIDS, including safe sex and the use of condoms, were very familiar to employees.
Similarly, Chevron, which formally launched a company global-wide campaign on HIV/AIDS in 2005, has adopted anti-discrimination and confidentiality policies.

"The HIV/AIDS status of an employee remains confidential. Employees with HIV/AIDS are treated just like any other employee," Chevron IndoAsia senior vice president Abdul Hamid Batubara said recently.

Batubara said the oil and gas company, which has 56,000 employees in 180 countries, does not require its workers to be tested for HIV.
He said the company had conducted several programs, such as employees' awareness campaigns and training for HIV/AIDS educators, and had also formed partnerships with local government bodies, non-governmental organizations (NGO) and the private sector in its operating areas in Kalimantan, Sumatra, East Java and Jakarta.

Last year, Chevron Indonesia received a Gold Award from the office of the coordinating minister of the people's welfare as a private company that had established and supported HIV/AIDS awareness programs in the workplace.

Earlier this year, Chevron's HIV/AIDS program was honored at the 6th Annual Global Business Coalition (GBC) Awards for business excellence at a gala dinner at the American Museum of Natural History in New York.

Coinciding with World AIDS Day on Saturday, the government launched National Condom Week in Senayan, Central Jakarta. The campaign is aimed at educating people on the use of condoms as an effective way to prevent the spread of HIV/AIDS.

The campaign, which is widely supported by NGOs as well as private companies, is considered good progress in HIV/AIDS prevention programs.

However, some 400 youngsters from radical organizations held a rally at the Hotel Indonesia traffic circle Saturday, protesting the promotion of condoms, which they link with sexual immorality.

Indonesia's Gajah Tunggal eyes 15 pct sales growth

REUTERS - Southeast Asia's biggest tyre-maker, PT Gajah Tunggal Tbk GJTL.JK, is aiming to boost its sales by 15 percent this year, supported by growing demand from foreign and domestic markets.

Marcello Taufik, Gajah Tunggal's corporte communications officer, declined to give specific numbers but said 2007 sales revenue had risen by around 20 percent from 5.47 trillion rupiah ($596.8 million) in 2006.

"We are targeting a 15 percent increase from our sales figure of 2007. Demand from the domestic motorcycle market is firm as well as the foreign market," Taufik told Reuters.

Tyre sales in Indonesia have been rising after the automotive sector staged a recovery following a fall in interest rates.

Analysts expect the company, 10 percent owned by French tyre-maker Michelin (MICP.PA: Quote, Profile, Research, Stock Buzz), to post sales revenue of 6.3 trillion rupiah in 2007, and 7.07 trillion this year.

Its 2007 net profit is estimated at 167.6 billion rupiah in and likely jump to 244.5 billion this year.

Taufik said the company plans to increase its daily car tyre production capacity to 35,000 units from 30,000 units last year.

The company, which is controlled by tycoon Sjamsul Nursalim, said it will also boost its motorcyle tyre production capacity by 33 percent to 60,000 pieces per day to meet growing demand.

Bear Stearns unit raises buyout fund

INTERNATIONAL HERALD TRIBUNE - The buyout unit of Bear Stearns raised a $2.7 billion fund to acquire financial-services, retail and consumer-goods companies, the bank said Wednesday.

The firm's Merchant Banking Partners III fund will seek to make equity investments of as much as $200 million. Fund-raising began last September, Bear Stearns said.$@ -Brett Cole

Lehman backs bonds of Indonesia tire maker

SINGAPORE:Lehman Brothers Holdings recommended Wednesday buying dollar-denominated bonds of Gajah Tunggal because profit margins at the top Indonesian tire company will increase by the end of the year.

A J.P. Morgan index of high-risk, or junk, Asian corporate bonds fell last week to the lowest level in July afterOcean Grand Holdings, which is listed in Hong Kong, filed for court protection from creditors.

Gajah Tunggal's 2010 bond was among those that suffered, and now offers investors good value, said Lehman's Annisa Lee. The bonds are rated B by Standard & Poor's, five rungs below investment grade.

"The market is going back up. You can see some buying," said Lee, a credit analyst for high-yield Asian company bonds, during an interview from Hong Kong.

"This company has relatively less risk than others with B ratings or double-digit yields," Lee added.

Gajah Tunggal plans to spend $170 million to build two new plants to meet rising overseas demand, with $70 million earmarked to almost triple its production capacity for motorcycle tires, the company said on Monday.