Giti Tire to bring core values to Chester County
06/18/2014 7:41 PM
06/19/2014 7:23 AM
Julianto Djajadi put his hands together, creating a rectangle slightly bigger than one of his hands.
The rectangle represents where the rubber meets the road.
Djajadi, executive vice president for Giti Tire USA, quickly listed the factors affecting a tire’s design: It must support a vehicle’s weight and control its movement. It must operate in the hot and the cold and all weather conditions in between, and safety is the top consideration.
The rectangle also “represents the whole university,” said Djajadi (duh-ZHAW’-dee). He listed the different engineers needed to design a tire and then all the skills – from manufacturing to marketing – to turn the design into a product and to put a tire on the road.
Soon the rectangle will include workers in Chester County. Giti Tire is building its first U.S. plant between S.C. 9 and the Old Richburg Highway. The $560 million plant will be visible from Interstate 77.
Employment is expected to exceed 1,700 jobs. Output is expected to be 30,000 passenger and light truck tires a day or 5 million annually. Operations should begin by the first quarter of 2016.
Whether it’s an engineer or tire plant operator, Giti wants its employees to “put their passion into it,” Djajadi said. “We want them to work like an artist, they have to be proud of what they are doing.”
Employee pride and a philosophy of conserving and giving back to the environment are the core values of Giti, he said. The company has invested $1 million in reforesting projects in Indonesia and China and helped fund more than 10,000 operations in China to remove cataracts from the eyes of its people.
The family-owned company started in 1951 making bicycle tires and inner tubes in Indonesia. In 1981, the company began making passenger and commercial tires.
In 1993, it opened its first tire plant in China. Giti now has seven tire plants in China, making 140,700 tires a day and employing 19,000. It also owns almost 50 percent of Gajah Tunggal tire company in Indonesia. The combined output of the Chinese and Indonesian plants makes Giti the 10th largest tire company by production volume.
The company has provided tires to automotive makers and to the resale market. Fiat-Chrysler and General Motors have each honored Giti as a supplier of the year multiple times.
The company has sold tires in the U.S. for more than 20 years under the brands of GT Radial, Primewell, Dextero and Runway at retailers such as Wal-Mart and Firestone tire stores.
Its expansion in the U.S. market has been swift. Giti Tire opened its U.S. headquarters and distribution center in Rancho Cucamonga, Calif., in 2005. In 2011, it opened its eastern distribution center in Tennessee, but has since split that center into operations in Georgia and Texas.
In 2013, it opened a research and development center in the heartland of tires, Akron, Ohio.
“They’ve done the right things to connect to the U.S. markets,” said Bruce Davis, who follows the tire industry for several Crain Communications business publications.
Giti is just one of a number of tire companies building in the South. Between $3 billion and $4 billion is being invested in new plants or expansions, Davis said.
Five of Giti’s competitors are expanding in the South: Continental in Sumter, Hankook in Clarksville, Tenn.; Yokohama in West Point, Miss.; Toyo in White, Ga.; and Kumho in Macon, Ga. Goodyear recently announced it will build a new plant in the “Americas,” but has not started site selection yet.
The expansion comes as U.S. tire sales are expected to start growing, possibly as much as 8 percent next year, according to some analysts.
The expansion also comes as imports of tires made in China are expected to continue to rise. Three years of increased U.S. tariffs on Chinese-made tires ended in September 2013.
The increased tariffs – from 4 percent to as high as 39 percent – made it difficult for companies such as Giti, Djajadi said. But the decision to build in the United States, Djajadi said, was made six years ago, before the tariffs increased. The tariffs did however, force Giti to look at its commitments to its markets, Djajadi said.
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