DHL and PT Synthetic Rubber Indonesia, a joint venture between the Michelin Group and local partner Chandra Asri Petrochemical, have entered into an agreement under which PT SRI will consolidate its plant-to-port supply chain under a single DHL solution for increasing volumes of synthetic rubber used in modern tyre production.

According to DHL, it will oversee all road freight transportation, warehousing and customs clearance of synthetic rubber between the PT SRI plant in Cilegon in West Java to Tanjung Priok port in North Jakarta, with a particular focus on quality and safety. The end-to-end solution will support PT SRI exports to all Michelin plants globally. To ensure uninterrupted high-volume delivery, PT SRI worked closely with DHL to address all local shipping regulations and requirements during the construction of the Cilegon plant.

“Global consumption of raw materials for tyres increased more than 20% from 45.2 billion tons from 2017 to 54.5 billion in 2018, raising both the market opportunities and pressure on materials producers to deliver to demand,” said Vincent Yong, president director of DHL Global Forwarding Indonesia. “DHL’s end-to-end solution gives PT SRI the foundation to flexibly scale operations to meet growing future international and domestic demand as it continues to increase.”

The solution for PT SRI includes shuttle transportation from the Cilegon plant to DHL’s warehouse, warehouse management activities, the 125km journey to the port, export and import activities including customs clearance, as well as managing third party contracted carriers for outbound shipments. DHL is also responsible for the timely shipment of rubber samples from Indonesia to global Michelin plants.

“Several other affiliates of the Michelin Group have already outsourced the storage and transport activities to DHL,” said Jan Blaauw, chief financial officer of PT SRI. “Since DHL offers the same services locally, we aligned on this partnership between Michelin and DHL and extended it to Indonesia. With DHL’s industry-specific expertise, its global network and its extensive knowledge of the Indonesia logistics industry, we were confident that the DHL solution would meet PT Synthetic Rubber Indonesia’s stringent compliance and quality requirements, even as demand volumes continue to accelerate and grow.”

As Indonesia’s automotive manufacturing industry continues to grow, the partnership could also extend to include transportation of synthetic rubber to customers domestically.

“As the global auto-mobility supply chain continues to grow in complexity, it's more vital than ever for companies to work with their logistics partners,” said Jan Willem Winkelhuijzen, managing director of DHL Supply Chain Indonesia. “Together they should ensure upstream supply chains remain flexible enough to minimize complexity and optimize current production while also remaining adaptable enough to meet future spikes in demand.”