Indonesia tyre-makers see flat 2009 output

JAKARTA Jan 12 (Reuters) - Indonesia's car tyre production may be weaker than initially expected in 2009 as global economic weakness cools demand for automobiles, a senior industry official said on Monday.

Car tyre production this year may stay unchanged at 41 million units from 2008, A. Aziz Pane, chairman of the Indonesian Tyre Producers Association (APBI), told reporters.

"Initially, we expected car tyre production to hit 45 million units but after the financial crisis demand is slowing," Pane said, adding that a recovery should occur by the end of this year.

The association's members include PT Good Year Indonesia (GDYR.JK).

Carmakers around the world have slowed production since the global financial crisis, hammering demand for raw materials.

Indonesia exports about 80 percent of its car tyre production to more than 150 countries, mostly in the Middle East and Africa.

Pane also said automakers may use more natural rubber as prices have been lower.

"We now use 55 percent natural rubber in the tyre producing process and the rest is synthetic rubber. But the share for natural rubber may increase to help support the farmers," he said.

Tokyo rubber futures ended 2008 down 56 percent, the biggest annual decline ever on worries about a slump in demand.

Most active Tokyo Commodity Exchange <0#JRU:> rubber contract for June delivery settled at 149.7 yen ($1.64) per kg on Friday. Tokyo markets were closed on Monday for a public holiday.

(Reporting by Fitri Wulandari; Editing by Kim Coghill)