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Southeast Asia's biggest tyre maker PT Gajah Tunggal expects its production to rise by up to 15 percent in 2012 as demand from Europe and Middle East increases and buyers want more second-tier tyres, a company director said on Tuesday.

Company director Catharina Widjaja said the euro zone crisis has led European buyers to buy cheaper tyres from the company instead of high-quality tyres from other major producers.

The company, which controlled by one of Indonesia's richest business group Nursalim family, produced 35 million tyres in 2011.

"Forty percent of our production is for export, and we haven't seen any decline in demand," Widjaja said, adding that the company expects revenue to rise by 10 to 15 percent this year, while the rubber price continues to be lower.

Widjaja said it bought rubber at an average of $3 per kg so far this year, a 40 percent decline from $5 per kg in 2011.


(Reporting by Fathiya Dahrul, editing by Jane Baird)

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