Michelin views rising NR price as an R&D challenge

Paris - Michelin faces continued pressure on earnings from rising raw material costs, but CEO Michel Rollier views the challenge as a chance for innovative companies like Michelin to tackle the dilemma internally through cost-control measures and research and development.

Rollier, who took over the sole CEO two weeks ago following the death of Edouard Michelin, made his comments to journalists attending the company's Challenge Bibendum forum for - sustainable mobility.

"Our world is ruled by expensive commodities," said Rollier, who acknowledged Michelin was, "very surprised" by rising NR prices. He said NR accounts for about 25 percent of the firm's commodities costs and the firm's R&D is working constantly on ways to improve the company's ability to substitute synthetic rubber for natural where possible.

Rollier ruled out Michelin's expanding its natural rubber holdings in light of the NR price situation. He said Michelin obtains only about 4 percent of its annual NR needs from its own plantations in Brazil and Thailand but added that the knowledge it gains from harvesting rubber on its own proves valuable in dealing with independent suppliers of NR.

Rollier also assured the public that he's in charge, that Michelin will follow the strategy developed under Edouard Michelin's guidance, and that Challenge Bibendum would continue, although the company did not announce when or where the next one would take place.

From Rubber & Plastics News (A Crain publication)