Michelin eyes truck, OTR tyre plant in India

Paris -- Group Michelin will expand passenger tyre capacity at its plant in Itatiaia, Brazil, and is in “advanced negotiations” in India to buy land for a truck and earthmover tyre plant, Managing Partner Michel Rollier told investors today at a conference in Paris.

 Rollier did not disclose the scope of or investment in the expansion in Brazil, other than to say it is being undertaken to meet replacement and original equipment demand in Brazil and throughout South America. The 9-year-old Itatiaia plant is rated at 5000 units a day.

Rollier did not elaborate on the proposed plant in India. However, Indian local press reported on 1 September that the Tamil Nadu government had cleared a project by Michelin to build a Rs 45 000 million ( Euro 690 million) tyre factory on the outskirts of Chennai. Michelin did not respond to requests for further clarification.

In his presentation - which coincided with the Paris Motor Show - Rollier said Michelin has reduced its operating costs in the past 18 months by more than $700 million by efficiency improvements in industrial operations, overhead, logistics, research and development and raw materials.

The cost-cutting measures are part of part of Michelin's Horizon 2010 strategic plan, which called for spending cuts of up to Euro 1700 million by 2010 compared with 2006. Meeting the Horizon 2010 goals will allow Michelin to improve profitability by then, he said, “entirely through internal initiatives.” Michelin's stated goal is a 10-percent operating margin.

Besides cutting costs as already outlined, Michelin projects reducing it workforce by as many as 30 000 jobs by 2012 through natural attrition and turnover.

Rollier also outlined Michelin's growth plans through 2012 for emerging markets, saying the company intends to double manufacturing capacity for passenger, light truck and specialty (earthmover, agricultural, aircraft, motorcycle, etc.) tyres and boost capacity for truck tyres 40 percent. Michelin defines emerging markets as Brazil, Russia, India and China.

From Tire Business (A Crain publication)

Press release from Michelin

Tamil Nadu clears projects worth Rs.96 bn ThaiIndian News (India)