Michelin to invest $750M in South Carolina OTR tyre plants - updated

ERJ staff report (DS)

Greenville, South Carolina -- Michelin

North America Inc. (MNA) will invest $750 million in South Carolina

to build a second OTR tyre plant and expand its existing OTR tyre

plant in Lexington.

The new plant will be built on land near Starr, in Anderson

County, to the southwest of Greenville South Carolina. Michelin already has a

rubber compounding/calendering plant there and hundreds of acres of

land on which to build.

Michelin did not disclose the size or capacity of the new plant or

the size of the expansion at the Lexington plant, where the company

has been making OTR tyres since 1997. It invested $85 million in

2005-09 to boost capacity there.

Michelin did not disclose the timetable for the project.

Speaking at a press conference in Greenville this morning, MNA

Chairman and President Pete Selleck said there is “unprecedented

demand” for Michelin earthmover tyres throughout the world, and

called the decision to invest in South Carolina a “tribute to the

productivity of our employees and the pro-business environment in

South Carolina….”

The two projects together will create up to 500 jobs, boosting

Michelin's employment in the Palmetto State to more than 8,000.

“Michelin intends to maintain and strengthen its leadership in

all its speciality businesses, especially earthmover radial tyres,”

said Jean-Dominique Senard, managing general partner of Michelin, who

noted the global market for earthmover tyres grew by more than 20

percent from 2009 to 2011.

“This new facility will help us meet sustained demand while also

attaining our growth objectives for 2015,” he said. Mr. Selleck

added: “Nearly every earthmover tyre is sold before it is

produced.”

Michelin operates six other earthmover tyre plants globally:

Waterville, Nova Scotia; Campo Grande, Brazil; Le Puy and

Montceau-les-Mines, France; Vitoria, Spain; and Zalau, Romania.

South Carolina Gov. Nikki Haley called Michelin “one of our

finest corporate citizens” that has been “part of the economic

and social fabric” of the state for decades.

Speculation about the expansion surfaced in February when it came

to light that officials in Anderson County-where Michelin has two

rubber-mixing/calendering facilities and more than 900 employees-were

pitching the tyre maker with an investment incentive package known as

“Project Cougar.”

The package would provide tax relief and other incentives for

creating at least 125 jobs and investing a minimum of $150 million,

according to descriptions of the program. The incentives scale up

with greater investment and more jobs.

At that time the tyre maker declined to comment on its plans,

saying: “Incentives such as those being considered by Anderson

County pave the way for the potential of future investments down the

road. While Michelin routinely considers a variety of business

opportunities, we have nothing to announce at this time.”

Since then South Carolina media have reported on a number of other

state and local agencies coming forward with investment incentive

packages of their own.

The investment further cements Michelin's presence in South

Carolina, where it operates four tyre plants, the two rubber

mixing/calendering units, its headquarters, a

research-and-development campus and a test track in South Carolina,

employing more than 7,700 in the state.

Overall, MNA has 18 plants in 16 locations throughout the

continent, employing 22,270 and generating $7.25 billion in annual

sales, according to company information.

In 2007 Michelin had budgeted $740 million for a car/light truck

tyre plant in Mexico to be built in 2008-10, but later it canceled

the project in the wake of the global economic slowdown.

Capacity expansion projects of the past decade in South Carolina

include:

• $200 million through early 2013 at its passenger/light truck tyre plant in Lexington, S.C., to boost capacity, primarily for larger diameter performance tyres for SUVs and crossovers;

• $90 million during 2008-09 to upgrade equipment and expand production capacity at its Lexington passenger and off-the-road tyre operations;

• $110 million in 2007-10 to upgrade and expand its passenger/light truck and OTR tyre plants in Lexington;

• $240 million in 2007-10 for increase capacity of semi-finished materials at plants in Sandy Springs and Starr and to add capacity for X One wide-base truck tyres and military tyres in Spartanburg County;

• $85 million in 2005-2010 to boost earthmover tyre capacity at Lexington; and

• $80 million in 2005-07 to upgrade equipment and expand capacity at rubber materials plants in Starr and Sandy Springs.

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Press release from Michelin (French language)

Above story auto-translated (from French language)

Press release from EU (English language)

Press release from North America (English language))