Michelin targets Kenya, Uganda with new venture

Paris — Groupe Michelin has established minority-owned joint venture with a French company active in car sales in Africa and Asia to handle the import and distribution of Michelin tires in Kenya and Uganda.

The new venture, 49% owned by Michelin, is with CFAO Automotive, a Paris-based company with 133 sales and service locations in 34 African countries, three French overseas territories in the Pacific and Vietnam and Cambodia.

The new entity will provide the two countries, whose population numbers over 90 million, with tires for cars, vans and light trucks, Michelin said. The venture also will import tires for heavy goods, two-wheel, civil engineering and agricultural vehicles.

Michelin said it wants to accelerate the distribution of its high-end tires in these regional African powerhouse countries, where the venture will rely on Michelin's long-standing distribution partners.

"The growth prospects of the African continent are immense," said Yves Chapot, a member of Michelin's executive committee and director of automotive business lines and the Asia, Africa, India and Middle East regions.

"We want to offer Kenyan and Ugandan motorists and businesses the best of our technologies to sustainably support their mobility. It is with this ambition in mind that we are working with CFAO, whose expertise and commercial footprint on the continent will be two of the levers for the success of this partnership serving our East African customers."

Chapot did not elaborate on the size of the markets nor quantify Michelin's revenue expectations for the venture.

CFAO Chairman and CEO Richard Bielle pegged the economic growth rates for Uganda and Kenya at 4.5 % and 5.5%, respectively, calling the markets "very dynamic."

"As a result," he said, "they are of interest to the biggest players in the global industry. CFAO's alliance with Michelin illustrates our know-how on the continent — providing our partners with immediate solutions to develop markets and to offer consumers high quality products and services."