Shanghai Tyre to invest in Michelin Venture

The AFX news agency has reported that Shanghai Tyre and Rubber Company has approved two separate investments totalling 263.55 million yuan (£17.2 million), to be put into a subsidiary and its current joint venture with Michelin.

According to the agency, Shanghai Tyre said it would invest 85.47 million yuan (£5.6 million) in Shanghai Michelin Warrior Tire Co, a joint venture it operates with Cie Generale des Etablissements Michelin SA. According to the company the money would be earmarked for the acquisition of new equipment and increasing the venture’s working capital.

The news also reports that the Chinese tyre manufacturer said it would invest 178.08 million yuan (£11.66 million) in its subsidiary, Shanghai Rugao Tyre and Rubber Co Ltd, in a bid to increase the unit’s annual production capacity by an estimated 300,000 units.

Shanghai Tyre’s recent third quarter results show that its net profit for the first nine months rose 7.3 per cent year-on-year to 75.18 million yuan (£4.9 million). Earnings per share were 0.085 yuan for the nine-month period, up from 0.0788 a year earlier. As a company, Shanghai Tyre holds 28.49 per cent of Shanghai Michelin.