Dwory Supplying Polish Rubber to Michelin

Companies sign seven-year £200 million contract
On 5 October 2007 Dwory S.A. signed a licence agreement with Michelin for poly-butadiene rubber production technology. At the same time the two companies signed a trade contract supplying the rubber to Michelin for a minimum period of 7 years from the start of production. The value of the trade contract is estimated to be over £200 million.

Under the agreement some of Dwory’s production is going to be supplied directly to Michelin plants. The rest is to be sold by Dwory on the market under its own brand. The completion of the project is also expected to result in better utilization of the company’s general infrastructure and lead to further reductions in fixed costs.

The licence agreement grants the company the right to produce poly-butadiene rubber using a neodymium catalyst in annual quantities of 80 tonnes and provides for the transfer of any technical documentation necessary to design and construct a production line. Production of poly-butadiene rubber will be launched in 2011. As a result of the investment project Dwory’s product range is expected to significantly increase and the company’s share of the tyre industry rubber market, which is Dwory’s core business area, will also swell.

Michelin currently operates a similar arrangement to the proposed Polish set-up in Bordeaux. According to the companies, the production technology used by Michelin at Bordeaux is “the latest achievement of French engineering.” By acquiring the new licence, Dwory says it is set to become a producer of the latest third generation rubber.

Poly-butadiene rubber produced using the neodymium (PBR Nd rubber) technology purchased from the Michelin company represents the latest generation of rubber used in the production of tyres. This rubber is used mainly to manufacture high-quality tyres with improved safety specifications including tyres for top-of-the-range cars and higher speeds. The rubber is said to show excellent resistance to dynamic loads combined with high abrasion resistance. These characteristics result in longer tyre lifetimes and a significant reduction in rolling resistance contributing to lower fuel consumption.