Michelin to increase Tigar plant production by 50 per cent
Michelin Group has announced plans to increase its production of economy tyres at the firm’s Tigar Tyres subsidiary in Pirot Serbia by 50 per cent. Currently the tyre manufacturing operation is set to produce 8 million tyres in 2012 but, according to a memorandum of understanding with Serbian authorities and the City of Pirot, the Tigar Tyres which is 300 km southeast of Belgrade, will be producing 12 million tyres annually by the end of 2016. Overall, the project will represent an investment of 170 million euros for the period 2012-2016. This reportedly equates to the creation of 700 jobs in Pirot.
According to a statement on the matter, the plant will continue to produce “exclusively entry-level tyres” that are sold under the Tigar, Kormoran and Riken brands, all of which are in the Michelin Group brand portfolio. Work to expand the plant is expected to begin in early 2013 and the first tyres should roll off the new production lines in the middle of 2015. Most of the tyres produced will supply the fast-growing Russian and CIS markets, as well as markets in Central and Eastern Europe, Africa and the Middle East.
The news that Michelin is investing in its production of entry-level or so-called tier three products, follows a series of hints from senior executives that this was on the horizon. At the end of 2011 executive vice-president of Corporate Development Laurent Noual, for example, told journalists and investor’s gathered for the company’s investor’s day the tyre maker intends to expand in at least partly by building up a presence in tier three: “In the coming four years an additional 150 kilotonnes of production capacity will be added to Michelin plants around the world; 70 per cent of this will be in new markets, with greenfield projects accounting for most of this,” he explained.
The global Tier 3 market was estimated to be 38 per cent of the total in 2010 and at the time was expected to grow 26 per cent in the years to 2020. Company representatives are now pointing out that growth in this segment is likely to be even faster over the next 10 years when the segment is expected to grow by 30 per cent worldwide.
The memorandum of understanding was signed 2 April in the Tigar Tyres plant in Pirot. The event was attended by Boris Tadić, President of the Republic of Serbia, Nebojša Ćirić, Minister of the Economy, Vladan Vasić, Mayor of Pirot, and Eric Faidy, Chairman of the Board of Tigar Tyres.
A Michelin Group subsidiary since 2005 and wholly owned since 2009, as well as the entry level brands listed earlier, Tigar Tyres also manufactures Michelin-brand tyres for two-wheeled vehicles at the Pirot site and inner tubes at its facility in Babušnica. Tigar Tyres currently employs 2,000 people in Serbia.
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