PARIS—Groupe Michelin has committed nearly $550 million to build an earthmover tire plant in Brazil and expand car and light truck tire capacity at factories in Poland and Scotland.
Michelin also has bid an undisclosed amount to buy Egyptian tire maker Transport & Engineering Co.—known as Trenco—from the Egyptian government.
In Brazil, Michelin will spend about $200 million through mid-2007 to build a facility for earthmover tires to serve customers in South and North America.
The plant, due on stream by the second half of 2007, is part of a worldwide capacity expansion program Michelin has under way in response to a global shortage of off-the-road tires spurred on by "unprecedented growth" of the surface mining industry.
The factory will be built in Campo Grande, on a plot of land adjacent to Michelin´s existing medium/heavy truck tire operation. The facility initially will have annual capacity of 40,000 metric tons, rising eventually to 55,000 tons, Michelin said, and employ up to 400. The plant will be capable of producing tires with rim diameters of 25 to 49 inches.
The operation will supplement expansions under way at Michelin factories in Lexington, S.C., and Vitoria, Spain.
In Poland, Michelin will invest nearly $330 million over three years to expand its Stomil Olsztyn S.A. facility in Olsztyn.
The project will raise annual capacity by about 3 million tires, Michelin said, with the first output from the addition scheduled for March. Ultimately the expansion will add 520 jobs to the staff of 2,300 at the 37-year-old factory, which makes passenger, light truck, medium truck, bus, farm and industrial tires.
Michelin had been considering this expansion for either Olsztyn or its facility in Nyiregyhaza, Hungary, according to news reports.
The expansion of Michelin Tyres U.K. Ltd.´s Dundee, Scotland, plant is less extensive, at about $7.5 million, but will raise capacity by about 20 percent while also reducing the cost of manufacturing.
By the time the project is complete in 2007, annual capacity will have been boosted to more than 9 million units from 7.6 million, company officials said. Work began recently on the $2.3 million first phase, which involves rearranging the workflow to improve flexibility and efficiency, a spokesman said.
In Egypt, Michelin confirmed its interest in Trenco, but declined to comment on specifics until the deal is completed. Trenco makes Nisr-brand bias and radial tires and tubes for cars, light and medium trucks, motorcycles and bicycles.