LEXINGTON, S.C.—Michelin is expanding the capacity of its Lexington earthmover facility by 50 percent during the next five years to meet growing demand within the mining industry.
The $85 million project includes the addition of new equipment—including several curing presses—to help produce large surface mining tires and 70 jobs by 2010. Preparation work for the project is under way, and the new employees will be phased in as the equipment is brought on line.
Michelin´s Lexington earthmover tire plant began full production in 1998, spans about 500,000 square feet and employs about 260. The amount of square footage being allotted for the expansion has not yet been determined, a company spokeswoman said.
The facility will begin producing tires using the additional capacity within 18-20 months, said John Funke, director of marketing, earthmover tires, for Michelin North America Inc. The project primarily will increase production of Michelin-brand 57- to 63-inch radial earthmover tires, though the factory manufactures tires in the 45- to 63-inch range.
The tire models made in Lexington fit on rigid haul trucks, loaders, motor graders, rigid dumpers, bottom dump trucks, bulldozers, forklifts and logging transports.
The 50-percent increase in production capacity is "crucial to the growing supply needs of our earthmover customers," said Jim Micali, chairman and president of Michelin North America Inc. Micali and other company officials unveiled the expansion plans at a Dec. 14 news conference held at the Lexington facility.
The investment will position the company to quickly respond to growth and demand in the large mining tire market, he said. "As global raw materials become scarcer, the mining industry continues to increase productivity—and that´s good business for everyone," he said.
A second expansion phase, if necessary, would be implemented in the future to further increase the plant´s curing capacity. The additional phase is contingent on continued growth in the market, Michelin said.
The earthmover equipment market has increased by 30 percent over the past two years, said Dave Cionek, Michelin vice president of marketing and sales for earthmover tires. Growing worldwide demand for coals and metals has pushed the mining industry to increase its efforts and, as a result, has led to an increasing demand for the company´s large mining tires, he said.
Michelin´s global mining tire segment is growing at a 9-percent annual clip, the company said.
The current worldwide capacity to meet the demand of coal, metals and other natural resources is inadequate, and few new mines have opened recently, though more are planned for 2006, Funke said. Every tire that will be made in the Lexington facility "already has a customer´s name on it," he said.
The capacity boost will support North American and global markets, Cionek said, with about 45 percent of the products produced at the Lexington plant exported. Micali said that export rate is the highest of any of Michelin´s North American tire plants.
Earlier this year, Michelin announced it will build a $550 million earthmover tire plant in Campo Grande, Brazil, for the production of 25- to 49-inch tires. The facility will begin manufacturing in the second half of 2007, with an initial capacity of 40,000 tons per year and the capability to expand to 55,000 tons.
The projects in South Carolina and Brazil—along with added capacity to its tire factory in Vitorio, Spain—will increase Michelin´s global earthmover tire production by 34 percent over the next three years, Cionek said. The company´s goal is to expand its market share by 30 percent globally following its capacity boosts, the Michelin spokeswoman said.
Micali said the project continues Michelin´s "investment in the future of manufacturing" in North America, the state of South Carolina and the Lexington community. Michelin North America is headquartered in Greenville, S.C., and has made more than $2.28 billion in capital investments in the state over the past 20 years, the company said.
Michelin also employs more than 7,600 and runs eight factories, a research and development center, and a test track in South Carolina.