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May 26, 2006 02:00 AM

Michelin to build tread rubber factory in Mexico

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    QUERETARO, Mexico-Michelin North America Inc. said it will build a $40 million tread rubber plant in Queretaro, adjacent to its Mexico headquarters and passenger tire plant, to meeting growing demand for retreads.

    Construction will begin immediately, a company spokesman said, and when completed in spring 2007 the plant will employ up to 120. It will produce tread rubber for the truck tire retread market in North America.

    "Demand for Michelin retreads in North America is exploding ," said Luc Minguet, chief operating officer of Michelin Americas Truck Tires. "Innovative retreads make a difference in the market. Demand is growing by half a million treads a year and our franchisees plan to open 15 retreading plants this year. This new tread pressing facility is key to support our growth not only in Mexico but in North America."

    Tread rubber for the Mexican market, where there are 12 franchised retread plants operating, is produced at the company´s tread rubber plant in Covington, Ga., the spokesman said. Michelin is spending $15 million to double capacity for tread rubber at that plant to meet the needs of Michigan Retread Technologies´ franchisees and retread plants throughout North America, it said.

    In the first quarter alone, Michelin´s retread business in Mexico rose more than 85 percent above a year earlier, said Eduardo Bernes, director of Michelin Truck Tires Mexico. He said the firm has gained more than 2 points of market share in North America so far this year.

    The growth of the company´s retread business continues to be matched by strong demand for its new truck tires, the firm said.

    Michelin´s commercial tire business in North America continues to outperform expectations, the company said. That has led to an increase in manufacturing investments, including $80 million to add capacity for X One "super single" truck tires at its factory in Waterville, Canada; $60 million to expand X One and other tire production in Spartanburg, S.C.; and $80 million to boost capacity for semi-finished rubber at its Anderson, S.C., plant.

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