PARIS (Feb. 23, 2011)—Michelin is planning to hike capital expenditures 60 percent this year to nearly $2.2 billion.
The spending is part of the firm's goal to boost its global capacity by more than 20 million units annually by 2014 and position the company to grow by 50 percent by 2020, Michelin said.
Michelin's three major capacity expansions—at Itatiai, Brazil, Chennai, India, and Shanghai, China—are all on target for production start-up during 2012, Michelin Managing Partner Jean-Dominique Senard told journalists and analysts at the firm's fiscal 2010 financial results press conference in Paris recently.
Michelin has budgeted nearly $3 billion over five years for these projects.
Michelin is targeting unit sales growth of 6.5 percent in 2011 after pumping up unit sales last year by 13.4 percent.
In addition to the aforementioned projects, Michelin expects to increase its productivity 30 percent by 2015 through continuous efficiency improvements and capacity investments, Senard said.
Michelin plans to achieve its 50-percent growth target by doubling its sales volumes by 2020 in what it terms new markets to go with 25-percent growth in mature markets.
Michelin claims to have increased its annual output per worker 35 percent since 2006 to 135 metric tons of output.
Capital spending of $2.2 billion would represent nearly 9 percent of sales.