Updated: Michelin investing $220 million in Nova Scotia tire plants

BRIDGEWATER, Nova Scotia—Sustainability remains central to Michelin's growth mission. And it's proving that with its latest round of North American investments.

Michelin North America Inc. said March 14 it is investing nearly $220 million ($300 million CAD) in its Canadian operations over the next three years. The move is intended to not only meet sustainable mobility market demands, but ensure its operations meet Michelin's long-term sustainability targets.

Specifically, Michelin is making room for the kinds of tires that support North American market trends—namely EVs, larger rim diameter tires and tires designed for fuel efficiency.

"Michelin is committed to developing the mobility of goods and people and doing so in a cleaner and more sustainable way," Alexis Garcin, Michelin North America president and CEO, said in a statement. "With these investments, we will do exactly that: continue to add capacity in the most strategic segments of the tire market to support the transition to electric vehicles and to energy efficient freight transportation, while further reducing the environmental footprint of our products and our plants."

The largest portion of the $220 million investment in equipment and technological upgrades—about $102.5 million ($140 million CAD)—will go toward the Bridgewater plant, which has an annual capacity for about 60,000 tons of passenger and light truck tires, according to the latest Rubber News data. Michelin also anticipates adding 70 positions at the facility where it currently employs around 1,150.

Michelin also stands to benefit from the province’s newly increased Capital Investment Tax Credit, which could represent tax savings of nearly $50 million ($61.3 million CAD) over five years, based on the planned investment.

The Capital Investment Tax Credit is a refundable corporate income tax credit for capital costs of new equipment used primarily in manufacturing or processing goods for sale or lease, farming or fishing, logging, storing grain or harvesting peat.

Michelin operates three plants in Nova Scotia. It has facilities in Bridgewater and Granton-Pictou, which also manufactures P/LT tires. The Granton-Pictou plant, opened in 1971, has capacity for about 9,000 tons per year, according to Rubber News data.

The plant in Waterville is dedicated to truck/bus tires and has an annual capacity of around 137,500 tons per year. That facility, opened in 1982, employs about 1,280.

"We're excited to continue to enhance and grow our operations in Canada," Andrew Mutch, president of Michelin North America (Canada) Inc. "We have a wonderful history of manufacturing tires here for more than 50 years, and I'm thrilled we can strengthen the competitiveness of our factories for our current and future work force."

Among Michelin’s most recent North American investments were a $75 million commitment to its commercial truck facilities in Waterville and Spartansburg, S.C. Garcin told Rubber News last year that the company also increased manufacturing at its Shawinigan, Quebec, plant.

Investments in North American operations are critical for Michelin, because North America is cornerstone for growth.

Michelin, according to Tire Business' most recent Tire Market Data Book, holds the largest share of the North American tire market, accounting for about 19.6 percent overall. It is followed by Bridgestone and Goodyear, who have 19.4 percent and 17.5 percent of the market share, respectively.

That is a position that Michelin looks to keep and expand.

During its full year financial results presentation last month, Michelin noted that North and Central America account for 35 percent of the group’s overall sales.

And when it comes to tires specifically, Michelin is seeing growth on both the P/LT and commercial tire sides.

With commercial tires, sales were up year-over-year in North and Central America where the tire maker saw OE truck tire demand rise 10 percent, right along with replacement truck tire demand, which grew 13 percent.

Across North and Central America in 2022, Michelin saw a 10-percent uptick in original equipment sales year-over-year. And, while it did see a dip in replacement tire sales (-4 percent), the potential for growth in that area remains.

Michelin’s commitments to the North American market and its operations across the continent run deep.

Half a century at least.

The tire maker recently marked its 50th year in Nova Scotia, and this year recognizes its 50th year in Greenville, S.C., where it operates its North American headquarters. During that time, Garcin said, Michelin has routinely invested in its North American manufacturing capabilities. 

Moreover, that commitment comes right back to sustainability. It is, after all, built into that all-sustainable pledge intended to balance people, profit and planet.

The newest Bridgewater investment proves as much.

For instance, Mutch told Tire Business that an important aspect of the Nova Scotia project will involve converting a great deal of the manufacturing processes in the factories to electric power. This is especially true for curing presses, which for the most part use steam power.

Parallel to converting equipment in the factories will be Michelin Canada’s increased use of electric power as part of its drive toward reduced overall energy consumption and increased use of renewable energy, such as wind or solar.

These are exactly the kinds of investments that Michelin has been making across its facilities, Garcin told reporters last month. Michelin is continuously evaluating its operations and investing intelligently in equipment, processes, utilities and procurement of resources.

“We believe that what is good for our business must be good for the world at large. And minimizing the impact of the business and products on the natural environment is part of who we are,” Garcin said last month during a media roundtable. “We are investing a lot and the goal is—to by 2050—to have carbon neutral operations and to have fully renewable and recyclable tires. While this is our vision, I want to be clear that we are making this vision happen already.”

To this end, Garcin said, Michelin is continuously evaluating its operations and investing intelligently in equipment, processes, utilities and procurement of resources.

“When you look at all the investments we make across our sites, I can say that we have a double-digit percentage of those investment dollars spent and dedicated to minimize or improve the impact we have on the environment,” Garcin said last month.

“ … It could be to decrease water consumption, it could be to increase or to improve the quality of the water that we put back into the system so that it is the same quality level as what we took at the front door of our factory," he added. "It could be with solar panels. We do a lot to be sure that all our activities are sustainable because we want to be there another 50 years and more.”

Bruce Davis, Tire Business reporter, contributed to this report.