Michelin’s Chennai plant to start production by 2012

Michelin’s Chennai plant to start production by 2012

Mumbai: French tyre manufacturer Michelin today said work on its 4,000 crore Chennai facility is on track and production will begin by November next year.

“Our Chennai plant will begin production by November, 2012. The plant will have an initial capacity of 3 million units (per annum)," Michelin India national sales manager for truck & bus division B. Kumar told the news agency.

This is the company’s first plant in the country and once the project is fully implemented, it is envisaged to roll out 20 million rubber tyres every year. However, Kumar refused to offer a timeframe for this targeted output level.

Michelin entered into a memorandum of understanding with Tamil Nadu government in 2009 to set up the facility in Thiruvallur district. It plans to recruit around 1,500 people for the project in the initial phase. “We have already hired around 500 employees for the plant and plan to hire more soon," he said, adding that the plant will manufacture only truck and bus tyres.

The company pegs the bus, truck and LCV tyre market (radial and nylon tyres put together) at 12.1 million in 2011 and 12.6 million in 2012. The market was 11.8 million in 2010, Kumar said.

However, according to the Automotive Tyre Manufacturers Association (ATMA), the size of the domestic truck and bus tyre market was 1.56 crore units in 2010-11, and is dominated by players like Apollo Tyres, MRF, Ceat and JK Tyres.

Kumar also said that once fully commissioned, the Chennai plant will be one of the biggest plants for the group.

Asked whether the company would consider exports from the Chennai facility, Kumar said, “Chennai facility will cater to the needs of the domestic market only, as we want to increase our market share here."

At present, the market share of radial tyres in the country is around 14.5% of the overall tyre market. The radial tyre market is expected to constitute 50% of the overall market by 2020, he said, adding the company wants to tap the opportunity as this segment is expected to grow fast.

The Clermont-Ferrand (France)-headquartered company is present in over 170 countries and employs 1,11,000 people at 70 plants across 18 countries.