Monday, 16 November, 2009

Michelin signs MoU with TN for tyre project near Chennai

Coming as yet another big ticket investment attracted by Tamil Nadu in the auto sector, the global tyre giant, Michelin Group, France
signed an Mou with Tamil Nadu government on Monday for setting up its tyre manufacturing plant, near Chennai.
The project with an investment of Rs 4,000 crore will come up on 290 acres at the new Sipcot complex at Thervoy Kandigai, 50 km north of Chennai in Thiruvallur district.
The MoU was signed by State industries Secretary M F Farooqui and Michelin Africa-India-Middle East President, Prashant Prabhu before the State Chief Minister, M Karunanidhi, deputy CM, M K Stalin and senior officials.
"The manufacturing facility will focus on a range of radial\bus tyres. The plant will start operations in 2012 and will focus on the growing Indian market," the company said in a statement. It will absorb 1,500 workers locally.
It is learnt the plant will produce heavy commercial vehicles tyres besides off-road heavy tyres fitted in construction equipment made by players like Komatsu, JCB, John Deere and Caterpillar.
It is also understood that the investments could touch Rs 7,000 crore once the project takes off, considering the supplier chain that would be developed.
Apparently, Michelin would use TN as the centralised facility and to achieve economies of scale, it could also consider shifting its existing plant in Maharashtra. Also, since the tyre mix has not been finalised, the plant capacity could not be ascertained.
Soon after inking the MoU, Mr Prabhu, who will be steering the newly formed, Michelin Tires India (Tamil Nadu) told ET, "We are attracted to TN both from the people and professional point of view. It has a very good manufacturing environment and offers multi-model connectivity. Besides the availability of good people and professionals, the State has a good educational system and recreational facilities".
Stating it is looking at catering to both customers (OEM market) as well as users (replacement market), he said capacity for the plant will depend on the requirements. He declined to comment on the status of Michelin’s project earlier announced in Maharashtra. But, he said the plant near Chennai will be its first greenfield project in India.

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