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Chennai/New Delhi, Nov.16 French tyre major Michelin intends to set up a manufacturing unit at Gummidipoondi, some 40 km north of Chennai. The company will invest Rs 4,000 crore over seven years.

The plant is expected to start manufacturing from 2012 and will produce truck and bus radials for the domestic market in the first phase.

A memorandum of understanding was signed between Michelin’s representative, Mr Prasanth Prabhu, and the Tamil Nadu Industries Secretary, Mr M.F. Farooqui.

“The Indian truck market is transforming and is on the way to radialise,” said Ms Claire Dorland Clauzel, Senior Vice-President – Communication and Brands and Member of the Group Executive Council, while speaking to the media in an interaction earlier this month.

For the tyre plant, Michelin has been allotted 290 acres in the SIPCOT industrial estate, Gummidipoondi. When in full operation, the unit will provide direct employment to 1,500 persons, a release from the State Government said.

This is Michelin’s second tryst with India. In the 1990s, Michelin was a shareholder-partner of MRF Ltd. Ever since the partnership broke down in the mid-1990s, there had been talk of the MNC setting up a plant in Tamil Nadu on its own. The company had set up a joint venture with Delhi-based Apollo Tyres in 2003 for manufacturing truck and bus radials, which got dissolved in 2005.

In July this year, the Government cleared an FDI proposal for infusion of around Rs 11,000 crore over a 10-year period for the company to set up a greenfield facility in Tamil Nadu. Of this, Rs 4,000 crore is being utilised in the first seven years, while the remaining will be invested over the next three years, in line with the market demand.

Michelin is an original equipment (OE) supplier of tyres to many of Honda’s cars in India, besides Mercedes. In buses, it is an OE supplier for Volvo. Its portfolio of products includes tyres for cars, trucks, buses, off-the-road (OTR) vehicles and even two-wheelers. Currently, Michelin imports most of the tyres from its Thailand plant.

The €16-billion Michelin has operations in 69 production centres in 19 countries and employs 1,20,000 people. The company, which has an annual production of 177 million tyres, was recognised as the world’s second largest tyre maker in 2008.

More Stories on : Tyres | New Projects | Tamil Nadu

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