Michelin is stabilising its Indian operations
Show cause notice
Michelin has been served a show-cause notice by the Maharashtra Industrial Development Corporation (MIDC) asking why land leased to the company near Pune should not be taken back. 100 acres of industrial land at the Ranjangaon Industrial Estate was allotted to the erstwhile Michelin Apollo Tyres joint venture set up in 2004 to make bus and truck radial tyres. One and a half years later, Michelin bought out Apollo Tyre’s stake in the joint venture. Thereafter the land belonged to it. Michelin is a French tyre company. According to the lease agreement, Michelin should have completed construction of its plant in the allotted land by August 2007. But it was not done. MIDC issued a notice to Michelin for terminating the lease in February 2010.
Acute land shortage near Pune
Michelin in the meanwhile, signed a MoU with the Tamil Nadu government to set up a plant near Chennai. Michelin also made a fresh representation to the Maharashtra government. Michelin sought a larger piece of land to set up a large tyre facility in Maharashtra for domestic consumption and export of tyres. MIDC issued a second show-cause notice in the beginning of 2011 to Michelin. Many automobile operators and auto ancillary industries are vying for land in Chaken near Pune. 7500 industrialists and companies are on the waiting list to get land allotted near Chaken where Bajaj Auto, Mahindra & Mahindra and other automobile players are operating. LG is also seeking land in the area for setting up its third plant in India. Resistance from farmers is preventing the government from acquiring more land in the region.
Tamil Nadu operations start
Michelin India Tamil Nadu Tyres Pvt Ltd has started its operations in its plant in Tamil Nadu to manufacture truck and bus radials. It involved an investment of Rs.4000 crore over seven years. The first tyres from this factory are expected to roll out at the end of 2012. In the first year, it will roll out three lakh tonnes of radial tyres. Michelin’s upcoming tyre plant north of Chennai with a capacity to manufacture 4.5 lakh tonnes of radial tyres is likely to be the group’s largest tyre plant in the world. 90% of the total production will be used for domestic consumption. Nicolas Beaumont is the President and Managing Director of Michelin India Tamil Nadu Tyres. The factory is being developed at Thervoy Kandigai SIPCOT Industrial Park on 290 acres of leased land in Tiruvallur district in Tamil Nadu. About 1500 people will be hired in the factory. 356 employees are already undergoing training in various parts of the world.
No aircraft tyres
Michelin is concentrating on heavy vehicles segment as it has a 14.5% radialisation. More chances of growth are found in this segment. As passenger car tyres have different sizes from small, medium to big, Michelin is not very particular about this sector. In the meanwhile, a group of villagers moved to Supreme Court against the setting up of SIPCOT itself. Michelin sees India too small a market for producing aircraft tyres. MRF is producing and supplying 450 tyres every month to helicopters. MRF is also scouting for orders from Indian Airforce for the supply of aircraft tyres.
BIS problem solved
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