Michelin’s investments and plans for increased production at their Dundee factory and the modernisation of its logistics and warehousing infrastructure in Stoke-on-Trent are in stark contrast to the announced run-down of the Ballymena factory by mid-2018.
The firm says it decision to run down the truck tyre factory in Ballymena has been made in light of the significant downturn in demand for truck tyres in Europe since the financial crisis of 2007, which has seen the market decrease by over 5 million tyres.
This reduced market has been made even more challenging by the huge influx of tyres made in Asia, which have doubled in the last few years, and increased competition.
The company statement makes it plain that staying in Northern Ireland was simply not cost effective.
It said: “As a result, there is a strong need to reduce overcapacity and to concentrate Michelin truck tyre production in larger, more competitive sites.
Despite great efforts and progress being made in previous years, other European plants are still more competitive than Ballymena.
“The tyre building machines at Ballymena are not capable of making the high tech tyres of the future, and the amount of investment required to upgrade the plant is prohibitive, particularly at a time when that capacity is not required.
“As part of MTPLC’s plans to maintain its position as a key part of Michelin operations in Europe, it is announcing investments of £65 million at its Dundee and Stoke-on-Trent sites.
“Dundee will benefit from a five-year investment of more than £52 million to transform it into a state-of-the-art factory. The investment will increase production by 30 per cent through the installation of new tyre-building machines, enabling the production of larger tyres which are a growing segment of the market.
“Tyre curing capabilities will be increased with the installation of electric presses, the first large-scale industrialisation of this technology at a Michelin production site.
A new 20,000 square metre warehouse will be built on site to accommodate this increased production.
“Following a modernisation project of the Stoke-on-Trent factory with a £21 million investment over the last few years, there will be an additional investment of £12 million in its production and logistics facilities. This will include a modernised distribution centre of 53,000 square metres in Stoke-on-Trent to serve all MTPLC customers, dealers and partners from a single shared logistics platform.
“This series of investments will lead to the creation of a total of more than 100 new jobs in Dundee and Stoke-on-Trent. Michelin Tyre plc has developed these proposals to maintain its leadership position by responding to market changes, increasing competitiveness, improving manufacturing efficiency and enhancing customer service.”