Michelin: Romania becomes interesting as an outlet, too

Romania and the other Eastern European countries are much more interesting as tyre manufacturers and less attractive as outlets, but consumption is expected to pick up over the following years, stated Alexis Burlacot, marketing manager with the truck tyre unit of Michelin Europe.
“The growth pace seen by some markets such as Romania or Russia is now highly nimble, of 10-15% per year, in contrast with mature markets such as the ones of Western Europe or the US, where the growth pace is much lower, of just several percentage points,” Burlacot also specified.
Michelin currently owns two plants in Romania, namely Silvania Zalau and Victoria Floresti, which it acquired in 2001, beside other assets, from Tofan group, and a metallic cord plant built as a result of a greenfield investment in Zalau.
At present, exports to the United States and other European countries weigh approximately 75% in Michelin’s business in Romania.
“The countries we currently have production centres in, such as Romania, are becoming increasingly attractive as outlets, too. These are expected to rebound in the near future,” said Alexis Burlacot.
He stated one of the main drives behind these markets’ growth was the development of the carrier networks.
“It’s worth noting carriers operating in Eastern Europe are becoming increasingly specialised and professional, with a direct impact over our businesses,” stated Burlacot.
Michelin last week officially announced at its technological centre of Ladoux, France, it would invest approximately 400 million euros by 2011 to manufacture a new type of truck tyres, using the so-called durable technologies, which will raise the life span of tyres by 25%.
The sum will go to the production of 4 million new and recycled tyres.
Michelin officials stated that by investing in the XDN 2 GRIP technology, the company plans to boost sales on a key-segment, that of heavy truck tyres, generating 40% of the net profit and around 25% of the turnover of the manufacturer, which achieved 15.7 billion euro worth of sales worldwide last year.
The production of tyres based on the new technology has already been launched in three European plants of Michelin, in France, Spain and Germany.
“Romania is an extremely interesting market for us at this moment and, of course, we are not ruling out the possibility of launching manufacturing lines using durable technologies in other locations as well, such as Michelin’s plant in Zalau, where we currently manufacture heavy truck tyres,” specified Pete Selleck, a member of Michelin’s board and head of its heavy truck tyres unit.
Michelin, the world’s biggest tyre producer, owns 75 plants worldwide and sells its products in more than 170 countries.