SINGAPORE (Feb. 16, 2001) — Group Michelin and Shanghai Tyre & Rubber Co. Ltd. have agreed to set up a 70-30 joint venture in China, and the parties are now awaiting final approval from the appropriate authorities and boards, Michelin said recently.
The new company, which will be a foreign-invested joint stock limited company, will focus initially on radial passenger and light truck tires for both domestic and export markets, Michelin said.
The new as-yet unnamed company will obtain certain, undisclosed assets from Shanghai Tyre to facilitate the start-up. Michelin and Shanghai Tyre hope approvals can be granted by the middle of March, which would enable the joint venture to begin operatons by the end of that month.
Michelin did not comment on the value of the venture; news reports from China quoted Shanghai Tyre officials saying the venture would require start-up capital of $80 million, with Michelin contributing $56 million.
The news reports said Michelin and Shanghai Tyre had agreed at this time to not include medium truck tires in the venture, contrary to earlier reports out of China.