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March 26, 2001 01:00 AM

Michelin, Shanghai Tyre form JV in Shanghai

Bruce Davis
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    SHANGHAI, China (March 26, 2001) — Group Michelin and Shanghai Tyre & Rubber Co. Ltd. have agreed to create a joint venture company in Shanghai to make and sell radial passenger car and light truck tires, steel cord and mixed rubber.

    The new company, Shanghai Michelin Warrior Tire Co. Ltd. — in which Michelin will own 70 percent and Shanghai Tyre 30 percent — will focus initially on Warrior brand tires for domestic and export markets, and also will produce, as soon as technically possible, Michelin brand tires, Michelin said.

    The new company, which is capitalized at $200 million, will operate annual capacities of 5 million tires and 5,000 metric tons of steel cord, Michelin said, although it did not identify which of Shanghai Tyre´s six factories will be involved. The venture will employ 2,710.

    Michelin also will create a research and development center in Shanghai, to work on solving the technical needs of vehicle makers in China, as well as those of the Chinese market in general. The R&D center will be 100-percent Michelin owned.

    In addition, Michelin has agreed to provide Shanghai Tyre with technical assistance for its separate truck and bus radial tire production.

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