Michelin North America Inc. is expanding capacity for earthmover tires at its Lexington plant by 50 percent over the next five years to meet growing demand in the mining industry.
The $85 million project includes the addition of new equipment, including several curing presses, to help produce large surface mining tires-57- to 63-inch radial earthmover tires, primarily-while creating 70 jobs by 2010. Preparation work for the project is underway, and the new workers will be phased in as the equipment is brought on line.
The 500,000-sq.-ft. Lexington earthmover tire plant began full production in 1998 and employs about 260. It was expanded by an undisclosed amount in 2001-03 in a $200 million project.
The plant also made radial farm tires for a while, but this production was phased out in 2004 in favor of expanding capacity for OTR tires, a company spokeswoman said.
The amount of square footage being allotted for the expansion has not yet been determined, she said. Michelin did not disclose the plant's capacity.
The facility will begin producing tires using the additional capacity within 18-20 months, said John Funke, director of marketing, earthmover tires, for Michelin.
While the project primarily will focus on increased output of 57- to 63-inch tires, the plant also makes tires in the 45- to 63-inch range.
The tire models made in Lexington fit on rigid haul trucks, loaders, motor graders, rigid dumpers, bottom dump trucks, bulldozers, forklifts and logging transports.
The 50-percent increase in production capacity is ``crucial to the growing supply needs of our earthmover customers,'' said Jim Micali, chairman and president of Michelin North America. He and other company officials unveiled the expansion plans at a Dec. 14 news conference held at the Lexington plant.
The investment will position the company to respond quickly to growth and demand in the large mining tire market, he said. ``As global raw materials become scarcer, the mining industry continues to increase productivity-and that's good business for everyone,'' he said.
A second expansion phase, if necessary, would be implemented in the future to increase the plant's curing capacity further. The additional phase is contingent on continued growth in the market, Michelin said.
Demand for earthmover tires has increased by 30 percent over the past two years, said Dave Cionek, Michelin vice president of marketing and sales for earthmover tires. Growing worldwide demand for coals and metals has pushed the mining industry to increase its efforts and, as a result, has led to an increasing demand for the company's large mining tires, he said.
Michelin's global mining tire segment is growing at about 9 percent annually, the company said.
The worldwide capacity to meet the demand of coal, metals and other natural resources is inadequate, and few new mines have opened recently, though more are planned for 2006, Mr. Funke said. Every tire that will be made in the Lexington facility ``already has a customer's name on it,'' he said.
The capacity boost will support North American and global markets, Mr. Cionek added, with about 45 percent of the products produced at the Lexington plant exported. Mr. Micali said that export rate is the highest of any of Michelin's North American tire plants.
Last year, Michelin announced it planned to build a $550 million earthmover tire plant in Campo Grande, Brazil, for the production of 25- to 49-inch tires. The facility will begin manufacturing in the second half of 2007, with an initial capacity of 40,000 tons per year and the capability to expand to 55,000 tons.
The projects in South Carolina and Brazil-along with added capacity to its tire factory in Vitorio, Spain-will increase Michelin's global earthmover tire production by 34 percent over the next three years, Mr. Cionek said.
The tire maker also spent $12 million in 2004-05 to enhance capacity for large industrial and construction tires at its Waterville, Nova Scotia, truck and earthmover tire factory.
The company's goal is to expand its market share by 30 percent globally following its capacity boosts, the Michelin spokeswoman said.
Mr. Micali said the project continues Michelin's ``investment in the future of manufacturing'' in North America, South Carolina and the Lexington community. Michelin North America, which has its headquarters in Greenville, S.C., said it has made more than $2.28 billion in capital investments in the state over the past 20 years. It also employs more than 7,600 and runs eight plants, a research and development center and a test track in South Carolina.