Michelin completes OTR plant in record time, eyes expansion

STARR, S.C. (Dec. 23, 2013 — Michelin North America Inc.'s newest OTR tire plant, built in Starr in record time of 17 months and one of just three Michelin plants worldwide capable of making 63-inch radials, is designed to be expanded multiple times, Chairman Pete Selleck said at the plant's unveiling Dec. 12.

The plant, dubbed US10, uses a modular design that was based on the firm's Lexington, S.C., plant, which has been expanded five times since it opened in 1996, Mr. Selleck said. Michelin budgeted $750 million to build this plant and expand the Lexington facility at the same time.

Mr. Selleck cited South Carolina's infrastructure — including the port of Charleston — its government's willingness to work with industry and availability of skilled labor as well as the success of the Lexington plant as reasons the company chose to build this plant in Starr.

South Carolina put up $9.1 million in funding toward the project, Michelin said in 2011, Michelin will benefit from provisions from Anderson and Lexington counties allowing the firm to pay fees in lieu of taxes.

Michelin also is spending $200 million to expand the Starr rubber compounding and materials preparation plant that sits on land adjacent to the new OTR factory. The project should be completed by next year.

The new plant is dedicated to 57- and 63-inch versions of the firm's XRD line, according to Bruce Brackett, global earthmover tire manager. On display at the plant's opening was a 56/80R63 XRD2, which Michelin claims is the largest tire on the market, standing 13 feet tall and weighing 11,000 pounds.

Michelin's other giant OTR plants are the Lexington factory and the plant in Vitoria, Spain.

Michelin declined to discuss capacities at either plant, but said the two projects together will result in 500 new jobs. Michelin was able to train new employees at the Lexington plant, accelerating the learning curve, Mr. Selleck said.

Michelin officials declined to say how many of the new hires would be working at Starr and how many at Lexington.

"It would be an understatement on my part," Mr. Brackett said, "to say this inauguration has critical ramifications for our business worldwide."

The new plant covers 853,000 square feet, including materials preparation, tire building, curing, inspection and warehousing/shipping sections. Gray Construction of Lexington, Ky., was the general contractor.

Mr. Selleck declined to say how quickly the tire maker might expand it, saying it would depend on demand.

Michelin expects to export up to 80 percent of the plant's output, Mr. Selleck said, principally to Canada, South America and Australia, to about 1,300 mining operations.

The first tires were built at the plant Nov. 25. The company said tires made during the next several months will be sent primarily to Michelin's OTR test grounds in Spain for evaluation. The plant will ramp up quickly to a 24/7 operation, Mr. Selleck said.

The tire maker derives about 15 percent of its sales annually from its specialty tire businesses — predominantly from the OTR segment — which equates to nearly $4 billion.

Michelin operates five other earthmover tire plants globally: Waterville, Nova Scotia; Campo Grande, Brazil; Le Puy and Montceau-les-Mines, France; and Zalau, Romania