The Romanian division of the world''s largest tyre producer, the French group Michelin, last year generated 143 million euros in business, a level higher than the initial estimates by group officials made at the beginning of the year.
"We are suppliers for the Logan model, and the better-than-expected sales of this model have translated into better-than-expected sales for us, too," says Cristina Hanganu, communications manager with Michelin Romania.
She says the growth in sales for Michelin Romania will continue this year, with the company''s business in Romania set to approach 180 million euros.
"We estimate 25% in growth for this year. This will be due to the Dacia Logan, which is continuing to see strong demand, but also because we started producing metallic cords (a basic component in tyre production)," Hanganu explained. Most of Michelin Romania''s production goes to export.
The company is planning to invest 50 million euros over the 2004-2005 period, mainly in increasing capacity at its two plants, Silvania Zalau and Victoria Floresti. The investment will also go to improving quality so that the company will be able to produce superior category tyres. A further 25 million euros will be invested by 2007 in the metallic cord plant in Zalau.
Michelin entered the Romanian market in the summer of 2001 by acquiring two tyre plants belonging to Tofan Group (Silvania Zalau and Victoria Floresti), as well as some other assets of the group. The value of the deal has not been disclosed, but the most common estimate puts it at around 80 million dollars, funds which went to the Nomura International investment fund and businessman Gelu Tofan, the founder of the group.
Among the French group''s global rivals, the German group, Continental, also produces on the Romanian market. Continental has invested more than 120 million euros in its plant in Timisoara.
Italian group Pirelli also announced they will invest 150 million euros in two plants, in Slatina (a metallic cord plant and a high performance tyre plant).
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