13 June 2013 21:28 [Source: ICIS news]
MEDELLIN, Colombia (ICIS)--An influx of cheap imports, a revaluation of the Colombian peso and other local economic factors have forced France-based international tyre major Michelin to end manufacturing operations in Colombia, the company said on Thursday.
Operations at the Chusaca truck tyre plant, near Bogota, and a passenger tyre plant in Cali will close in the summer with the loss of 460 jobs, the company said.
Tyres are made with sytrene butadiene rubber (SBR).
Michelin acquired the plants and associated sales and distribution assets following the purchase of local firm Icollantas in September 1998.
“The decision to end operations was a difficult and painful one,” said Jorge Luis Vega, president of Michelin Colombia.
Vega cited losses of around Colombian pesos (Ps) 300bn ($158m, €119m) in the last 15 years, despite investments over this period totalling Ps261bn.
“However, the decision is irreversible and cannot be postponed, given the financial results,” he added.
The announcement of the plant closures in Colombia follows the news earlier this week that Michelin will end truck tyre production at its plant in Algeria in late 2013.
The company also announced the end of truck tyre production at Joue-les-Tours, near Tours, France, in the first half of 2015, and will instead focus its European production at La Roche-sur-Yon, south of Nantes.
Despite the plant closures in Colombia, Michelin said it would step up sales and distribution of its products in the country by developing the existing sales force, while local demand would be met by imports from neighbouring countries.
“Just to be clear, the Michelin brand will continue in Colombia,” Vega said.
($1 = €0.75, $1 = Ps1,899)
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