The government has cleared a Rs 11,000-crore foreign direct investment (FDI) proposal of French tyre giant Michelin to set up a manufacturing facility in Tamil Nadu.
The Foreign Investment Promotion Board (FIPB) had cleared the proposal under which Compagnie Financiere Michelin (CFM) plans to set up a wholly-owned subsidiary to make radial tyres, tubes and ancillary tyre-related products at the plant, according to an official release.
The company has proposed an investment of Rs 4,000 crore over a period of seven years and intends to make a further infusion of Rs 7,000 crore over a period of three years after the completion of the initial funding, depending on the progress of the project and demand of the tyre market.
A Michelin spokesperson said the facility will go on stream within the next three years.
“The group has decided to invest in a manufacturing facility to produce truck radial and off-the-road tyres in India. Considering the stage of discussions, we hope that this plant will start functioning in three years time,” the official added.
Michelin considers India as a strategic market and key pillar for its growth in the future, the spokesperson said.
The tyre major has formed a new entity — Michelin India Tamil Nadu Tyres Pvt Ltd — with paid up share capital of Rs 1 lakh. Currently, two individuals — Rupa Sarah Jacob and R Ravichandran — hold the entire 10,000 shares worth Rs 1 lakh. CFM would now acquire the entire stake and make it a wholly-owned subsidiary of the tyre giant.
