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 Investments 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.
