Michelin is selling its Sri Lanka-based Midigama Tyre Division and Casting Product Division plants that manufacture bias tires and tracks for compact Construction equipment, to the CEAT group, a recognized player that is a better fit for these activities.
In addition to the production facilities, the sale will also include the Camso brand, a renowned brand in these segments, at the end of a three-year licensing period.
The high level of performance and engagement of employees, and the quality of the production facilities, have greatly contributed to making this a successful transaction.
In full agreement with CEAT, it preserves jobs and ensures business continuity for Michelin customers worldwide.
The transaction remains subject to regulatory approvals from the relevant authorities.
Michelin and CEAT are committed to working hand in hand to ensure a smooth transition for all employees, customers and suppliers.
Michelin's continued commitment to Construction markets and to Sri Lanka
The Group will focus on its most value accretive offers for Construction application.
These include radial tires, solid tires and assemblies.
Michelin will thus exit from its activities related to Compact Line bias tires and Construction tracks.
The Group also intends to continue its other manufacturing activities in Sri Lanka.
The country remains important for Michelin, where the company plans to continue modernizing its production facilities alongside improving performance – as everywhere in the Group.
No layoffs at the affected plants and a coordinated transition
With this operation, Michelin and CEAT are aligned and do not intend any layoffs at either of the two plants.
Michelin and CEAT will work together to implement appropriate measures for all 1,587 employees at the Midigama Tyre Division and Casting Product Division plants and the related support functions, creating the right conditions for a smooth handover between the two companies.
Michelin will continue to support all its teams in Sri Lanka to help ensure that activities there remain competitive.
Attention to customers and suppliers
Michelin and CEAT will make every effort to ensure business continuity for customers and suppliers.
Further to this announcement, the two groups will pay particular attention to providing seamless support for all their partners.
Nour Bouhassoun, Senior Vice President, Beyond Road Business Line at Michelin, said:
“Michelin firmly believes that CEAT is the right fit to carry on our bias tires and tracks for compact Construction equipment business.
Both our companies are fully committed to ensuring a smooth transition for our employees and business continuity for our customers and suppliers.
With this operation, Michelin is continuing to reshape its Beyond Road business, in line with the Group's sustainable growth strategy.”
Arnab Banerjee, Managing Director & CEO of CEAT, said:
“The Camso brand is an excellent fit with the growth strategy of CEAT’s Off-Highway tire business, thereby improving our margin profile.
Access to the most premium customers, a high-quality brand and a qualified workforce is what excites us the most about this acquisition.
The track segment is a technologically superior segment with a limited number of global players.
We also found high synergies between the two brands, CEAT and Camso, and are confident that both will benefit tremendously from their complimentary capabilities and positioning.”