French tyre manufacturer Michelin (MICP.PA) has announced the sale of its Russia Tyre Manufacturing Company (MRTMC) and Camso CIS in Russia to Power International Tires, a prominent tyre distributor in the country. The agreement, which has been approved by local authorities, aims to preserve 250 jobs primarily located at Michelin’s sole Russian plant in Davydovo.
Michelin acknowledges that it may not be feasible to transfer every employee to Power International Tires. Consequently, the company has decided to provide an option for those who wish to leave the company, ensuring that they do so under favorable conditions.
Having established a presence in Russia in 1997, Michelin became the first international tyre company to establish its production plant in the country in 2004. However, following Moscow’s invasion of Ukraine, Michelin announced last year that it would suspend industrial activities in Russia and cease exports to the country.
The termination of Michelin’s operations in Russia has had a significant impact on its performance. In April, the company reported a 25% decline in volumes during the first quarter of this year as a direct consequence of its withdrawal from the Russian market.
This strategic decision to divest its assets in Russia aligns with Michelin’s broader corporate objectives and ensures the preservation of employment opportunities at the Davydovo plant. The company remains committed to facilitating a smooth transition for its employees affected by the transaction.
Michelin’s long-standing presence in Russia has allowed it to establish a strong foothold in the market and build a reputation for quality and innovation. However, recent geopolitical events and their subsequent impact on international trade have necessitated a reassessment of the company’s operations in the region.
By partnering with Power International Tires, Michelin has identified a suitable buyer that can leverage its existing distribution network and industry expertise to continue servicing the Russian market effectively. Power International Tires has demonstrated a solid track record in the industry, making it a reliable partner for Michelin’s divestment plans.
While the sale of MRTMC and Camso CIS marks the end of an era for Michelin’s direct manufacturing operations in Russia, the company remains committed to its global growth strategy. Michelin will continue to focus on expanding its presence in other key markets and investing in research and development to drive innovation and meet evolving customer demands.
Michelin deeply values its employees and understands the importance of providing them with fair and equitable options during times of transition. The company is dedicated to supporting those who choose to leave through generous separation packages and assistance in seeking new employment opportunities.
In conclusion, Michelin’s decision to sell its Russia-based tyre manufacturing assets to Power International Tires is a strategic move aligned with its long-term goals. By divesting from the Russian market, Michelin aims to mitigate the impact of geopolitical challenges and focus on driving growth in other regions. The company’s commitment to preserving employment opportunities at the Davydovo plant reflects its dedication to its workforce. As Michelin embarks on this new chapter, it will continue to prioritize innovation, quality, and customer satisfaction in its global operations.