The French group said its Dundee site, which employs 855 people and makes car tyres, would be benefiting from an “important investment” as part of a shake-up of its European operations.
It said: “The investment will increase production by 30 per cent by 2020, according to current market forecasts, through the installation of new machinery, enabling the production of larger tyres which are a growing segment of the market. A new warehouse will be built on-site to accommodate this increased production.”
According to Michelin’s website, its Dundee factory – which opened in 1972 – manufactures more than seven million car tyres each year for export all over the world. In 2006 it became the company’s first site to embrace wind energy, with two turbine generators helping to reduce its environmental impact and energy bills.
However, the investment boost for the city came as Michelin announced plans to close its factory in Ballymena, Northern Ireland, by the middle of 2018 – a move that is set to cost 860 jobs.
The company said: “The proposal to run down the truck tyre factory in Ballymena has been made in light of the specific difficulties the site has been experiencing for several years: very aggressive competition and manufacturing overcapacity on the truck tyre market, heavy logistics costs due to its location, and high production costs principally due to the price of energy.
“An employee consultation process will begin immediately regarding the run-down proposal. The Ballymena factory currently employs 860 people, and [Michelin] is committed to supporting those employees during the consultation and in the forthcoming months.”
Michelin also unveiled proposals to close sites in Italy and Germany.
In May, the group struck a £50m deal to buy Borders-based online tyre fitter Blackcircles.com, triggering a multi-million windfall for its founder, Mike Welch.