Michelin grapples with rise in raw material costs
French tire maker Michelin said Friday it was grappling with a "violent" rise in raw materials costs.
Michelin is confronting "an unprecedented hike in the cost of raw materials," notably for natural rubber, company manager Michel Rollier said during a shareholder general assembly.
He said the impact of the increase, estimated at between 700 and 750 million euros (888 and 952 million dollars) this year, would be absorbed by price hikes implemented since late last year.
Jean-Dominique Senard, finance manager, said this "violent increase (in raw materials costs) is a challenge for the group in 2010."
But Rollier added that there had been a "a clear gain in activity on tire markets in the frist quarter."
He described emerging markets as "extremely damaging" while those in Europe and North America were rebounding strongly.
Michelin aims to boost sales volumes by 10 percent this year.
Sales in the first quarter rose 12.2 percent to 3.9 billion euros.
© 2010 AFP