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PARIS, May 6 (Reuters) - French tyremaker Michelin plans to close its truck tyre plant in Budapest in response to adverse trends and aggressive competition in the European market.
The move will lead to a 39 million euro ($54 million) provision for non-recurring expenses in its first-half accounts relating to the closure, Michelin said in a statement.
“The decision reflects the fact that extending the facility is no longer possible, due to its location in an urban setting, and that improving its competitiveness would require excessive upgrading with new equipment,” Michelin said.
Production of tyres sold under the Taurus, Riken and Kormoran brands will end at the plant in mid-2015 and mainly be relocated to facilities in Poland, Romania and Germany, Michelin said, adding that 512 staff would be affected.
Michelin said it would continue to produce “very high performance car tyres” at its Nyiregyhaza plant, as well as maintaining its logistics center in Vac, and its strategic raw materials marketing unit in Tuzser.
Shares in Michelin were 0.2 percent lower at 88.41 euros by 0738 GMT, underperforming a 0.2 percent firmer French blue-chip CAC 40 index. ($1 = 0.7205 Euros) (Reporting by James Regan; Editing by Blaise Robinson and Sophie Walker)