Michelin Struggles Against The Spiralling Cost Of Raw Materials

July 2006 | Company News Alert

French tyre manufacturer Michelin has been hit by the ever-increasing cost of raw materials. The company has just unveiled a 29% fall in its net profit for the first half of 2006 to EUR276.1mn - a bigger-than-expected decrease. Operating profit was also down 29.4% to EUR485.2mn due to the 'massive' increase in the cost of raw materials, which were up by 21%, or EUR352mn. Michelin has faced a total extra cost of EUR62mn relating to raw materials during the period. The company's strategy of offsetting the higher cost of raw materials by raising the price of final products has not

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