MICHELIN is to invest more than £50 million at its factory in Dundee.

The tyre manufacturer said new machinery to make larger tyres will see production increase by nearly a third, with the city sharing in 100 new jobs created across the firm’s UK operations. The program of £52m investment over five years in the Dundee plant will include a new 20,000 metre square warehouse.

Michelin is Dundee’s largest industrial employer, with almost 1,000 staff at the Baldovie plant.

The 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.

While the news comes as a significant boost to the Dundee and wider Scottish economy, Michelin has announced plans to close its factory in Ballymena, Northern Ireland – a move set to cost 860 jobs.

The company said it will “run down” the Ballymena plant by mid-2018 as part of a restructuring plan that will see investment in its facilities in Dundee and Stoke on Trent. Michelin said: “The proposal to run down the truck tyre factory in Ballymena has been made in light of the significant downturn in demand for truck tyres in Europe since the financial crisis of 2007, which has seen the market decrease by over five million tyres.

“This reduced market has been made even more challenging by the huge influx of tyres made in Asia, which have doubled in the last few years, and increased competition.

“As a result, there is a strong need to reduce over-capacity and to concentrate Michelin truck tyre production in larger, more competitive sites.

“Despite great efforts and progress being made in previous years, other European plants are still more competitive than Ballymena.

“The machines at Ballymena are not capable of making the hi-tech tyres of the future, and the amount of investment required to upgrade the plant is prohibitive, particularly at a time when that capacity is not required.”

A consultation exercise with the workforce will now begin.

“Michelin appreciates the impact these proposals may have on the employees and local community, and commits to support every employee throughout the process,” the company said. “In the coming weeks we will meet every employee individually to discuss the proposal and the assistance the employee may need.”

Davy Thompson, Unite’s regional co-ordinating officer, expressed deep regret at the news.

“This announcement is a cruel blow to the workforce and is devastating news for the northeast economy, and that of Northern Ireland as a whole,” he said.

He said an extra 500 contractors and many more in the wider economy in Northern Ireland also faced redundancy.

“These were highly-paid, secure jobs reflecting the progressive employment practices of Michelin and their loss will devastate the retail and services economy in this region,” he added.