Milan, Italy-Pirelli and Chinese tyre maker Aeolus Tyre Co. Ltd are to set up a joint venture in the first half of 2005 to make tyres in Henan Province.
The JV will start by producing radial truck tyres, mainly for Chinese domestic consumption and export to other countries in South-east Asia. A new plant to make radial car tyres is also planned, to be followed by a plant to make steelcord for radial tyres.
Pirelli has joined a growing army of western and US tyre makers setting up manufacturing operations in China to take advantage of the region's rapid growth. Radial tyre production in China rose by 28.5 percent in the first half of 2004 alone, said Pirelli.
With an investment to 2007 of more than Euros 150 million, the venture â€œwill rapidly become one of the major radial tyre manufacturing companies in the country,â€ according to a Pirelli statement.
And Pirelli's global truck tyre production will increase by about 33 percent (or over 50 percent for all-steel truck tyres). The new plant will add to Pirelli's existing truck tyre operations in Italy, Turkey, Egypt and Brazil.
â€œWe have identified in Aeolus Tyre a high profile partner with all the necessary qualities to succeed in this joint ventureâ€, said Francesco Gori, general manager of Pirelli Tyres Sector (pictured).
â€œPirelli is a technology leader in radial tyres worldwide and we intend to be among the key players at this time of strong growth of the radial tyre business in China,â€ Gori added, in Pirelli's statement.