Pirelli Tyre eyes 6-8% growth in 2010

ERJ staff report (TB)

Milan, Italy -- Pirelli Tyre SpA should achieve 6- to 8-percent sales growth this year based on continuing growth in the firm's emerging markets and recovering demand in North America.

Pirelli Tyre executives also expect the firm to achieve operating income on par with 2009, when the operating earnings/sales ratio hit 7.7 percent.

After experiencing relief from raw materials pricing last year, Pirelli Tyre sees an earnings “headwind” of up to $270 million from rising materials prices this year, according to Pirelli Tyre CEO Francesco Gori, speaking to financial analysts today in Milan.

To offset this, Pirelli Tyre is targeting about $80 million in operational cost savings this year, he said, along with announcing price increases in most of the firm's major markets.

To keep pace with what the company sees as rising demand for its product, Pirelli Tyre is budgeting nearly $410 million this year to accelerate capacity expansions worldwide, including new plants in Italy and Russia.

Other projects on tap are: doubling car tyre capacity in China, boosting car tyre capacity 60 percent in Romania and 25 percent throughout Latin America; and expanding truck tyre capacities 20 percent in China, Egypt and Latin America.

From Tire Business (A Crain publication)

Press release from Pirelli