Pirelli Russian plans include winter, farm tyres

ERJ staff report (TB)

Milan, italy -- Pirelli & C SpA's industrial plans for Russia - expected to be disclosed by year-end - will include winter passenger and radial farm tyre capacity, according to information gleaned from the firm's latest five-year industrial plan.

Pirelli is still evaluating its tyre-manufacturing options in Russia regarding a greenfield site or an acquisition, Pirelli Tyre SpA CEO Francesco Gori told analysts in Milan recently when discussing the firm's industrial plan for 2011-2015.

Pirelli signed a joint development pact in December 2008 with Moscow-based Russian Technologies State Corp. to oversee the construction of a truck tyre and steel cord plant in Russia's Samara region. That project was valued at the time at $430 million and was slated to have begun construction by the second half of 2010.

Pirelli and Russian Technologies later amended their agreement to include the possibility of acquiring an existing Russian facility.

Pirelli's industrial plan through 2015 now includes a provision for radial agricultural tyres at a greenfield plant by 2013 to service the European marketplace, both east and west.

Pirelli said installing capacity in Russia would put it in position to bid for OE contracts within the Confederation of Independent States markets and solidify the firm's brand in the growing aftermarket there as well.

Pirelli did not elaborate on plans for winter tyre production in Russia. That possibility was raised in passing in Mr. Gori's presentation to analysts.

The Russian project is part of nearly $825 million Pirelli is budgeting through 2015 to increase the firm's industrial tyre production capacity 20 percent to 7 million units annually. Investments are targeted for plants in China, Latin America, Egypt and Rumania.

From Tire Business (A Crain publication)