ERJ staff report (DS)
Milan - The global market for tyres in the car segment was 1,342 million units in 2011, an increase of 4% from 2010, when it had increased by 10%, according to Pirelli's annual report published this week.
Within that 4 perent growth, said Pirelli, Growth in the premium segment was sustained, with a 15% increase in 2011.
The global radial truck tyre market reached an estimated 135 million units in 2011, an increase of 7% over 2010.
In reviewing the year, Pirelli said that on 5 July 2011, it acquired 15% of the Chinese company Pirelli Tyre Co. Ltd from the minority shareholder for 256 million Renminbi, or about euro 28 million. The shareholding of Pirelli consequently rose from 75% to 90%.
Later that month Pirelli signed agreements in Russia. They were finalised in December 2011 and February 2012. The agreements concerns two production sites that will allow the joint venture to produce about 11 million units by 2014. The Pirelli branded product may account for up to 50% of installed capacity. The joint venture will produce winter tyres for the replacement market, with a special focus on studdable tyres to meet demand in the Russian and CIS area markets. The joint venture will have a market share of about 20% in the premium segment.
The Voronezh plant will concentrate its activity on high-end tyres, with annual output of 2 million units in 2012, set to rise to 4 million units in 2014, while production at Kirov, already at 6.5 million units per year, will remain unchanged, with more than 60% of the total output being converted to the Pirelli brand.
Net sales in the tyre unit for 2011 totalled Euro 5,601.6 million, up 17.4% from the euro 4,772.0 million reported a year earlier. When broken down by sales channels, 74.5% of sales refer to the replacement channel, while original equipment accounts for 25.5%.
Pirelli said, â€œThe downturn that occurred between 2008 and 2009, in consequence of the global economic crisis, has been more than offset by high growth in 2010 and 2011.â€
The premium segment confirmed its role as the driving force behind the growth in revenue, with net sales growing over the year by 27.3% to euro 1,844 million.
Pirelli began making investments in high-end radial tyre production capacity in China. Its goal has been to have a local producer in a geographical region enjoying strong expansion and offer a radial product to mature markets as well.
Pirelli said its Brazilian plants produce silica from rice husks, an ecological material that will account for about 30% of use in Latin America in 2015.
In terms of technology., Pirelli said its Continuous Compounding process - CCM has evolved and is now called the the PTSM - Pirelli Twin Screw Mixing - process,
Pirelli said The CCM compound production process and PTSM make it possible to reduce consumption per unit of product by about 20% and realise major benefits for the uniformity of compounds, with a reduction of 30 percent in energy consumption as compared with traditional techniques.
The report includes a long section on remuneration. Francesco Gori, CEO of Pirelli Tyre was paid a basic salary of euro 1.25 million plus some variable bonus awards, which brought the total to euro 10.5 million in 2011.
This is an external link and should open in a new window. If the window does not appear, please check your pop-up blocking software. ERJ is not responsible for the content of external sites.
Annual report from Pirelli