Pirelli With Great Ambitions in Africa

Pirelli’s truck tyre division generated a 1999 turnover of 466 million Euro and an EBIT of approximately 38 million Euro (eight per cent of turnover). For the current year the division has set itself the firm target of breaking the 500-million-euro barrier. The commercial vehicle tyre business accounts for almost 20 p.

c. of Pirelli’s tyre turnover, in which the truck tyre factory in Alexandria/Egypt plays a key role. (The group also has commercial vehicle tyre production in Settimo Torinese/Italy, Izmit/Turkey and Santo André/Brazil).

The enterprise started in 1990 with a mere 11 p.c. Pirelli participation in the 150 million dollar investment.

And even that was not in hard cash but in know-how about building a new truck tyre factory and research and development data for the product. Other investors were local, both private and public finance consortiums. As Egyptian legislation was liberalised, it became possible for the Italians to increase their share to 60 p.

c. by capital raising measures and to take the industrial leadership. Only two years after the start of building the first truck tyre was produced at the Alexandria factory.

In 1995 the annual capacity was 100,000 truck tyres, today 330,000. In two investment stages capacity is to be increased to 550,000 tyres in the short term and to 800,000 tyres per year by 2003. But the plans do not only involve volume growth; new products are also part of the project, for instance the tubed tyres FG85 and TG85 for on/off application in Africa and the Middle East, introduced on the Truck Tyre Day 2000.

The total investment plan is for 140 million Euro. Currently only a third of the truck tyres produced in Alexandria go to export, but in future exports will account for about half the output. Read more in NEUE REIFENZEITUNG 5/2000.