Known for its style, speed and performance marketing values, Pirelli & C. S.p.A. is a multinational company based in Milan, Italy, listed on the Milan Stock Exchange since 1922, with a temporary privatization period by the consortium led by the Chinese state-owned enterprise ChemChina.
The Wall Street Journal Europe has published a list of Europe’s top 500 companies, ranked on value of sales last year. Tyre manufacturing is represented by three companies. These are Michelin (number 118) with sales of 15.77 billion Euro, Continental (158 – sales 11.23 bn Euro) and Pirelli (217 – sales 7.50 bn Euro). To put this in perspective, the number one-ranked European company was BP, which had sales of 197.8 bn Euro.
The European Investment Bank is evaluating a proposal to fund up to $39 million USD toward the modernisation of a Pirelli tyre plant in Brazil – Pirelli Pneus S.A. The Brazilian subsidiary has drafted a $136.6 million USD plan to add radial production capacity to its 25 year old plant in Feira de Santana plant.
Pirelli SpA has announced that it is providing technical support for a $60 million USD expansion project by JSG Nizhnekamskshina, Russia’s biggest tyre manufacturer. Pirelli are also planning to open a commercial company in Moscow.
Pirelli have selected Mammoth Tyres to handle their earthmover tyre business throughout England and Wales. This key dealership appointment brings a wealth of knowledge and experience on which Pirelli intend to significantly increase their market share. The Founders of Mammoth Tyres, Joe Freese and Ivor Knights have been involved with earthmover tyres for over 35 years and can provide the very best in EM supply and service. In 1988 Mammoth joined forces with the County Tyre Group who themselves have a wealth of expertise in this specialist sector of the tyre industry.
In an interview with Neue Reifenzeitung, Dr. Francesco Gori, who is head of the tyre divisions worldwide, revealed that in 2001, Pirelli achieved almost the same turnover and EBIT figures as it had in 2000. In the future, Pirelli will invest more in passenger car tyres and less in the truck tyre business, but will not sell the Truck Division. Pirelli is successful with truck tyres mainly in southern Europe and Latin America. From July 1st, Pirelli will change the terms of its agreement with its alliance partner Cooper in the USA and will once again resume full responsibility for the Pirelli brand. In Europe, the company is optimising its structure, moving responsibilities increasingly towards its Milan headquarters, to oversee European operations as a single market.
Cooper Tire & Rubber and Pirelli have announced the restructuring of their three-year-old alliance in the US market. The object is to improve the competitive strength of both companies and both agree that, while the alliance had proved generally positive, a new approach would be beneficial in pursuing separate brand strategies. From July 1st, Pirelli will resume responsibility for sales and customer servicing of the Pirelli brand in the USA, while Cooper will continue to manufacture certain sizes of Pirelli tyres for sale in the US, as well as providing logistics support. The two companies will investigate the feasibility of Pirelli manufacturing selected UHP Cooper tyres in the future. It is intended that the transition regarding existing Pirelli dealers will be smooth, ensuring that customer service is not adversely affected. The changes in the alliance are mutually acceptable and both companies continue to regard themselves as partners in technical and other related matters. D. Richard Stephens, President of Cooper Tire, and Francesco Gori, General Manager, Pirelli Tyre Worldwide, issued a joint statement, as follows: “Our companies have learned to know and appreciate each other since the beginning and are looking forward to a new and different phase of our alliance which will benefit customers for both brands.” Under the terms of the original alliance, signed in February 1999, Cooper managed the sales and distribution of tyres in the replacement markets of the USA, Canada and Mexico. Pirelli developed products for the US market and strengthened brand awareness via participation in motorsports.
The three-year-old alliance between Cooper and Pirelli is to be restructured to improve competitiveness. Pirelli has said that it will resume responsibility for sales and service of the Pirelli brand in the US. Cooper will continue to manufacture selected Pirelli products in the US. The original agreement in February 1999 was for Cooper to manage the distribution and sales of passenger and light truck tyres in the replacement markets of the US, Canada and Mexico.
According the information given in the March issue of the in-flight magazine “Rono Iberia” of the Spanish airline Iberia the Italian tyre manufacturer Pirelli is looking for beautiful Italian women – “anonymous” if possible – for its next year’s calendar production. It is planned to add nude pictures of a “national beauty” to the list of celebrities who have appeared in previous editions. “Rondo Iberia” says that a prestigious photographer will select the winner among ten candidates previously chosen by a jury.
For the fourth year running, Michelin ranks highest in the UK OE tyre satisfaction study, receiving the highest ratings for durability; the factor rated as most important by UK consumers. In second place were Pirelli and Kumho, with the latter scoring well because owners experience few problems with the brand. The survey questions over 3,000 UK motorists in their first year of car ownership, regarding tyre quality, performance and brand image. Following the top three brands, three further brands (Bridgestone, Dunlop and Goodyear) al scored the same. Bridgestone received highest marks in the study for traction/safety, while Goodyear and Pirelli tied for top spot in tyre design.
Pirelli’s German MIRS factory is now producing OE tyres for the Mini-Cooper car in size 205/45 17 Eufori@. Production is running with three lines and two others are being built, which will be producing tyres at the end of the year. Ultimately, in late 2004 or early 2005, there will be 13 lines producing 1.5 million high performance tyres a year, mainly for OE. At present, there are 50 people working in the MIRS factory and this will eventually rise to 250, including service staff. Total costs will be more than 100 million Euro and possibly as high as 120 million; Pirelli will not reveal the exact figure. MIRS makes it relatively easy for Pirelli to grow steadily in certain markets over a period of time, and this is the main advantage of the process, as it is not necessarily cheaper than the conventional production of UHP tyres. The first MIRS factory in Milan is a prototype plant, which develops and creates opportunities for new products. As well as Höchst, there is a MIRS factory at Burton-on-Trent, UK, which is not as large, and another MIRS plant at Rome, Georgia, USA is under construction. The plan to build a MIRS factory in Latin America has been abandoned, but Pirelli could build a plant in Japan, although no specific plans for a production base in Japan for OE business have been revealed.
Dr. Paolo Masera (60), who was MD for Pirelli in the UK for a short time and MD for Pirelli in Germany twice; the second time for only a few months, went to Brazil early in 2001. He now is back in Italy again to take over another leading position in Milan.
Pirelli has announced a 32 per cent fall in operating profits for 2001 to 295 million Euro (2000: 437 m). Revenue was broadly similar at 7.5 billion Euro (7.48 bn). The company blamed a slump in the telecoms cable sector. Pirelli’s shares have been up and down, falling 18 per cent in the past month. Rumours of bad results led to a 4 per cent fall last week, but when the results were published, there was a partial recovery of 1.6 per cent.
John McNaught, 52, has been appointed managing director of Bridgestone/Firestone UK and will assume his role on Monday 4th February. He has worked in the UK tyre industry since 1976 when he started with Goodyear. He moved to Central Tyres, part of the Pirelli organisation, in 1985, rising to the position of operations director and then switched to National Tyre Service, part of Continental, as a regional director. Mr McNaught became the managing director of National Tyre Service in 1998 and managed the sale of the business in 2001. Since August last year he has worked as director of commercial products for Continental Tyres. Bridgestone’s marketing director, Chikuma Otsuki has been acting managing director since the retiral of Jim Wilson.
Indonesian telecommunications company PT Telkom has awarded a contract to Pirelli and Siemens for the construction of a fibre-optic network in Sumatra. The network will span Sumatra from east to west (2,000 km) and also link with the island of Batam, 20 km from Singapore. The contract, which is worth 70 million Euro, is the first for the Pirelli/Siemens partnership, which was established in May last year.
Pirelli is to spend more than 11 million Pounds on extending its factory at Carlisle in the UK to manufacture tyres for 4WD vehicles. For some time, Carlisle has been Pirelli’s “centre of excellence” for SUV tyres and the factory produced 530,000 SUV tyres last year. The new investment will see this figure rise to 1.1 million next year and eventually to 1.6 million. 80 per cent of these will be exported to Europe and the USA. Carlisle also produces high performance tyres and total unit production at the plant will reach 4.25 million units in 2002.
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