GTR.Cover.qxd:Layout 1 - European Rubber Journal

More documents

Recommendations

Info

GLOBAL TYRE REPORT Pirelli sets out mid-term strategy At an investor day in London, 9 Nov, Pirelli’s management set out ambitious targets to meet in the coming five years. Plans call for over €2200 million in capital investments, taking the brand to be leader in the premium segment wherever premium tyres form a significant part of the local market. By David Shaw, ERJ Staff, dshaw@crain.com Pirelli is aiming to be the world leader in the premium tyre segment in 2015. The company is investing significantly in car tyre expansion projects throughout Europe, Russia, China, Latin America and North America as part of the effort to achieve this goal. Meanwhile, the truck segment, motorcycle and other segments will also benefit from new investment. The company also intends to select more carefully the OE tyre projects it takes on, and to improve its communication links with the market as part of its bid to raise EBITDA margins in the tyre business to 19 percent - 20 percent by 2014 from 15 percent today. To deliver this, the company has an ambitious capital expenditure prgramme. Pirelli announced a new joint venture plant in Indonesia to make motorcycle tyres, and gave further details on its previously-announced projects in Mexico, Argentina and China. The company also gave a more detailed run-down of its expectations in Russia. Although Pirelli’s plans are based on an optimistic assessment of the global economy, the company ‘ said it has Pirelli plans to add 24 million units of premium tyre capacity worldwide in addition to 8m in Russia by 2015, bringing Pirelli’s total capacity to 84m units ’ Marco Tronchetti Provera x not ignored the possibility that current difficulties in the Eurozone may trigger a global financial crisis, and has developed a contingency plan which can be brought into play if car OE sales fall by more than 10 percent, and if the truck business declines by around 20 percent. Pirelli’s underlying optimism is based on the simple premise that the premium segment is growing faster than the global car tyre market. That applies in the developed world, but more significantly, the premium segment is growing rapidly in the emerging economies. Pirelli said this does not yet apply in India, but the company continues to monitor this market. Not only that, but the company says there is a global shortage of tyre capacity in the premium segment. To take advantage of this, said Marco Tronchetti Provera, CEO of the Pirelli group, Pirelli plans to add 24 million units of premium tyre capacity worldwide in addition to 8 million in Russia by 2015, bringing Pirelli’s total capacity to 84 million units. In its previous plan, Pirelli said it would add 26 million units by 2015. The updated plan will involve capital expenditure of €2200 million (excluding Russia) from now to 2015. Technologies respond to market demand Although capacity expansion is the most glamorous side of the global ambition, the company also wants to develop technologies to support its push for increased global presence. One of the main programmes for development will be in winter tyres aimed at the Pirelli’s China plant to be company’s biggest YANZHOU, SHANDONG, CHINA – Pirelli said its plant in Shandong Province will, at some point in the next four years, become the company’s biggest, taking the bragging rights from Pirelli’s unit in Izmit, Turkey. Francesco Gori, speaking to ERJ on the sidelines of the company’s strategy meeting for analysts, said the Yanzhou plant will become the company’s biggest measured by tonnes of output. He said by 2015, the Yanzhou plant will have capacity for 9 million units of passenger car tyre production; just over 1 million units of radial moto tyres; just under 1 million units of radial truck tyres and steelcord production as a joint venture with Yinhe Group. Nordic and Russian markets. “This is huge,” said Tronchetti Provera. In the Russian market, Pirelli expects to increase significantly its penetration in the winter tyre segment. The company said it places a high priority on attaining top-rated assessments in independent magazine tests of winter tyres. It is especially keen to enter such tests where the audience is premium magazines and also where the audience is based in Russia. Pirelli has 18 major winter tyre projects in 5 years compared with 16 in the last 10 years. Overall, said Tronvchetti Provera, winter tyre capacity will increase by 40 percent between now and 2015. If the Russian factories are included, winter tyre capacity will be up by 90 percent. Furthermore, to help develop the products requested by the market, the comapny aims to set up a network of regional R&D facilities which have high speed data links and rapid communication with the main R&D centre in Milan. These smaller, regional units can help translate information received from the dealer Pirelli establishes one of two JVs with Russian Technologies LONDON – Pirelli will only form a single joint venture with Russian Technologies, instead of the two previously announced. Marco Tronchetti Provera told analysts that the second joint venture is no longer being discussed. In response to a question from ERJ, Tronchetti said the JV is frozen, and Pirelli is available to supply technology if the venture should be revived. The company said two principals were no longer discussing the venture, Pirelli’s activities in Russia will now focus on a single joint venture covering three factories. One plant is in Kirov and two in Voronezh. The venture is now signed and Pirelli owns 50 percent, while Russian Technologies owns 24.99 percent and the Fleming family owns the remaining 25.01 percent. The two Voronezh plants are jointly expected to produce 2 million units of premium passenger cars in 2012, increasing to 4 million in 2014, and by 2015 will produce only Pirelli brand tyres. To achieve this, Pirelli will invest €100 million in the period from 2012 - 2014. Investments will cover a new mixing room, new finishing area and improved quality control. The two factories in Voronezh are adjacent to each other. One was built many years ago and is fitted with old equipment. The other was specified by Vredestein engineers before its Russian partner, Amtel-Vredestein went bankrupt. The buildings were finished, and equipment purchased, but the equipment was not installed and no tyres have been produced. The Kirov plant will receive a similar level of investment in the same period. In 2012, the Kirov plant is expected to produce 6.5 million units, in mixed brands. Pirelli expects the plant will make 60 percent Pirelli brand tyres by 2015. Investments include a new mixing room, new finishing area and improved quality systems. Overall, said Pirelli, 80 percent of sales in Russia and CIS region wil be produced in Russia by 2015. Marco Tronchetti Provera, CEO, said Pirelli will exit the ‘C’ segment of the market immediately and focus mainly on the ‘A’ segment with some activity in the ‘B’ segment. E U R O P E A N R U B B E R J O U R N A L NOVEMBER/DECEMBER 2011
www.europeanrubberjournal.com Marco Tronchetti Provera (left) with Francesco Gori at the company’s factory in Izmit, Turkey network into products which the market is really requesting, said Maurizio Boiocchi, head of R&D at Pirelli. He added that Pirelli has a model of working with external agencies such as universities and research centres to leverage its own internal resources more effectively. Among projects currently active at Pirelli, said Boiocchi, is an effort to improve the robustness of the company’s truck tyre casings, so as to make them more attractive Pirelli to build JV plant for radial moto in Indonesia to retreaders and hence to fleet operators. By 2012, the company expects to make the first commercial generation of its cybertyre technology available to truck fleet managers. This will allow the tyre to send data about pressure, lifetime, history and other operational conditions to a central unit, which can then monitor usage and use the data to optimise tyre purchase and maintenance patterns. A second generation will come to market in 2015, and Pirelli is currently working with premium car makers such as Maclaren, Volvo, Ferrari to fully integrate the system with vehicle electronics. Boiocchi said that in the Sales, earnings up at Pirelli LONDON – Pirelli intends to build a €66 million plant to make moto tyres in Indonesia. Details are still being finalised, but Marco Tronchetti Provera, CEO said the company intends to form a joint venture with a local partner called PT Astra Otoparts Tbk and will select a site in the coming weeks. The unit is expected to be on stream in 2013 and to be making 7 million units/year in both radial and cross-ply constructions by 2016. The venture will focus on radial segment for small motorcycles in the 50cc - 250cc engine range with some 500cc, with projected markets in Indonesia and the rest of Asia as well as exports to the US and the EU. He said the radial market in Indonesia is developing quickly, and the venture hopes to take advantage of the move toward radialisation. Indonesia is one of the world’s largest markets for motorcycles. Francesco Gori said the tyres are relatively small compared with the supersport products being made in Breuberg, and which will be made in the new China moto plant. ‘ Pirelli has a model of working with external agencies such as universities and research centres to leverage its own internal resources more effectively ’ Maurizio Boiocchi industrial segment, Pirelli’s efforts will focus on the real needs of the customers: more mileage; fuel efficiency and a 30 percent improvement in retreadability. Eventually, he said, Pirelli would add winter fitments to its existing range of truck tyres. These would increase traction in snow by over 20 percent. The company also said it has access to a new silane which offers better stability and processability in compounds based on silica and Solution- SBR. Furthermore, the company’s Brazilian plant is using silica derived from rice husks, and this is likely to meet the needs of 30 percent of Pirelli’s Latin American production by 2015. ■ MILAN, ITALY – Pirelli has posted sales of €1265.8 million in the first nine months of 2011, up 17.9 percent year-onyear. Earnings (EBIT) were €451.2 million, up 46.8 percent. Profitability rose to 10.6 percent from 8.5 percent, the company said in an 8 Nov results report. Net profit was €251.3 million, up 56.8 percent. In the tyre business, Pirelli reported sales of €4225.7 million, up 18.7 percent compared with the first nine months of 2010. Earnings (EBIT) were €484.4 million, a 44.9 percent rise from 2010. Profitability in the sector was a “record” 11.5 percent, Pirelli said. Pirelli revised its 2011 sales target down to “below” €5.8 billion from previous targets of “above” this figure. Pirelli tyre revenue was revised to about €5.7 billion, down from “above €5.8 billion.” Pirelli attributed this revision to the negative effect of exchange rates, volume reductions and reduction of sales of lower profit products, as well as the slowdown in truck demand in the EMEA region. NOVEMBER/DECEMBER 2011 E U R O P E A N R U B B E R J O U R N A L xi
Page 1: TyreReport GLOBAL 2011 A PUBLICATIO
Page 4 and 5: GLOBAL TYRE REPORT Top 75 tyre firm
Page 6 and 7: GLOBAL TYRE REPORT www.europeanrubb
Page 8 and 9: GLOBAL TYRE REPORT Two years on, ab
Page 12 and 13: GLOBAL TYRE REPORT Singhania (right
Page 14 and 15: GLOBAL TYRE REPORT CRIA outlines di
Page 16: GLOBAL TYRE REPORT www.europeanrubb
Page 19 and 20: www.europeanrubberjournal.com Group
Page 21 and 22: www.europeanrubberjournal.com Compa
Page 29 and 30: OWNERSHIP IN THE TYRE COMMUNITY www
Page 31: www.europeanrubberjournal.com JK Ty

GTR.Cover.qxd:Layout 1 - European Rubber Journal

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?