The deal, with Russia's Rosneft L.L.C. and Oil Techno, relates primarily to SBR, the predominant tire polymer. Financial terms were not disclosed.
Under the terms of the memorandum of understanding, Rosneft will be the leading investor in the SBR operation in Armenia, and Oil Techno will be the local partner. Pirelli will cooperate jointly with Rosneft in R&D activities to develop SBR and is interested in entering into a long-term supply agreement to purchase the SBR produced at the site.
The firms also reference SBR's use in reduced rolling resistance, which would be a reference to solution-polymerized SBR, although the companies' press releases don't state this specifically. There is one SR plant in Armenia, in Nairit.
Igor Sechin, president and chairman of the management board of Rosneft, said: “The realization of the project will promote the revitalization of the rubber industry in Armenia and will help strengthen Armenia's economy and industrial capabilities to compete in the world market.
“Moreover this memorandum is an example of strengthening ties between Armenia and Russia following trade agreement ratification.”
The head of Pirelli Russia L.L.C., Aimone di Savoia, said: “This MOU to develop a new source of synthetic rubber is another sign of our commitment to and belief in Russia and the Russian market. It is also the fruit of our growing relationship with Rosneft, one of our key partners in the region.”
Rosneft is the leader of Russia's petroleum industry and ranks among the world's top publicly traded oil and gas companies. The firm primarily is engaged in exploration and production of hydrocarbons, production of petroleum products and petrochemicals, and marketing of outputs.
This agreement is in addition to a joint R&D deal Pirelli signed in November with Rosneft and Rostec State Corp. covering synthetic rubber, reinforcing materials and fillers such as carbon black, all developed in compliance with Pirelli's technical standards.
Pirelli and Rostec are partners in Pirelli Tyre Russia, which operates tire plants in Kirov and Voronezh, Russia. Pirelli owns 65 percent of the venture, which is expected to generate $350 million in sales this year.
Pirelli and Rosneft are involved in a separate project to build a network of premium “PZero Platinum” tire stores at Rosneft's branded filling stations throughout Russia.