MERZIG, Germany-Pirelli Tyre Holding N.V. and Continental A.G. will rebuild a jointly owned steel cord plant in Merzig heavily damaged by fire in mid-December.
The facility's subsequent shutdown means the loss of up to 1,200 metric tons of steel cord a month through at least the middle of this year, according to Pirelli. The company already has boosted production at sites in Italy, Turkey and Brazil to try to cover demand.
Rebuilding the unit, Drahtcord Saar GmbH, will cost as much as $131.5 million, according to Continental, although this will be covered almost entirely by insurance.
The cause of the Dec. 13 fire was a broken ventilator fan shaft, which resulted in the fan blades scraping the sides of the housing. This produced a shower of sparks that ignited sound insulation material surrounding the fan. The fire spread quickly to nearby polyvinyl chloride pipes.
None of the unit's 600 employees was injured in the fire. More than 150 local fire fighters fought the blaze for more than three hours.
By running overtime production in Italy, Turkey and Brazil, Pirelli estimates it can cover 800 to 900 tons of the output lost at Merzig. Some Merzig employees transferred temporarily to Italy to help out.
A water purification plant commissioned only a few weeks earlier was credited with keeping polluted run-off from the fire fighting from entering the nearby Saar River.
Clean-up efforts started in early January, and the company anticipates the facility will go back on stream by mid-year.
Drahtcord Saar was established in 1972 as a joint venture involving Pirelli, Conti and Dunlop. Dunlop sold its one-third share in 1984 after being acquired by Sumitomo Rubber Industries Ltd., leaving Pirelli and Conti as co-owners.