MILAN, Italy (Aug. 1)—Chinese authorities have approved Pirelli S.p.A.´s joint tire making venture with RoadOne Tyre Co. Ltd. of Jinan, China, clearing the way for the two firms to proceed with plans to make radial truck tires at RoadOne´s plant in Shandong Province.
Pirelli said its initial investment in the venture would be about $70 million. Pirelli will own 60 percent of the venture, which will make tires for China and Southeast Asia.
All told, Pirelli said it will invest more than $180 million over three years in China to support the venture and its own expansion there. Pirelli said the Chinese market is the world´s fastest-growing for road transportation with a total production in 2004 of more than 100 million radial tires.
RoadOne was established about two years ago by Chinese conveyor belt maker Yinhe Group. RoadOne´s existing plant has a capacity of 3 million truck tires a year.
Earlier Pirelli had discussed a venture with Aeolus Tyre, but those talks later hit an impasse and were ended.