YANZHOU, China-Pirelli Tyre S.p.A. has inaugurated production of passenger tires at a new factory adjacent to its joint venture truck tire plant in Yanzhou.
The 739,000-sq.-ft. plant, representing nearly $100 million in investments, opens with an initial annual capacity of 3 million high-performance tires, with expansion up to 10 million possible, Pirelli said. Employment at start-up is 1,000.
The plant´s output is destined primarily for China and other Asian-Pacific markets, the tire maker said.
The company marked the start of production at a ceremony Nov. 27 attended by Marco Tronchetti Provera, chairman of Pirelli & C. S.p.A.; Francesco Gori, CEO and general manager of Pirelli Tyre; Niu Yshun, chairman of Yinhe Group (Pirelli´s joint venture partner); Riccardo Sessa, Italian Ambassador to China; and other Chinese authorities.
Pirelli based its decision to build the factory on estimated annual Chinese gross domestic product growth of about 10 percent between 2008 and 2010, better road infrastructure and a trend toward lower prices because of increased competition and technology innovation.
Pirelli´s longer-term goal is to achieve a double-digit market share in China´s higher-end tire market, the company said. To that end, Pirelli said its distribution network should grow to more than 1,000 points of sale by year-end 2008.
The new plant uses the best nonrobotized technologies, Pirelli said, and has been conceived for production of mid-range, high-performance tires.
Pirelli also divulged at the ceremony that it had raised its ownership of the Pirelli Tyre Co. Ltd. (China) joint venture to 75 percent from 60 percent, buying the additional shares from Yinhe Group for about $16 million.
With the completion of the car tire plant, Pirelli´s work force in Yanzhou has doubled to about 2,000.