SANTO ANDRE, Brazil (July 6, 2009)—Pirelli S.p.A. will spend $200 million through 2011 at plants in Brazil to expand capacity for car and motorcycle tires there by 20 percent.
The new investment is on top of $100 million invested last year and is intended to help the company boost sales in Brazil by 10 percent in the coming two years, company executives said.
Of the $300 million budgeted for the 2008-11 period, $200 million is being spent on manufacturing and the rest on research and development, Pirelli said. The three-year investment matches $300 million Pirelli invested in 2004-07
Pirelli did not say in which plants it will make the investments. Pirelli makes car tires at four plants, in Santo Andre, Campinas and two in Feira de Santana, and motorcycle tires at two plants, in Santo Andre and Gravatai.
Pirelli's sales in South America grew 21 percent from 2005 to 2008, exceeding $2 billion last year. Brazil represents more than 60 percent of this, Pirelli said. South America represents one-third of Pirelli's global tire sales.
The Italian company is targeting 10 percent growth in Brazil through 2011 despite an expected down year this year in light of the global economic crisis.
Pirelli said investing in Brazil at this time makes sense because the Brazilian economy has been less affected, and Brazil offers a competitive base for exports.
Pirelli employs 2,200 in Santo Andre in both manufacturing and research and development and 9,600 total in Brazil.