ROME (Dec. 3, 2009)—Pirelli & C. S.p.A. and Russian Technologies State Corp. are enlarging the scope of their 13-month-old cooperation agreement to include the acquisition of an existing Russian tire plant.
Pirelli and Moscow-based Russian Technologies formed a joint venture in November 2008 to oversee the construction of a car and truck tire and steel cord plant in Russia's Samara region. That project was valued at $430 million.
The parties said now they are evaluating a purchase from among “some potentially interesting Russian enterprises.” They anticipate making a purchase next year.
Pirelli Tyre CEO Francesco Gori presaged the announcement two weeks ago in a conference call with stock analysts.
Pirelli Chairman Marco Tronchetti Provera and Russian Technologies Director General Sergey Chemezov signed the expanded agreement today at a ceremony attended by Russian President Dmitry Medvedev and Italian Prime Minister Silvio Berlusconi.
The parties did not identify any of the plants they are targeting. Pirelli, however, already is involved with one other project, supplying mixing technology to tire maker Nizhnekamskshina.
The joint venture partners' new factory will be built in the Togliatti industrial technology park in Samara. The partners said they are waiting for Russian authorities to make a decision on a site or sites for production of automotive components; they expect a decision by the second half of 2010.
The new factory will be built in two phases, Pirelli said, starting with a factory for radial commercial vehicle tires followed by a factory for steel cord. At full annual capacity of more than 4 million tires, the industrial hub will employ about 1,500, Pirelli said.