Pirelli outlines 'value generating' programs

MILAN—Pirelli & Co. S.p.A has launched a series of "value generating" programs for the medium term which will include a brand-change project at Aeolus Tyre Co. Ltd. Both tire making companies are owned by ChemChina.

In its first quarter statement released at the end of May, the Italian tire maker said one of the measures it planned to implement will convert Aeolus capacity into Pirelli brand production and expedite the development of the business in China.

The Milan-based tire maker said the brand transition was "intended as a gradual switch in production."

This follows confirmation of plans by Pirelli to separate its industrial tire unit as Prometeon Tyre Group S.r.l (PTG) and Aeolous' announcement of its intentions to fully own PTG following its separation from Pirelli.

Additionally, Pirelli said it would strengthen its position along the entire value chain, through new capacity increases as well as trade- and consumer-engagement initiatives.

Pirelli also announced plans to accelerate "reduction in exposure to segment with low profitability." The company explained that premium tires "are becoming an ever bigger part of our output while standard tires (low profitability segment) is being reduced."

New activities, such as bike tires, are among other measures announced by Pirelli to add value.

As part of this effort, Pirelli also announced its return to cycling in May, with the launch of a new line of road racing bike tires, named PZero Velo.