Pirelli invests another 68 million euros in Oltenia

Italian tyre maker Pirelli, which owns a tyre factory and a metallic cord factory in Slatina, will invest 68 million euros this year to develop it activities in Romania. Total investment in the company will go up from 167 million euros in 2007 to 235 million euros at the end of 2008.
Company representatives explained that most investments were directed towards the construction of the tyre plant in Slatina, where construction work started in 2004. A significant part of this year’s funds will also be directed towards the production of anti-pollution filters in Gorj.
“Pirelli has developed a high-tech automotive industrial centre in Romania. In 2008, we will complete the initial 170 million-euro investment in Slatina, while in Targu Jiu Pirelli will invest 25 million euros in the factory that will make anti-pollutant filters for diesel cars,” stated Enrico Malerba, general manager of Pirelli Romania.
According to a Pirelli report, production systems for the first assembly line are now being built, with the factory’s capacity set to reach 670 tonnes of anti-pollution filters a year. Work on the factory in Targu Jiu is now past the excavation and building construction phase.
At the same time, the company worked to develop a centre in Slatina, with production set to increase by the end of the year and reach 3.8 million tyres, from about 1.9 million tyres in 2007, whilst the number of employees will reach more than 1,200.
“The completion of these investments requires lots of effort on the part of our company in 2008 and will materialise in buying new equipment and in arranging or completing new structures within the tyre factory, such as the Mixing Room, the section where raw material is prepared for making the final product,” Malerba said.
He had previously stated that Pirelli would complete the over 200 million euro investment thus far with a new tyre factory in 2008, which was to be built in close proximity to the factory that is already operational in Slatina. The new investment, which Pirelli’s chairman Marco Tronchetii Provera himself mentioned last year, would boost the company’s production capacity from 5.5 million tyres to about 10 million tyres and would require another 200 million euros. The other two tyre makers, Continental and Michelin will make 13 million and 4.6 million units this year.
Whereas 95% of the output used to be exported until now, the Italians are looking to boost operations on the Romanian market by 2010, and reach a 10% market share from the current 4 or 5 %.
“Pirelli intends to reach a 10% market share over the next few years. This can happen not only by making new investments but also by improving the sales network. The relationship with our customers is extremely important to us, which is why we are thinking of focusing on the distributors of our products, first,” Malerba added.
Pirelli tyres are distributed by independent specialist sellers in Romania, such as Primat Gold and Pneurom. The volume of the tyre market was put at 2.5 million units this year (including second hand tyres), which means that in order to achieve a 5% market share, Pirelli has to sell around 125,000 tyres in Romania.