Pirelli has reached an agreement with the Hixih Group, the signing of which is expected in the next few days, for the creation of a joint venture which will own, through the company Jining Shenzhou Tire Co., a new production plant for consumer tires in China.
“The investment will allow Pirelli to have the necessary production flexibility in the High Value segment – explains the company – taking into account the evolution of the Chinese market, the expected developments in the electric car segment and the growing share of approvals obtained in the original equipment in China, Japan and Korea”.
Based on the provisions, Pirelli will have the operational management of the plant and will acquire a 49% stake in the JV for approximately 65 million euros with the right to increase it up to 70% in the period between 1 January 2021 and December 2025.
The transaction, which is subject to obtaining the relevant approvals from the local authorities and whose closing is expected by the end of the current year, does not change the targets set in the 2017-2020 business plan.
"The acquisition of a significant stake in this technologically advanced plant for Consumer tires - continues the note - will strengthen the group's High Value strategy which sees the Apac area as a key growth factor through a strategy that provides for the continuous improvement of the product mix , the digitization of processes and constant attention to environmental sustainability”.
In the future, the new structure of the local Research and Development center will be concentrated in Yanzhou, in the Hixih industrial park, near the Chinese production hub of Pirelli, which will be able to count on the latest innovations and technologies. This will further strengthen Pirelli's operations in Yanzhou, which today represents one of the most advanced tire factories in the world, focused on the production of High Performance tyres.
