Pirelli to Begin Tire Manufacturing in Russia

Italian tire manufacturer Pirelli today announced a new agreement with the Russian government to build a new production facility in Samara, with an estimated capacity of 4.2 million units per year. Pirelli says production is due to start in Russia before the end of 2010, with construction of the new building scheduled for summer 2009. The whole investment costs approximately 300 million euros, Pirelli said in a press statement.

“The agreement was signed officially today in Moscow by Pirelli & C. SpA Chairman Marco Tronchetti Provera, and by Russian Technologies Director General Sergey Chemezov, in the presence of Italian Prime Minister Silvio Berlusconi and Russian Federation President Dmitri Medvedev, during the Italy-Russia summit.”

Negotiations were started a few months ago and targeted “the creation of a jointly-controlled joint venture which will operate in the territories of the Russian Federation and the Commonwealth of Independent States,” as mentioned in Pirelli's press statement.

This is the second major investment in Russia announced this month, with General Motors earlier announcing a $300 million assembly plant to be built in St. Petersburg and providing a production capacity of 70,000 units per year plus 1700 new workers.

“We are fully committed to our Russia growth strategy,” said Carl-Peter Forster, President of General Motors Europe at the time of signing the deal with the Russian government. “Russia is poised to become Europe’s Number One car market for GM as early as 2009. With five strong brands on the market, we are the leading non-Russian manufacturer. That’s a position we aim to keep.”

For more information regarding the agreement between Pirelli and the Russian government, check out the attached PDF file.