Pirelli to invest $100M in Brazil for OTR, ag tyres

ERJ staff report (TB)

Sao Paolo, Brazil -- Pirelli & C. S.p.A. will invest $100 million in Brazil through 2012 to expand production capacity there for agricultural and OTR tyres to satisfy growing demand throughout Latin America for such tyres.

The investment is in addition to $200 million the company committed to Brazil earlier this year to expand passenger and light truck tyre capacity there.

The latest investment will go toward making the firm's Santo Andre, Brazil, plant a manfacturing and technology hub for farm and OTR tyres, Pirelli said. Capacity for these tyres should grow 40 percent, the company said.

In disclosing the investment, Pirelli pointed to what it sees as 25-percent growth in Latin America through 2013 for these specialised type tyres, including 37-percent growth in Brazil alone. Globally, Pirelli sees demand for these OTR tyres growing 7.5 percent annually for the next several years.

Pirelli cited several large infrastructure works on the continent - such as the new Panama Canal, works related to the 2016 Rio de Janeiro Olympics and the World Cup Soccer games in Brazil in 2014 - for its optimistic outlook.

In 2008 South America represented one-third of Pirelli Tyre's global sales. Pirelli operates seven factories in South America, including five in Brazil, and employs about 11,400.

From Tire Business (A Crain publication)