Pirelli supporting ‘High Value’ strategy in Latam with major investment
More than 250 million euros will be invested into Pirelli’s business in Latin America over the next three years in order to reinforce its ‘High Value’ strategy within the consumer tyre segment. The investment plan was announced by Marco Tronchetti Provera, executive vice-chairman and chief executive officer of Pirelli, during his visit to the company’s recently-upgraded Feira de Santana plant in Bahia – Pirelli’s first ‘4.0 hub’ in the region. The investment is included in the Pirelli 2017-2020 industrial plan.
The 250 million euros will cover the modernisation of production facilities within the region as well as the development of Pirelli’s High Value (prestige, new premium, specialty and super specialty tyres) business through the conversion of some of the company’s standard production to High Value. This conversion will be implemented in the three years to 2020 and represent about 20 per cent of the region’s High Value capacity by the end of this period. This capacity will satisfy both local and NAFTA market demand.
Pirelli has already invested approximately 250 million euros in Latin America over the past four years to upgrade its factories, adapt the Bahia plant to ‘new premium’ production and to digitalise production processes. Upgrades carried out at the Feira de Santana factory last year have transformed it into Pirelli’s first 4.0 technology hub in South America, and Pirelli’s other factories in the area are now being progressively modernised and involved in the digitalisation process in line with group strategy.
“Latam has always been a key area for Pirelli,” states Tronchetti Provera. “In particular, we have been in Brazil for almost a century, achieving an extraordinary level of brand awareness and knowledge of the market which enables us to capture consumer trends and offer products most suited to their needs in all market segments. The investments announced today (22 March 2018) will enable a further improvement in the production standards of local factories, in line with Pirelli’s High Value global strategy and with its digital transformation, which is an integral of it and which today is essential to competitiveness.”
“Pirelli is inaugurating a new phase in Latam with the introduction of new technologies, processes and advanced machinery which will allow us to meet the growing demand for products with high technological content which we can already see in the market, in particular from car makers with a local presence,” adds Paul Hembery, senior vice-president, Pirelli Latam. “Thanks to the digital transformation of the plants and the high-end focus, Pirelli can further strengthen its leadership in the Latam market and in Brazil, where for years we have won the Top of Mind prize (based upon the results of a survey conducted by the Datafolha Institute) as the most recognised brand in all sectors.”
With revenues in the Latam area growing 11.1 per cent last year to 915.7 million euros, South America today represents about 17 per cent of the group’s 5.35 billion euro total revenues and is one of the most strategically important macro-areas for the group.
In Brazil, as in Europe and China, Pirelli is the replacement market leader for new premium car tyres (rim diameter ≥18´-inch) and in premium for motorcycles. Pirelli’s presence in the country is supported by a commercial network of over 2,000 points of sale; more than 2,300 points of sale now operate throughout Latin America, and Pirelli intends to expand the network to around 3,300 by the end of 2020.