Pirelli plant to close as part of Brazil investment

Pirelli is investing in production modernisation in Brazil, and as was recently the case at Goodyear in Germany, there are winners and losers. The latter includes the workforce at the company’s motorcycle tyre plant in Gravataí, Rio Grande do Sul, which is expected to close sometime in the next couple of years.

A 120 million euro investment, additional to the 320 million euros spent between 2013 and 2018, will be made in the Pirelli factories in Campinas and Feira de Santana between 2019 and 2021. Both facilities will be modernised and converted from the production of standard tyres to producing high-value tyres.

The Campinas plant, which currently only makes car tyres, will by mid-2021 gain the production that now takes place in Gravataí. The reorganisation will turn the site into car, motorcycle and motorsport tyre plant serving markets in Latin America. Pirelli says bringing production together there will permit the optimisation of production processes and logistics flows, thanks in part to the Campinas plant’s location, which is in the vicinity of car and motorcycle OEMs. Around 300 people will be hired in Campinas by 2022.

The Gravataí plant currently employs around 900 people. Pirelli says it will work to “take all possible actions to mitigate the social impact at the Gravataí plant.” A first step towards this is collaborating with Prometeon Tyre Group, which operates a truck tyre plant in Gravataí, to “reciprocally evaluate actions aimed at mitigating the effect on employment”, taking local market considerations and the competitiveness of each company’s respective business into account.

The funding for the reorganisation is mainly derived from Pirelli’s signing of ‘Patent Box’ tax concessions in October 2018.

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