Pirelli buying Brazil's largest natural rubber firm

MILAN, Italy — Pirelli & C. S.p.A. has struck a deal to buy Hevea-Tec, a business considered the largest independent processor of natural rubber in Brazil, in a bid to ensure continuity of NR supply to its factories in Latin America.

The deal, subject to the approval of relevant antitrust authorities, carries an enterprise value of roughly $23 million, Pirelli said. Closing is expected before year-end. The company has plans to increase Hevea-Tec's production volumes.

Adding this business to its holdings will provide Pirelli the resources to launch innovative NR-based projects aimed at increasing the use of non-fossil-based materials in the tires, the company said, in line with its sustainability goals.

In addition, the acquisition will enable the company to further improve its control over the NR supply chain, reduce CO2 emissions thanks to local-for-local supply, and launch new Forest Stewardship Council (FSC) certification projects, an area where Pirelli already holds a first in its segment.

Hevea Tec's operations are on a 365,000-sq.ft. plot in Jaci, a municipality of about 7,000 residents located roughly 300 miles north of Sao Paulo.

The deal will be Pirelli's first direct engagement in the NR processing field, but the Milan-based tire maker is engaged in other sustainable efforts in the NR field, including:

• Teaming up with German car maker BMW Group and an Indonesian non-governmental organization (NGO) to support initiatives that favor the long-term production of sustainable and deforestation-free NR in Indonesia;
• Adopting a 12-step sustainable NR supply-chain policy in 2017 that it considers essential to preserve forests and biodiversity and to allow long-lasting development for local communities and economies;
• Participating in the Global Platform for Sustainable Natural Rubber (GPSNR), an independent platform designed to improve the socio-economic and environmental performance of the natural rubber value chain;
• Collaborating with General Motors Co. to establish a plan to source more natural rubber through environmentally sound and sustainable production.

Pirelli chronicles its sustainable efforts on the NR front on a digital platform dubbed "Being Fast Takes Time."