FEIRA DE SANTANA, Brazil (Sept. 18, 2003) — Pirelli S.p.A. has started production of radial passenger and light truck tires at a $120 million plant in Feira de Santana that will become a primary source of tires for Pirelli Tire North America Inc.
The new 344,320-sq.-ft. plant, located adjacent to an existing plant in Brazil's Bahia state, starts with a daily output of 2,500 tires and will grow steadily to 7,500 tires by 2005, according to Giorgio della Seta, president of Pirelli's operations in Brazil. Initially the plant is making the company's Cinturato P4, Scorpion and P6 models, destined for sale in the domestic, Latin American, North American and European markets, Mr. della Seta said.
A second-phase expansion, for which no time frame was released, will take daily capacity to 13,000 units at a further cost of $80 million. Pirelli bought the existing Feira de Santana plant, which makes bias-ply passenger, light truck and medium truck and bus tires, in 1986 from Cia. Pneus Tropical.
“We are augmenting our production capacity to meet the market needs,” Mr. della Seta said at the plant inauguration ceremony Sept. 12. Brazilian President Luiz Inacio Lula da Silva was on hand to mark the occasion.
The plant employs 360 at start-up, augmenting 300 who work at the older factory.
The new plant is equipped with the latest generation machinery, Mr. della Seta said, which guarantee high productivity and high quality. The plant is not, however, equipped with Pirelli's MIRS (Modular Integrated Robotic System) manufacturing technology.
The plant's location near the port of Salvador, Bahia, enhances its role as an export-oriented manufacturing site, said Carlos Redondo, CEO of Pirelli Tires in Latin America. It also is located about 35 miles from Ford Motor Co.'s new Camacari assembly complex.
The new plant joins five existing Pirelli plants in Brazil, where the firm makes about 18 million tires a year. Together with units in Venezuela and Argentina, Pirelli registered sales of $750 million in Latin America in 2002. Pirelli has been making tires in Brazil since 1940, when it opened the Santo Andre plant near Sao Paulo.
A portion of the funding for the new plant—up to $40 million—came from European Investment Bank, which indicated it supported the project because of Pirelli's plans to observe European standards for environmental protection in building and operating the plant.
Among environmental measures Pirelli said it is using are the use of natural gas instead of oil to fuel the plant, a liquid effluent treatment station and establishment of a refuse disposal plan that will be open to other industries in the region.