MILAN, Italy (July 29, 2005) — Chinese authorities have approved Pirelli S.p.A.'s joint tire making venture with Roadone Tyre Co. Ltd. of Jinan, China, clearing the way for the two firms to proceed with plans to make radial truck tires at Roadone's plant in Shandong Province.
Pirelli said its initial investment in the venture would be about $70 million. Pirelli will own 60 percent of the venture, which will make tires for China and Southeast Asia.
All told, Pirelli said it will invest more than $180 million over three years in China to support the venture and its own expansion there. Pirelli said the Chinese market is the world´s fastest growing for road transportation with a total production in 2004 of more than 100 million radial tires.
RoadOne was established about two years ago by Chinese conveyor belt maker Yinhe Group. RoadOne´s existing plant has a capacity of 3 million truck tires a year.
Earlier Pirelli had discussed a venture with Aeolus Tyre, but those talks later hit an impasse and were ended.