Pirelli to open retail stores in Russia

MOSCOW (April 24, 2013) — Pirelli & C. S.p.A. and Rosneft Oil Co., a leading Russian oil and gas concern, have agreed to work together to build a network of premium tire stores at Rosneft's branded filling stations throughout Russia.

The first store, which will operate under the "PZero Platinum" name, will open before year-end at Rosneft's filling station in Sochi, Russia, site of the upcoming 2014 Winter Olympics, the partners said.

Rosneft President and Chairman Igor Sechin and Pirelli Chairman and CEO MarcoTronchetti Provera signed a memorandum of understanding recently that covers the companies' goals and pushes forward their strategic marketing and commercial agreement signed last December.

The agreement also envisages the development of other points of sale at selected Rosneft filling stations and the implementation of "Safe&Go" tire check-ups at selected Rosneft filling stations.

The companies did not disclose specifics as to the number of stores they expect to open, a timetable of how quickly they would roll out or a budget to build them. They did, though, say their focus initially would be in the Krasnodar Region where Sochi is located to take advantage of exposure provided by the Olympic Games, of which Rosneft is a partner.

The company operates 1,800 filling stations in Russia.

Mr. Sechin said the memorandum "underscores the parties' commitment to long-term cooperation…. We believe implementation of Pirelli's production and services will make Rosneft filling stations even more appealing to customers and thus will make the partnership beneficial for both Rosneft and Pirelli."

Mr. Tronchetti Provera said having a local partner "as prestigious as Rosneft will enable us to reach, with their guidance and support, every valuable corner of the country effectively and relatively quickly."

Pirelli sees Russia as a key market because of the expanding car market, particularly in the premium segment, the Italian tire maker said. The premium segment is forecast to grow 5.2 percent this year and 8.5 percent in 2014, vs. 2 and 2.1 percent for the general market, according to a Global Insight study that Pirelli cited.

As a part of its international expansion strategy, Pirelli has acquired and is operating through a joint venture tire plants in Voronezh and Kirov, Russia.