MILAN, Italy (Sept. 4, 2013) — Pirelli & C. S.p.A. is considering changes in its upstream assets, pondering an investment in synthetic rubber with its Russian partner Rosneft Oil Co. and "evaluating the possibility of partnerships" in its steel cord business.
In Russia, where Pirelli and Rosneft are partners in a plan to open retail tire stores at Rosneft filling stations across Russia, the firms are also looking into further possible collaborations, including investment opportunities in the Nairit Plant C.J.S.C. synthetic rubber plant in Yerevan, Armenia, in which Rosneft is considering investing.
Rosneft President and Chairman Igor Sechin met with Nairit Plant management on Sept. 3 to discuss Rosneft's potential participation in chloroprene rubber production at Nairit.
"We see great opportunities in cooperation with our Armenian partners and we are also confident that there is a vast potential for strategic investments in Armenia," Mr. Sechin said, "which can give additional business and trade advantages to Rosneft and Russia."
It's not clear why Pirelli would be interested in investing in chloroprene rubber production.
Regarding steel cord production, Pirelli issued a statement regarding possible parnterships in response to a Tire Business inquiry about news reports from South Korea that indicated that country's Hyosung Group had approached Pirelli about parntering in or taking over Pirelli's tire reinforcement materials business.
Seoul, South Korea-based Hyosung Group describes itself as the world's No. 1 polyester tire cord supplier, with production in Brazil, the U.S. and Vietnam. Hyosung entered this business in 2006 by buying Goodyear's captive polyester cord assets.
It also operates steel cord plants in Eonynag, South Korea; Qingdao and Nanjing, China; Colmar-Berg, Luxembourg; Asheboro, N.C., and Scottsburg, INd.; and in Vietnam, with combined annual capacity of 160,000 metric tons.
Pirelli operates steel cord plants in Figline Valdarno, Italy, Izmit, Turkey; Slatina, Romania; and a joint venture plants in Yanzhou, China. It is closing capacity in Merzig, Germany, and installing capacity for steel cord in Argentina.
Steel cord represented 1.6 percent of Pirelli's global sales last year, or roughly $125 million. Sales were down 19.5 percent from 2011.