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Pirelli & C. S.p.A. has announced a deal with China’s Hixih Rubber Industry Group. Under this deal, Pirelli will buy 49% stake of Hixih Group’s new tyre manufacturing entity in Yanzhou, called as Jining Shenzhou Tyre.
Considering the importance and evolution of Chinese tyre market, the anticipated expansion of electric vehicles (EVs), this investment will add up to Pirelli’s production flexibility in the high-value tyre segment in Asia. It is learnt that as per the agreed terms of the deal, Pirelli is supposed to pay $75 million for 49% stake in Jining Shenzhou Tyre. Moreover, there is also a provision giving Pirelli the right to expand this stake up to 70% during the period of 2021 to 2025 in the future. However, the transaction is subject to the approval of relevant authorities and is supposed to be completed by the end of 2018, Pirelli informed.
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Further, Pirelli will also take control of the plant’s management. Jining Shenzhou plant has an annual capacity of 1.2 million radial truck tyres, 3 million high-performance bike tyres and 10 million car tyres, reported Hixih Group. Earlier in 2005, this plant was set up in the Yanzhou Hixih Industrial Park with the technical assistance from Pirelli.
According to Pirelli, Asia Pacific region is a key growth driver and requires continuous improvement of the product mix along with focus on environmental sustainability as well as digitization of processes.
About Hixih Rubber Industry Group:
The group was founded in 1989, it believes in high-efficient, high-quality and high-end product development. Hixih’s products are being exported to over 100 countries worldwide as of now. It has become a business group of International repute specializing and leading in rubber industry. The group has joint ventures with Fortune 500 companies such as Goodyear Tyre & Rubber Company of USA and Pirelli & C. S.p.A. of Italy among others.
