Pirelli and Hixih create China joint venture

Pirelli is to create a joint venture with Hixih Group, which will own, through the company Jining Shenzhou Tyre, a new consumer production plant in China.The Italian supplier will manage the operation of the plant and acquire a 49% stake in the JV for around EUR65m (US$75m) with the right to increase it up to 70% from 1 January, 2021 to December, 2025.

The transaction, which is subject to relevant approval from local authorities, is expected to close by the end of this year, leaves targets indicated in the 2017-2020 industrial plan unchanged.

"The acquisition of a significant stake in this technologically advanced consumer tyre plant will reinforce the group's High Value strategy, which identified the Apac area a key growth driver, through a strategy which calls for the continuous improvement of the product mix, the digitalisation of processes and constant attention to environmental sustainability" said a Pirelli statement.

"In the future, a new local structure for Research and Development, deploying innovations and technologies, will be concentrated in Yanzhou in the Hixih Industrial Park, near Pirelli's existing Chinese production hub.

"This will further reinforce Pirelli's operations in Yanzhou, which is today among the most advanced tyre manufacturing facilities in the world, focused on the production of High Performance tyres."