Pirelli (Milan), the Italian tire manufacturer, Russian Technologies, a Russian state-owned enterprise and SIBUR Holding today signed an agreement for the transfer of assets into a previously announced tire joint venture being formed between Pirelli and Russian Technologies. The joint venture will be the primary vehicle for the management of assets which will conform with Pirelli standards in the car and light truck sectors in Russia, in line with the terms of a memorandum of understanding (MOU) signed on November 26, 2010.
The agreement signed today calls for the transfer, by November 2011, of the Kirov plant, which has a current production capacity of more than 7 million tires for the car and light truck sectors, as well as a commitment to transfer further assets that would bring the jv’s production to 11 million tires by 2014. SIBUR will, in exchange, receive €222 million ($319.5 million) for the asset from Pirelli and Russian Technologies, shared equally by the two companies.
The MOU calls for joint activities between the partners in the field of tire and steel cord production, as well as production of other goods by processing synthetic rubber. The agreements should lead to the improvement in the efficiency of SIBUR’s tire business.
The second jv will be responsible for the production of automotive tires for the industrial sector as well as tires for heavy-duty trucks and agricultural machinery. It will aim to meet growing demand of the Russian market. The partners are currently trying to identify other SIBUR Holding plants, which would form part of the second jv.