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Pirelli focuses on win-win business model

China Daily | Updated: 2019-04-25 09:46
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Employees work at a Pirelli production facility in Yanzhou, Shandong province. [Photo provided to China Daily]

Tire maker plans to establish new projects based on reciprocal growth

Editor's Note: ChemChina acquired a 65 percent stake in Italian tire maker Pirelli in 2015, with an investment of 7 billion euros ($7.87 billion). In light of the recent agreement signed in Rome at the end of March to formalize Italy's endorsement of the Belt and Road Initiative, China Daily interviewed Enrico Verdino, chief technology officer of Pirelli APAC, to elaborate on the win-win business model that characterizes projects advanced within the initiative, with mutual benefits on both sides.

What's your view of China's Belt and Road Initiative?

In recent weeks, Italy has attracted worldwide attention by becoming the first country of the G-7 to formally join the Belt and Road Initiative. The Belt and Road Initiative represents an extraordinary and comprehensive opportunity to develop deeper mutual knowledge of different cultures and to establish new and fruitful cooperation projects based on reciprocal growth and a win-win perspective.

How do you view China-Italy relations? What are the potential areas of cooperation between the two countries under the framework of the Belt and Road?

China and Italy have a long history and attach great importance to the inheritance of civilization, which is the foundation for mutual understanding and long-lasting friendship between the two countries. I firmly believe that in the future, Italy and China will work together to forge a closer comprehensive strategic partnership in economic, cultural and other aspects. President Xi Jinping said in his signed article that "Made in Italy" is synonymous with high-quality products, stressing that China will open wider to the outside world and share opportunities in the Chinese market with other countries, including Italy. This is a great historical opportunity for Italian companies such as Pirelli.

What has Pirelli done for China-Italy communication under the framework of the Belt and Road?

Pirelli is important member of the Business Forum Italy-China, or BFIC, a permanent committee of top managers established under the patronage of the Chinese and Italian governments in 2014.

Through the chairmanship that Pirelli shared with Bank of China until the end of 2018, the group plays an active part in advancing the dialogue between the countries' business communities and promoting the development of bilateral economic relations also at the regional level.

In particular, the BFIC seeks to promote dialogue and concrete projects related to the implementation of the Belt and Road Initiative, as expressed in the joint declaration signed by the co-chairmen of the forum in Beijing on Feb 22, 2017 in the presence of Chinese President Xi Jinping and Italian President Sergio Mattarella. In the context of China's opening-up, the BFIC aims to stimulate a multilevel dialogue and support the identification of concrete cooperation projects. To do so, it plans targeted and regional initiatives, designed to shed light on the strengths and excellences present in both economies and contribute to building synergies between these.

To fulfill its objectives, the BFIC also promotes the organization of numerous high-profile initiatives, alongside official state visits and meetings, on ad hoc topics of bilateral interest, such as the SME Forum in May 2017 on the occasion of the visit of Italian Prime Minister Paolo Gentiloni to China's BRI summit.

In June 2018, the SME Trade and Investment Forum, a forum designed to promote regional-level cooperation between SMEs, was held in Dalian in Liaoning province and Qingdao in Shandong province, and played an important role in helping Italian companies discover the economic opportunities present in the provinces. The forum saw 1,000 business-to-business entities and over 400 business proposals, as well as the signature of two memorandums of understanding for economic and trade cooperation - also with Shandong.

Also, a number of seminars and conferences have been organized in Italy during the past few years with the support of China's Ministry of Commerce and Italian institutions to promote the Belt and Road Initiative.

Can you give a basic outline of Pirelli Yanzhou, its recent business growth and your plans for the next stage of development?

Pirelli's Yanzhou Plant was put into service in 2005. The plant now has the annual capacity to produce 7 million high-end car tires and 1.3 million premium motorcycle tires. It employs more than 3,000 people, and is one of the best-managed, most cost-effective and high-quality production plants in the world.

In the past 13 years, Pirelli's Yanzhou Plant has produced more than 60 million tires. Currently around 80 percent of production is high-value tires, it supplies original equipment tires to the Chinese factories of many top automakers, including Mercedes-Benz, BMW, Audi and Volvo, as well as serving the increasing demand from the replacement market.

In 2018, Pirelli invested in a new consumer tire production plant in China through a joint venture with Hixih Group. The new plant, which was put into use at the beginning of 2019, will give Pirelli the necessary production flexibility in the high-value segment, addressing the evolution of the Chinese market, the expected developments in electric vehicles and the growing share of homologations obtained in the original equipment segment in China, Japan and South Korea.

Also a new R&D center, deploying the latest innovations and technologies, is under construction in Yanzhou in 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 tire manufacturing facilities in the world, focusing on the production of high-performance tires.

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