Sustainability Channel

Versalis signs agreement with Pirelli for joint research project on guayule-based natural rubber

Versalis (Eni) and Pirelli have entered into a Memorandum of Understanding (MoU) to kick off a joint research project for the use of guayule-based natural rubber in tire production.

The research project will run over a period of three years. On an exclusivity basis, Versalis will provide an innovative range of guayule-based natural rubber materials, while Pirelli will carry out trial tests to validate the performance of the materials for tire production.

As soon as new industrial quantities become available, Versalis will supply Pirelli with guayule-based natural rubber to complement the current set of synthetic rubber that Versalis is already supplying to Pirelli for the production of conventional tires.

The agreement with Pirelli follows the announcement of a milestone partnership between Versalis and Yulex Corporation USA for guayule production and for the construction of an industrial complex to be based in Southern Europe.

Guayule (Parthenium argentatum) is a renewable, non-food crop that requires little water usage, no pesticides and is an alternative source of natural rubber thanks to its latex allergy-friendly properties, unlike Hevea rubber.

The agreement is consistent with Versalis’ strategy of pursuing partnerships with key leaders in the field of bio-based chemical products. The agreement is also part of an overall plan to drive a solid integration process between a range of innovative technologies and the current portfolio of conventional products with a particular focus on the elastomers business, all of which is critical to improving Versalis’ competitive edge at the international level.

The agreement with Versalis integrates and extends Pirelli’s commitment in the search for new materials from renewable sources and especially from biomasses. Pirelli, which already produces tyres with raw materials derived from rice husk (the inedible part of the grain usually used as fuel), aims to gradually reduce the heavy reliance on fossil resources, replacing them with alternative raw materials which induce better performance and match up with higher standards of environmental sustainability in terms of processes and products.

“This new partnership between Versalis and Pirelli builds on a series of initiatives to develop technologies for tire applications with a focus on performance and energy efficiency. Both companies are well-established industry leaders at an international level; they represent a sound model for undivided commitment to all levels of research, including the green sector,” said Daniele Ferrari, Chief Executive Officer of Versalis.

“Pirelli has always been dedicated to the development of innovative solutions that prioritize sustainability, and this means safety and respect for the environment. In this regard, it is essential to prioritise research on renewable raw materials, an area where we hold industry leadership at an international level. The research project into guayule-based natural rubber is one of our key activities that fully engages our team of researchers; it also underlines the strategic importance of long-standing partnerships like the one we have announced today with Versalis,” said Maurizio Boiocchi, Chief Technical Officer of Pirelli.

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2012: Profitability target achieved

Milan, Pirelli & C. SPA SpA Board approves 2012 results

PIRELLI & C. SPA BOARD APPROVES 2012 RESULTS

RECORD PROFITABILITY THANKS TO FOCUS ON PREMIUM AND EFFICIENCIES

2012 PROFITABILITY AND NET FINANCIAL POSITION TARGETS ACHIEVED

TOTAL INVESTMENT 471 MILLION EURO

RETURN ON INVESTMENTS (ROI) 19.2%

STRONG NET PROFIT GROWTH

PIRELLI & C. GROUP

- EBIT: +34.2% AT 780.8 MILLION EURO (581.9 MILLION EURO ON 31 DECEMBER 2011)

- OVER THREEFOLD EBIT INCREASE IN LAST 3 YEARS, +212% FROM 250 MILLION EURO IN 2009 ON LIKE-FOR-LIKE BASIS

- BIT MARGIN GROWS TO 12.9% FROM 10.3% ON 31 DECEMBER 2011 (COMPARED WITH TARGET OF “ABOUT 13%”)

- NET PROFIT: +27.4% TO 398.2 MILLION EURO (312.6 MILLION EURO IN 2011 BEFORE NON-RECURRING IMPACTS) ). TOTAL NET PROFIT IN 2011 WAS 440.7 MILLION EURO AFTER A POSITIVE IMPACT OF 128 MILLION EURO LINKED TO DEFERED TAXATION
- REVENUES: +7.4% TO 6,071.5 MILLION EURO ( 5,654.8 MILLION EURO ON 31 DECEMBER 2011)

- PREMIUM SEGMENT GROWTH CONTINUES: REVENUES +20.9% TO 2,075.4 MILLION EURO AND VOLUMES +12.6%

- NET FINANCIAL POSITION NEGATIVE 1,205.2 MILLION EURO , A MARKED IMPROVEMENT COMPARED WITH 1,868.8 MILLION EURO ON 30 SEPTEMBER 2012 (COMPARED WITH TARGET OF “ABOVE OR EQUAL TO 1.2 BILLION EURO”)

PIRELLI TYRE

- EBIT: +25.7% TO 809.1 MILLION EURO (643.9 MILLION EURO ON 31 DECEMBER 2011)

- EBIT MARGIN GROWS TO 13.4% FROM 11.5% ON 31 DECEMBER 2011

- CONSUMER BUSINESS EBIT MARGIN AT 14.3% (12.5% ON 31 DECEMBER 2011)

- INDUSTRIAL BUSINESS EBIT MARGIN AT 11.1% (9.1% ON 31 DECEMBER 2011)

- REVENUES: +7.7% TO 6,031.3 MILLION EURO ( 5,601.6 MILLION EURO ON 31 DECEMBER 2011

- BOARD TO PROPOSE TO SHAREHOLDERS THE DISTRUBITION OF A DIVIDEND OF 0.32 EURO PER ORDINARY SHARE (0.27 A YEAR EARLIER) AND 0.39 EURO PER SAVINGS SHARE (0.34 EURO A YEAR EARLIER)

- BUYBACK PROPOSAL TO SHAREHOLDERS APPROVED

- NOTHWITHSTANDING STRONG RESULTS’ GROWTH, MANAGEMENT WILL NOT RECEIVE THE VARIABLE BONUS FOR THE YEAR 2012 BECAUSE THE THRESHOLDS OF ACCESS IN THE INCENTIVE PLAN WERE NOT REACHED

***

2013 TARGETS

CASH GENERATION BEFORE DIVIDENDS POSITIVE AND ABOVE 200 MILLION EURO, EQUAL TO ABOUT 3% OF SALES

NET FINANCIAL POSITION BELOW 1.2 BILLION EURO

INVESTMENTS OF ABOUT 400 MILLION EURO, OVER 70% OF WHICH EARMARKED FOR THE PREMIUM SEGMENT, MIX AND QUALITY ENHANCEMENT. AT THE END OF 2013 PREMIUM CAPACITY WILL BE 33 MILLION PIECES (48% OF THE TOTAL), OF WHICH 63% LOCATED IN LOW COST COUNTRIES AND 60% IN NEW FACTORIES

CONSOLIDATED EBIT BETWEEN 810 AND 850 MILLION EURO WITH A MARGIN IN LINE WITH OR SLIGHTLY HIGHER THAN 2012 AFTER HAVING FINANCED:

- RESTRUCTURING COSTS OF AROUND 30 MILLION EURO

- GREATER MARKETING AND COMMERCIAL COMMITMENTS AIMED AT IMPROVING THE COMPETITIVE POSITIONING IN THE PREMIUM SEGMENT

- INDUSTRIAL COSTS FOR THE CONVERSION OF CAPACITY FROM STANDARD TO PREMIUM AND DEVELOPMENT IN RUSSIA AND MEXICO

- GROWING DEPRECIATION RELATED TO THE INTENSE INVESTMENT ACTIVITY OF THE LAST TWO YEARS AND THE WIDENING OF THE PERIMETER FOR NEW ACQUISITIONS

CONSOLIDATED EBIT WILL INCLUDE CONTRIBUTIONS FROM:

- THE CONSUMER BUSINESS WITH A MARGIN OVER 14% ON SALES FORESEEN AT AROUND 4.6 BILLION EURO

- THE INDUSTRIAL BUSINESS WITH A MARGIN OF AROUND 12% ON SALES OF AROUND 1.7 BILLION EURO

TOTAL REVENUES FORESEEN AT BETWEEN 6.3 AND 6.4 BILLION EURO DERIVED FROM:

- VOLUMES WHICH ARE EXPECTED TO GROW BETWEEN 3% AND 4%. PREMIUM WILL DRIVE DEVELOPMENT WITH A GROWTH RATE BETWEEN 13% AND 14%

- PRICE/MIX BETWEEN +4% AND +5%

- EXCHANGE RATES AT AROUND -4%

Pirelli, Russian Technologies joint venture launches technologically advanced second production line at Voronezh

WITH 56 MILLION EURO INVESTED SO FAR, THE VORONEZH TYRE PLANT IS THE MOST MODERN TYRE PRODUCTION FACTORY IN RUSSIA. A FURTHER 44 MILLION EURO PLANNED INVESTMENT BY 2015

TOTAL INVESTMENT BY 2015 WILL BE 100 MILLION EURO, AS ALREADY ANNOUNCED TO THE MARKET

LAUNCH ATTENDED BY RUSSIA’S MINISTER OF INDUSTRY AND TRADE DMITRY MANTUROV, VORONEZH’S REGIONAL GOVERNOR ALEXANDER GORDEEV, RUSSIAN TECHNOLOGIES’ GENERAL DIRECTOR S.V. CHEMESOV, PIRELLI CHAIRMAN AND CEO MARCO TRONCHETTI PROVERA

Pirelli SpA and Russian Technologies today announced the launch of a second production line at their joint venture’s Voronezh plant in southwest Russia. The new production line – Voronezh 2 – has been upgraded to Pirelli’s advanced technological standards and will enable the production, from March 2013, of the compounds needed to produce Pirelli premium high performance tyres, especially for the Winter segment.

The launch ceremony was attended by Minister of Industry and Trade of the Russian Federation Dmitry Manturov and the Regional Governor of Voronezh Alexander Gordeev, as well as Russian Technologies General Director Mr. S.V. Chemesov and the Chairman and CEO of Pirelli Mr. Marco Tronchetti Provera.

The plant’s modernization included the installation of new equipment, fully compliant with Pirelli’s quality standards, and required an investment of about 56 million euro in 2012. As well, the specialists at Voronezh were able to update their skills through training programs at Pirelli factories in Italy, Turkey and Germany.

By working together, Pirelli, Russian Technologies and the Voronezh Regional Administration have made Voronezh Tyre Plant the most modern tyre production factory in Russia in just one year. And there are plans to invest a further 44 million euro by 2015, when the plant will reach its full production capacity of 4 million tyres per year.

The total investment in Voronezh will therefore be 100 million euro, as already announced to the market by Pirelli in its 3-year industrial plan.

Mr. Manturov, said, “The project successfully implemented in Voronezh by Pirelli and Rostec shows that the Russian provinces have great economic potential which should be used for attraction of foreign investors.”

Russian Technologies’ Chemezov said: “This project is quite significant for Rostec. Our foreign colleagues’ experience and technology made us be sure that Voronezh Tyre Plant could be quickly reequipped and make world-class tyres. We managed to attract foreign partner and practically revive Voronezh enterprise by high-standard retooling. This will help us save current employment and also create additional jobs,”

“Voronezh Tyre Plant is an enterprise of special social and economic importance to Voronezh Region. We are pleased to see that provinces attract major international business and we are ready to provide all possible support,” said the Governor of Voronezh Region, A. V. Gordeev.

“Russia is a key strategic market for Pirelli. Voronezh Tyre Plant is a splendid example of a symbiotic collaboration between the Russian authorities, industry, and the experience and technology of an international company. We intend not only to produce world-class premium tyres that meet the needs of the Russian consumers, but also to create a large and efficient logistics center at the Voronezh tyre plant which will deliver to domestic and export customers,” said the Chairman and CEO of Pirelli & C. S.p.A., Marco Tronchetti Provera.

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