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Pirelli opens new tyres factory in Brasil

PIRELLI INAUGURATES NEW TIRE FACTORY IN
BAHIA

President Luiz Incio Lula da Silva takes part in the
inauguration of another Pirelli plant in Brazil, where the company
is a market leader.


Pirelli inaugurates, on September 12, its new Feira de Santana
factory in Bahia. With a primary investment which amounts to about
US$ 120 million, the plant has 32,000 square meters of constructed
area. The initial daily production corresponds to 2,500 high
performance radial tires, which will be destined to the domestic
and Latin-American markets, as well as the American and European
ones. We are augmenting our production capacity to meet the
market needs, states the president of the Pirelli Group in
Brazil Giorgio della Seta. In 2005, when the factory will be
producing at full operating capacity, approximately 7,500 tires
will be manufactured a day. On a second phase, investments of more
than US$80 million are already delineated, which will allow the
increase of the capacity of production to 13 thousand tires a
day.

Pirelli has been installed in Feira de Santana since 1986, when it
took over Cia. Pneus Tropical and commenced to manufacture
conventional tires for trucks, light trucks, passenger cars and
buses. The new plant was built next to the existing factory and
gained automated process controls, as well as latest generation
machinery, which guarantee high productivity together with high
quality level. Among other products, from the passenger car lines
to the recreational (sports cars) ones, the new plant will
manufacture the Cinturato P4, the Scorpion and the P6 for the Nafta
market, which are all successful launchings of the company.

Feira de Santana is the second commercial pole of Bahia.
Strategically located, the pole makes it possible for Pirelli to
promptly meet the needs of the several replacement markets. In
addition to this, we already own a plant there which has a high
performance and outstanding industrial cultures, together with an
old relationship with the municipal district. This friendly
liaison determined our choice concerning the best place for the
enlargement of our production capacity, reinforces the CEO
of Pirelli Tires in Latin America, Carlos Redondo. The further
important advantages are the proximity to the modern port of
Salvador, which will facilitate the export logistics and the
closeness to the Camaari industrial pole, where the firm
already possesses one of its assembly centers.

Future Expectations The installation of the new factory
allows us, in the short run, to create 360 jobs, besides the 300
existing ones at the old plant. All the collaborators were
recruited in the region, including those who worked in the civil
construction, which resulted in an immediate and positive impact in
the commerce, transportation and service areas. The new
employees technical training has been prioritized: the firm
implemented a comprehensive program of professional improvement
that consisted of 20 hundred training hours, put into practice
together with some regional entities.

The new plant also reflects Pirellis environmental concerns.
At that place, some environmentally-friendly projects are being
developed in order to substitute oil burning by natural gas, in
addition to the implementation of a new liquid effluent treatment
station, which enables us to recuperate 95% of the water from the
household and the process consumption, and the construction of an
industrial embankment for the refuse that will benefit all the
industries of the region.
The investments in Feira de Santana wont remain at the
current level. Pirelli Tires has an enlargement project for the new
plant which, in the future, should augment our production capacity
and, consequently, increase the personnel. Pirelli has
always laid its bet on the future of the country and this is one
more proofthat Latin America and Brazil especially
is a priority for the Group, adds Giorgio della Seta.

History – The Pirelli Group has been operating in Brazil for almost
75 years. Its activities began in 1929 in Santo Andr (SP),
initially producing power cables. In 1940, it also began
manufacturing tyres for trucks in the same location and,
subsequently, in Campinas (SP), tyres for automobiles. In the
seventies, it inaugurated the Gravata plant (RS),
responsible for the production of tyres for motorcycles, and the
Sumar plant SP (steel cords). At that time, the
cornerstone of the Feira de Santana (BA) plant was laid down, where
the new production line is being inaugurated.

Currently, the Pirelli tyre sector produces in Brazil,
approximately 18 million tyres per year, employing about 6,200
people in five plants that, together with the Guacara and Merlo
units in Venezuela and Argentina respectively, registered a
turnover of US$750 million in 2002. The Cable and Systems sector
operates in Brazil four plants, all in the State of So
Paulo, where about 1000 employees work in the production of cables
and systems for the Power and Telecommunications sectors. Together
with the Argentina unit, last year approximately US$230 million
were invoiced.

TECHNOLOGY AND INVESTMENT IN THE HUMAN FACTOR GUARANTEE
QUALITY

The new plant unites qualified professionals with the most
advanced equipment for the tire production

The new Feira de Santana factory is one of the most modern of the
Pirelli Group in the world. Not only the equipment but also the
productive process has been carefully studied so that the plant can
operate in a safe way, manufacturing tires that will be exported to
extremely demanding markets, such as the United States one.
The increase in productive capacity of the Feira de Santana
will enable Pirelli to reach higher efficiency and flexibility. And
these will be possible thanks to investments in advanced technology
and in the development of its human resources, two elements that
characterize the firm’s policy, states the industrial
director of Latin America Frederico Muraro.
When the issue is human factor, one of the main allies of Pirelli
is the Centro de Educao Tecnolgica do
Estado da Bahia (CETEB), where most of the new employees where
selected. The region has a great potential with highly
qualified people thanks, mainly, to the Centro work, which has been
receiving constant support from Pirelli. It is an institution that
values the potential of human beings through knowledge and this is
very important for our company, Muraro puts in relief.
Another aspect that confirms Pirelli’s philosophy of investing in
its employees development is concerned with the wide
training program, internal and external, implemented by the Human
Resources area, and characterized mainly by the knowledge exchange
among the employees of several Pirelli plants. In 2003 over 20
thousand training hours were realized, also including courses given
in Santo Andr and Campinas, where two of the biggest Latin
American factories are located. This experience exchange
makes the responsibility for the development of the new factory be
shared also by employees from other plants, expanding the team work
concept and enhancing several aspects of the human
relationship, adds Muraro.
TECHNOLOGY – Parallel to the development of new employees, Pirelli
has also invested in technology. One visit to the new plant is
enough to see what the most modern technologies in this segment
are. In Banburys, the rubber compounds elaboration indicates the
beginning of tire manufacturing and, as all the processes, receives
special attention from Pirelli. The mixture of materials like
oils,polymers, rubbers, lampblack and the other chemical products
is made automatically, according to the specific quantities for
each kind of compound.
From this stage on, new processes begin in the semi-finished area.
Feira de Santana has modern rubber extrusion lines that produce
rolling bands, flanks and the other profiled which are used later
in the process of tire manufacturing. The Quadruplex Extrusion
Line, for example, has electronic devices that control profiles,
weight, width and velocity, eliminating automatically the parts
which do not follow the specifications.
At this production stage the preparation is also made, the
rubberizing and the cutting of the textile and steel fabrics which
coat the tires. In the calanders and cutters installed in Feira de
Santana, this process is, once more, monitored automatically by the
latest generation systems for the materials weight and thickness
control. And that is not all. The beads made of steel cords that
tie the tire to the vehicle’s wheel rim are also produced by
machines which have computerized systems that allow simultaneous
outlets, besides the possibility of obtaining various
geometries.
At the building phase, an innovative technology has been implanted
by Pirelli, which has installed in that place unique phase
confecting machines. These machines construct the tire carcasses by
adding all the semi-ready produced in the previous phases. From
then on, the vulcanization process begins, in which the carcasses
are given the final shape of the tire, after being molded in high
tension and high temperature presses, controlled and monitored by
sophisticated equipment and softwares that guarantee the process
precision and uniformity.
Before leaving the factory, the tires are always submitted to a
final control, firstly manual and then automatic. Technology is
once more present at this stage: computerized machines verify the
product uniformity, in order to guarantee its distribution within
the required quality specifications. Feira de Santana is
gaining a factory that aggregates the tradition and the know-how of
Pirelli to the most sophisticated and efficient means of tire
production. This is a bet the company lays on a project that could
be a reference to the other Pirelli plants in the world,
adds Muraro.


AN ODISSEY OF CHALLENGES AND ACHIEVEMENTS

The integration of Pirelli with Feira de Santana is one of the
main aspects of the plant, which records important achievements in
different areas.

The history of Pirelli in Feira de Santana has been characterized
by challenges since the firm acquired, in 1986, Cia. Pneus
Tropical, which belonged to the company J. Macedo, inaugurated ten
years before. In the last 17 years, the plant celebrated different
achievements in different areas. We have a commitment that
is not only limited to manufacturing high quality tires; our
responsibility goes beyond the firm gates. We need to be important
not only to the clients who purchase our products, but also to each
inhabitant of a community where our factory is inserted,
explains the plant manager Eugnio Croxatto.
Pirellis trajectory in Bahia shows that this
commitment has always been a priority to the firm, he
adds.
And we don’t lack examples that prove the close relationship the
factory has with the community, which publicly acknowledges the
firm contribution. In 1993 and 1995, Pirelli was awarded with the
Environment Vigilante prize, conceded by the City
Hall, due to its environmentally-friendly policy. In 1994, it
received the ECO94 prize, delivered by the American Chamber of
Commerce in recognition of the Life Quality
Communitarian Participation in Cholera Prevention, which
involved around 1,500 people among employees and family members.
Three years later the National Confederation of Industry conceded
to the plant the National Energy Conservation award, which resulted
from the excellent results obtained after the substitution of the
hot water system in the vulcanization line by a system with inert
gas (nitrogen). The US$ 212 thousand investment provided the plant
with an economy of 17% in the fuel total consumption, that is,
about 950 tons of oil a year.
Other important social initiatives are related to the cultural
area. One of the most significant symbols of Bahia received a
contribution from Pirelli Feira de Santana, which in 1995 adhered
to the campaign Pelourinho, mankind patrimony. Everybody has
to preserve. Recently, the plant sponsored the recuperation
of the Igreja dos Remdios and the Igreja So
Jos das Itapororocas, one of the oldest temples of the
region, built in 1653. The plant typical activities also includes
the participation in the Inter Pirelli Campus, a project that
promotes the well-being of, in Brazil, about 4000 young people
(aged 8 to 14) from impoverished communities. In Feira de Santana
alone, over 250 children are granted sports education, school
activity accompanying and basic orientations on hygiene and health,
besides a series of initiatives implemented with the aid of
regional entities, such as Universidade Estadual de Feira de
Santana.
The Centro de Educao Tecnolgica do Estado
da Bahia (CETEB) also illustrates the importance Pirelli gives to
the local community. Created in 1998 by the Bahia state government
together with the private sector of the Feira de Santana region,
aims to attend to the increasing demand for skilled labor force in
the region. Among 27 other companies, Pirelli participates actively
in the deeds promoted by the Centro, considered to be responsible
for the remarkable growth of the professionals quality level
in Feira de Santana. Most of the employees who were recruited to
work at the new Feira factory, for instance, were hired via CETEB.
The figures corroborate the efficiency of this initiative: the
municipal district occupies, currently, the second place in the
state ranking with the best index of skilled labor force, being
surpassed only by Salvador. However, it leaves Camaari
behind, one of the biggest industrial poles of Bahia.
The same seriousness that characterizes the relationship with the
local community is also a trademark of Feira de Santana when the
issue is overcoming challenges, principally those ones related to
quality, which is commitment number one at Pirelli. In 1997,
following the Groups policy, Feira de Santana implemented
the Quality Management System and managed to be certified with the
ISO 9001. Four years later, it celebrated new achievements: the
QS9000, ISO/TS16949 and the ISO 14001 certificates. Now, it is
ready to obtain, in June 2004, the OHSAS 18001 certificate, which
attests another equally important commitment defended by the plant:
being a model firm also in terms of safety and health at
work.
XAPURI It is at the Feira de Santana plant that Pirelli
manufactures the Xapuri tire, launched in 2000. Produced with 100%
natural rubber from Acre, the product is the result of an important
initiative sponsored by Pirelli. Implemented in 1998, the Xapuri
project contributed to the sustainable development of the
impoverished communities from Acre, in the northern region of
Brazil. By means of a technical cooperation agreement with two
cooperatives from the Sena Madureira and Xapuri region, the
initiative takes care of the local labor force training and
promotes the installation of modern equipment, in order to improve
the extraction, production and chemical treatment of raw rubber
plates. With the aid of Pirelli technicians, the rubber gatherers
of the region have learned how to produce high quality rubber.

IN LATIN AMERICA, PIRELLIS PRESENCE IS EVEN MORE
SIGNIFICANT

Quality, productivity, environment and security are all
valued aspects for Pirelli in all its units

Latin American markets represent about 25% of sales in the tire
sector for Pirelli around the world. In relation to 2001, the
company sales increased 10% last year, helped by the rise of
exportations. Besides commercial aspects that prove the strategic
importance of Latin America, figures are also expressive in the
industrial area. In 2002, for example, one out of three tires
commercialized around the world was produced by one of the South
American Units of the Group, which also keeps fifteen other
factories in the other continents.
Besides Feira de Santana, Pirelli Tires keeps six other factories
in Latin America: Santo Andr, Campinas, Gravata and
Sumar in Brazil; Guacara in Venezuela; and Merlo in
Argentina. Apart from that, it also has commercial offices in
Chile, Colombia and Mexico and also a wide range of retailers,
which only in Brazil, covers 700 sales points.
In the country, Pirelli is a prominent leader in the original
equipment market. Almost half the vehicles produced in Brazil leave
the factory equipped with Pirelli tires. In the rest of Latin
American countries, the company participation has been increasing
year after year mainly in Argentina and Venezuela.
RESEARCH AND DEVELOPMENT – Among the 600
researchers, project leaders and professionals connected to
research and development, 130 are in Latin America. Santo
Andr is the seat of the main Pirelli R& D area around
the world, which works in an integrated fashion with the rest. In
this way, each new product that Pirelli launches to the world has
passed through technical analysis in Brazil, where tests, studies
and evaluations are carried out. That is why, when the question is
pioneering, Brazilian Pirelli does not lack examples, because the
company allots 2.6% of its billing to research.
The company was responsible for the installation of the first
manufacturers test track in Latin America in 1988. Situated
in the city of Sumar, the test track occupies an area of
45,000 m2 and counts with an infrastructure, which allows the
realization of endless kinds of evaluations, including off-road
tires.
CERTIFICATIONS – The company was also the first
tire manufacturer in Brazil to possess its quality system certified
by the norms ISO 9001, in 1993. In Argentina and Venezuela, Merlo
and Guacara units followed the same track and obtained their
certifications in 1995 and 1998, respectively. Another historical
conquest comes from Japan. Brazilian Pirelli is the only tire
manufacturer in the continent to receive the Total
Productivity Maintenance granted in 1996 by the Japanese
Institute JIPM – Japan Institute of Plant Maintenance, one of the
best companies in the world in the area of industrial
efficiency.
When the question is security and environment, Pirelli also stands
out. From 1998 to 2001, all the Brazilian factories went through
rigorous auditing and achieved the ISO 14001 certification, which
certifies the efficiency of environmental management implemented in
all the units.
The same attention was given to certification processes OHSAS
18001, related to the management system in the area of health and
work: Santo Andr, Campinas, and Gravata have
already certified their systems. Sumar is getting ready for
the final auditing in November this year, as well as Feira de
Santana, which should be recommended in June 2004, when the final
auditing will take place.
AROUND THE WORLD – Considered to be one of the
five largest manufacturers around the world, Pirelli Tires employs
today 20,000 people, in 22 factories, located in ten countries and
a hundred twenty commercial offices that cover all
continents.
Inaugurated in 1940, Pirelli Santo Andr (SP) is the seat of
the largest factory of truck and bus radial tires of the Pirelli
group around the world. It also manufactures tires for agriculture,
off the road, tubes, flaps and employs 1400 people.
The largest plant of radial car tires and derivatives of the group
in Latin America is situated in Campinas (SP). The Sumar
Unit (SP) in use since 1984 employs 206 people. It is focussed on
the production of metallic cords used in the manufacture of radial
tires.
Gravata Unit (RS), which is in an expansion phase, has 1400
employees and has come to be the largest moto tire factory of the
whole group. Its production started in 1976 and is turned, mainly,
to the manufacturing of tires for motorbikes, motorcycles, scooters
and bicycles as well as conventional tires for cars, pick-ups,
buses, trucks, industrial vehicles and front tractors.
Feira de Santana (BA) closes the cycle of the industrial units in
Brazil. Conventional tires for cars, buses, light and heavy trucks
are produced there, as well as car radial tires and SUV radial
tires (sports utilitarian vehicles). Previously called Cia
Pneus Tropical, it was acquired by Pirelli in 1986.
In Argentina, the Merlo Unit (Buenos Aires province) produces
radial car tires and conventional truck tires. Founded in 1955, it
has at present 518 employees. The youngest member of the Latin
American group is situated In Venezuela. Opened in 1990, the
Guacara unit employs 455 people and produces conventional and
radial tires for cars and pick-ups.

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