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New steel cord factory set up in Romania

&#8226 PIRELLI SETS UP NEW
STEEL CORD FACTORY WITH CONTINENTAL IN ROMANIA

&#8226 THE NEW PLANT WILL HAVE A 30,000 TON OUTPUT PER
YEAR TO SERVE EAST EUROPEAN MARKETS

Slatina (Romania), 22nd July 2005 -
Pirelli and Continental opened today in Slatina, in the presence of
local authorities and representatives of both companies, the steel
cord production plant of Cord Romania, the joint-venture 80% owned
by Pirelli and 20% by Continental created on October 2004.

The factory is located on a 100,000 square meter area and has 350
employees with a yearly output – once fully operative – of 30,000
tons of steel cord which will be destined for the fast growing East
European markets. Steel cord is used by tyre producers as main
reinforcement material for radial tyres.

The new facility will require an investment of 40 million euros
over several years and will allow Cord Romania to meet growing
demand – already almost two times supply – for this key tyre
component in the area.

Thanks to Cord Romania, Pirelli will strengthen its position on the
European steel cord market, integrating offer from plants in
Figline Valdarno (Italy), Merzig (Germany) and Izmit (Turkey). This
investment – the first ever made by Pirelli Tyres in the Balkan
region – is part of the Company’s expansion strategy in Romania.
This strategy will result in the opening by 2006 of a new big High
Performance Car Tyre plant in Slatina, which will serve the fast
growing demand from the East European markets.

For Continental, the new investment builds on its already
considerable presence in the region and will provide a competitive
new source of steelcord to help meet its growing demand.

The new initiative also strengthens cooperation between Pirelli and
Continental in the manufacture of this key tyre component, where
Drahtcord Saar – the 50-50 joint venture based in Merzig – has been
present for more than 30 years.

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