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Joint-venture for Tyre production in China completed

Pirelli’s initial investment, as majority shareholder in
the new company, amounts to approximately 70 million
dollars

Milan, 29 July 2005 – The joint-venture agreement between
Pirelli and Roadone Tyre Co. Ltd, announced on 16 June 2005, was
completed today having obtained the approval of the competent
Authorities.

The joint-venture, majority owned by Pirelli with approximately 60%
of the share capital, has as its goal the production of radial
truck tyres in the Shandong Province. The new company will serve
the Chinese market and others in South East Asia. Pirelli expects
to make an initial investment in the joint-venture of approximately
70 million dollars (approx. 60 million euros).

Pirelli thus confirms its strategy of expansion in the Chinese
market, where it plans to invest approximately 150 million euros
over the next three years, as announced in November 2004. The
Chinese market is the world’s fastest growing for road
transportation with a total production in 2004 of more than 100
million sets of radial tyres, representing approximately 50% of the
overall tyre output in China, with a 33% increase over the previous
year.

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