Oct 5 2004
Pirelli and Continental today announced the signing of an agreement for the creation of a new joint venture for steel cord production in Romania. Pirelli Pneumatici SpA will have 80% of the new company, named Cord Romania Srl, while Continental AG will have 20%.
Cord Romania will build and operate a new steel cord plant in Slatina, in an area near Pirelli facility dedicated to power cables production.
The new company will rapidly expand from the initial phase investing up to 40 million Euros in next 3 years, which will allow Cord Romania to produce - when fully operative - 30,000 tons of steel cord per year, with about 350 employees. Steel cord is used by tyres producers as main reinforcement material for radial tyres.
This investment is the first ever made by Pirelli Tyres in the Balcanic region; thanks to it, Pirelli will strengthen its position on European steel cord market. New plant, in fact, will directly serve fast growing East European markets, integrating offer from plants in Figline Valdarno (Italy), Merzig (Germany) and Izmit (Turkey).
With investments totaling far more than €100 million in past years, Continental already is one of the largest foreign investors in Romania. In its tire plant in Timisoara, as many as 10 million tires will be produced this year. The divisions ContiTech (Timisoara) and Continental Automotive Systems (Sibiu) have also set up plants in Romania.
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 since 1972.
Closing of the transaction is expected to occur in October 2004.
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