By Denna Bowman
Sales have boomed at the UK arm of Pirelli tyres with turnover soaring by almost £40 million and crashing through the £300 billion barrier.
The continued recovery of the orginal equipment tyres market has been cited as contributing factor to its success, with customers such as Jaguar Land Rover increasing their production, according to Insider Media Limited.
The news comes just weeks after Pirelli, which has its UK headquarters in Burton-on-Trent, confirmed it was investing a total of £20m in its Carlisle site.
Pirelli will bring in new process machinery for volume production at Carlisle which is expected to secure the 850 jobs in the city and 350 at its operations in Burton, as well as creating more than 30 additional positions.
The company is planning on investing £11.4m on research and development and £9m on machinery upgrades. It follows the £2m awarded to the company from the government’s Regional Growth Fund in November, with Pirelli choosing its Carlisle plant as the R&D centre for a new range of eco tyres.
Pirelli UK Tyres filed sales of £329.7m for the year ending 31 December 2011, compared with £290.4m in the previous 12 months. Pre-tax profit was slightly down from £12.2m to £12m.
Pirelli UK said in the directors’ report that, as a result of its continuing emphasis on product development in the original equipment market, new contracts with important UK and European prestigious car manufacturers continue to be secured.
“This year saw a continuing positive market trend in terms of sales in this channel following the recovery in 2010 of the domestic original equipment market,” the directors added.
Pirelli UK said it had completed a “substantial amount” of capital expenditure during 2011, in excess of planned investment, continuing to refocus the manufacturing processes at Carlisle in line with the group’s premium product strategy and also further developing its manufacturing processes at Burton.
“The group intends to strengthen its position as a major tyre manufacturer and supplier in relevant markets by taking full advantage of its successful range of high-quality tyres and by continuing emphasis on product quality and service,” the directors added.
Pirelli UK Tyres is part of the Italy-based Pirelli Group, which is the fifth largest tyre manufacturer in the world. The group posted earnings before interest and tax (EBIT) for the six months to 30 June 2012 of €400.7m (£319.7m), an increase of 38.1 per cent from €290.1m for the same period a year earlier. Revenue for the half year also increased by 8.3 per cent to €3.02bn (£2.4bn).