by Alex Kapadia
Pirelli tyres has announced it will continue the cost cutting strategy it launched last year in a bid to carry the company through the global-wide recession.
The Italian tyres manufacture unveiled its 2009-2011 Industrial Plan which centres round the goal to save more than 300 million euros over a three year period.
The plan is an extension of a restructuring started last year to cut costs, improve efficiency and pay off debt.
The cost-cutting will be achieved through the rationalisation of manufacturing structures and staff in Europe, the renegotiation of raw material purchasing agreements in order to take advantage of the falling prices, and savings from lower energy and logistics costs.
Pirelli also quashed rumours that it had any interest in buying for the tyre business of German rival Continental AG.
Chairman Marco Tronchetti Provera “We are looking at our future on a stand-alone basis.”
Pirelli also revealed that manufacturing capacity in emerging markets is to be expanded so as to take advantage of increasing demand in these regions, coupled with its own lower manufacturing costs.
In the commercial tyre sector 87 per cent of Pirelli’s total production is already located in low-cost countries, compared with an average of 50 per cent for the company’s four major competitors.