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Pirelli to Pump Up Tires for AvtoVAZ
State-run Rostekhnologii and Italian Pirelli inked yesterday an agreement to construct a tire plant in Tolyatti worth ˆ250 million. Both companies will own 50 percent in the enterprise located close to Russia’s automobile giant AvtoVAZ. Exactly the latter is expected to be the key client of the new plant. The analysts say Pirelli has chosen correct partner in Russia.
Rostekhnologii, Pirelli and Samara region’s government inked yesterday an agreement to build a tire plant in Tolyatti. The starting annual capacity of the facility is estimated at 4.2 million tires, while the project budget will reach ˆ250 million. Each of investors will own 50 percent in the venture, where Pirelli will contribute technology and patents and Rostekhnologii will deal with the actual construction.
The new facility will emerge in Tolyatti technological park, i.e. in the immediate vicinity of the key production site of AvtoVAZ. “Rostekhnologii and Samara region’s government are the guarantors of assistance to be rendered to Russia’s company to get preferential taxation,” Rostekhnologii said in a statement.
Indeed, the alliance with Rostekhnologii gives Pirelli a strong partner to share the risks of approaching a new market. What’s more, it provides a guaranteed basic client represented by AvtoVAZ, where the state corporation is the biggest holder. As to AvtoVAZ, it will hardly save any money on logistics, as such big players as Pirelli don’t usually make advances even to the key clients. But AvtoVAZ that currently buys the tires of Russia’s make is bound to win in terms of the product quality.
www.kommersant.com
All the Article in Russian as of Aug. 06, 2008
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