Pirelli provides for investing in Brazil $ 1 billion until 2017

Investing $ 1 billion until 2017, expand the dealer network and bet on the growth of the market of premium tires. This is the recipe for Pirelli to Brazil, which accounts for the bulk of the company's results in Latin America-the company does not open the size of the country within the continent.
In the third quarter, Latin America accounted for 36% of net sales of Pirelli worldwide and the company's plans for Brazil begins with the dealer network. Currently, the company has 130 points of sale in Brazil, within a total of 600 that sell the company's tires exclusively. Other 1,000 resellers are franchisees and negotiate other brands of tires too.
Paolo Dal Pino, Executive Chairman of Pirelli to South America, explains that the goal of the company is to reach 150 stores-within a universe of exclusive resellers-750 and 1,500 non-exclusive franchises in 2017. "This growth is organic, no acquisition plans," says Dal Pino, remembering that in August the Italian company announced the merger of the business of distribution of tires with the Comolatti group, which added 29 network units of Pirelli.
Investments of r $ 1 billion until 2017 must guarantee the company a revenue increase and improvement in product mix without the necessity of new factories. The resources will mean the purchase of more modern machinery, capable of elevating the tyre production premium sector, which encompasses tires 17 inch above and which has more technology and ensures best performance to the vehicle-and more profitability to the manufacturer. The projection of the Pirelli is to raise in 8% capacity in Brazil without having to build new factories.
An example of how the company should increase its offer in the country without investing in new units is the factory in Feira de Santana (BA), which will allocate 1.5 million more tires on the domestic market which were destined for the United States. Change happens because a new facility in Mexico will supply the American market, benefiting the agreements of the North American free trade agreement (Nafta).
An additional advantage is that, according to Dal Pino, almost the entire production of Feira de Santana is of high performance tires.
Pirelli's plan for Brazil and Latin America is ambitious. Although Dal Pino admit that the company's market share in the country should fall, rising from 45% to 50% this year to 40% to 50% due to the entry of new competitors-Sumitomo has already announced a new factory in Sao Paulo-the Italian manufacturer projects a revenue increase between 5% and 6% annually in dollar, up to a limit of $ 2.45 in Exchange in Brazil. "We will have to leave some part of the market for others," says Dal Pino. "But let's grow the result and keep the lead," he adds.
Exemplifying in numbers the Executive optimism, the premium market on the Mainland is currently 2.7 million tires, little more than 5% of the total. In 2017, it is expected a jump to 9% of the market, to 5.4 million units. The growth expected by the company for the premium sector in the continent is five times the speed recorded on the market of non-premium tires.
Dal Pino is optimistic despite the difficulties seen in the region, as the expected impact of $ 200 million for Exchange account this year in Latin America operations. The exchange rate undervalued, he said, have a direct impact on the prices of raw materials.