Sustainable growth strategy: three-year plan and vision to 2015

  • New Sustainability Plan for the years 2011-2013 with vision to 2015 was presented to the market
  • New economic, social and environmental targets are communicated with transparency to the stakeholders
  • Major benefits are expected from integration of the Business Plan and Sustainability Plan
  • Pirelli will use more and more raw materials having a low environmental impact

Pirelli presented the new Group industrial plan for 2011-2013, with vision to 2015, to the financial community in Milan on November 4, 2010.

Pirelli will invest Euro 1.9 billion over the next five years, increasing its production capacity and focusing on the premium market segment in rapidly developing economies. It will do so in accordance with the local for local strategy to improve product mix and efficiency and consolidate its leadership in all market segments in Latin America. As stated by the Chairman of Pirelli & C. S.p.A., Marco Tronchetti Provera, “In a world that is changing fast and in which new areas of growth are emerging, we have developed a plan which puts the company in the best possible position to compete. In 2015, 60% of production will be in plants less than ten years old. These actions will allow us to offer products which are constantly being renewed, always more tailored to the specific needs of customers, with reduced environmental impact and greater competitiveness.”

An ambitious plan, of which sustainability strategies are a core element: on November 4, indeed, also the new Sustainability Plan for the years 2011-2013 with vision to 2015 was presented to the market.

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Pirelli will use more and more raw materials having a low environmental impact in its production system, and it will use processes that will reduce water consumption 35% and energy consumption 15% by 2015, with a 15% reduction in CO2 emissions from their 2009 levels. The new Settimo Torinese technological centre will be fully operational by 2011, in support of Group energy policy. This new tyre plant aims at sustainable excellence in economic, social and environmental terms, will become the showcase of Group operations and technology, and will set the standard for other Pirelli production plants.

As far as products are concerned, Pirelli will continue pursuing its green performance strategy. It expects that the percentage of green performance products sales will rise from 37% of the total at the end of 2010 to more than 45% by the end of 2013.

As regards compounds, Pirelli is actively developing and using a series of new, increasingly ecological materials. Research and development will enable the Group to eliminate highly aromatic oils from its entire product line of tyres worldwide by 2013.

Finally, as for raw materials from renewable sources, Pirelli has continued research activities leading to the production of ecological silica derived from food processing scraps (rice husks).

In the area of social responsibility, existing workplace health and safety plans will be further improved through constant review of accident prevention and training programmes at company plants. Human resources policies will aim at improving management of diversity. Audits will continue to be conducted by independent outsourcers on economic, social and environmental responsibility in the supply chain. As regards the relationships with local and international communities, cooperation with governmental and non-governmental authorities will be reinforced to take joint initiatives targeting sustainable development.

Keen focus on the quality of corporate governance is key to sound and long-lasting development. In turn, corporate governance is based first and foremost on the central role played by the Board of Directors in defining strategic policy and supervising management, an effective risk management system and a top management remuneration policy that is closely linked to the creation of long-term value. The new system and analysis of risk factors, including opportunities, are an integral part of the strategic planning process. They allow undertaking recovery and mitigation plans, which transform risk management into a value-creation driver.

Major benefits are expected from integration of the Business Plan and Sustainability Plan, from the intangible ones of being an “employer of choice” and a company with growing brand equity, a reliable company for all stakeholders, to the tangible ones that are based on competitive advantage and sales of environmentally sustainable products, on cost improvements and on lower capital costs that can result from responsible, careful risk management.