Interview: Tiremaker Pirelli CEO eyes sound growth, clean technology with ChemChina

Industrial business and clean technology are the plans in the mind of Pirelli CEO Marco Tronchetti Provera days after the signing of an agreement that paves the way for China National Chemical Corporation (ChemChina)'s takeover of the Italian tiremaker.

In a recent interview with Xinhua held at the headquarters of 140-year-old Pirelli in Milan, Tronchetti Provera highlighted the strategic value of the operation.

"It is an agreement between ChemChina and Camfin (the holding company that controls Pirelli) based on cooperation in the industrial tire business," the CEO told Xinhua.

He predicted a solid future with the Chinese partner, adding he does not see the possibility that other players could join.

"We chose each other because of a common interest," Tronchetti Provera went on saying. He said ChemChina has a strong presence in China but needs higher level of technology to keep pace with the market's rapid development. On the other side, Pirelli has the technology and a global footprint.

As a result of the takeover, Pirelli, that is focused on the premium segment with 20 percent of market share, will double its capacity in the industrial business.

"We will become a global player able to face competition in the next years and deliver advanced technology to China," he said.

"I see that we can accelerate the process of innovation of products in China and also create a new business model based on retreading of the tires to have the carcasses last 130,000 km instead than 40,000 km," the CEO elaborated.

"That means that we deliver environment-friendly and less costly products to fleets, and create new jobs, Tronchetti Provera, who based on the agreement will remain CEO of Pirelli until 2021, explained to Xinhua.

"I think ChemChina is the right partner to guarantee the independent future of Pirelli," he pointed out.

In fact Pirelli used to be a takeover target with "big eyes around that could have had an interest in buying and splitting the company," he noted. "With ChemChina we will have a business model that is more sound," he insisted.

The agreement was the fruit of a dialogue with ChemChina that first started three years ago.

"We shared our views on the future of our industry. But at the time there were some complexities so we did not go ahead. Then we met again last October. We restarted talking and we shared the same vision, we imagined how to build this venture," the CEO recalled.

The experience was no doubt positive.

"I had the chance to meet an entrepreneur, Ren Jianxin (Chairman of ChemChina) who has a really modern, updated approach to economy. I saw a very open China that wants to be part of the global world ... I saw that all what we agreed was consistent with the outcome of our agreement," he said.

In response to the concern expressed in Italy for the latest in a series of acquisitions by Chinese investors in recent years, Tronchetti Provera called on his beloved home country to seizing the opportunities brought by global flows of capital.

"I think in the last decades our leaders did not see as a priority to have the industrial structure of the country becoming sounder and bigger. In Italy there was the myth that small is beautiful, I can say that big is even better because also provides opportunities to small companies," he noted.

In his view, Italy has to be able to keep and protect its know-how and human resources but at the same time provide large access to foreign capital.

"I can say that in my experience the approach of a Chinese State-owned company has been very fair ... ChemChina has been respectful of our roots and technology and has helped guaranteeing that the technology will remain within Pirelli and the headquarters in Italy," he underlined.

"We have been able to combine the priorities of both groups and are working hard at the same side of the table willing to build a better future both for ChemChina and Pirellib ... so it is a win-win cooperation and this approach I think can be replicated in other cases," he concluded. Endit