Pirelli Board Approves €1 Billion US Plant Expansion

Pirelli's board of directors has approved a multi-year investment plan worth approximately €1 billion to expand its tyre manufacturing facility in Rome, Georgia. The plan passed by a majority vote, though three Sinochem-nominated board members voted against it.

Implementation will begin in phases from 2027. The expansion is projected to lift the plant's annual output capacity to around six million car tyres by 2033. The upgrade will incorporate the company's Cyber Tyre technology.

According to the company, the investment will support its growth in the high-value segment in the United States. Pirelli calls the US the world's largest market for this segment, accounting for approximately 40% of global volumes. The plan will also strengthen the company's local-for-local strategy and enhance supply chain resilience.

Plant Expansion Phases

The work will unfold across two distinct stages. The initial phase will focus on ramping up robotised manufacturing. It will use the newest version of Pirelli's proprietary modular integrated robotised system.

The subsequent phase involves constructing a fully automated conventional facility dedicated to premium products. This new facility is expected to contribute an additional three million tyres in annual capacity once it is fully operational.

Governance and Market Clearance

Following governance changes introduced under Italy's Golden Power Decree, Pirelli stated it has secured clearance from the US Bureau of Industry and Security. This clearance allows the company to sell its Cyber Tyre system within the US market.

The board vote against the plan came from Sinochem-nominated members Zhang Haitao, Xi Xiaohong, and Wang Kun. In July, Chinese state-owned Sinochem sold a 14% stake in Pirelli to Lumina Crown, an investment vehicle controlled by Czech businessman Michal Strnad.

Financial and Operational Impact

Pirelli asserts that the expansion plan will leave its 2026 financial targets unaffected. The company expects its capital expenditure-to-revenue ratio for the 2027-2033 period to remain broadly consistent with prior periods. The group also intends to maintain its cash generation levels.

The expansion is projected to generate roughly 1,000 new jobs at the Georgia site. Pirelli has operated in the state since 2002. The company frames the investment as a response to growing demand for technologically advanced products made in the USA.