According to the information obtained from this interview, the integration road between Aeolus and Pirelli Industrial tires has taken another big step, and its future strategic layout has also taken shape.
The integration of Aeolus and Pirelli industrial tires goes further
Sharing Pirelli Technology and Resources
Fengshen Tire announced recently that it intends to purchase 90% of PTG (Pirelli Industrial Tires) and 100% of Guilin Beili by issuing shares, plus the company’s own 10% stake in PTG. After the completion of the transaction, Fengshen Tire will Obtained 100% stake in Pirelli industrial tires.
Vice President of China National Chemical Industry Corporation, chairman of the Board of Directors and Party Committee of China National Chemicals and Rubber Corporation and Equipment Company, and Ao Feng Tire Chairman and Party Secretary Bai Yuping introduced the overall planning and the latest progress of the asset integration.
He said that after China Chemical Rubber took control of Pirelli, it would take a few steps to integrate with domestic assets.
First, Pirelli delisted abroad; secondly, industrial tires were separated and integrated with domestic assets to become industrial tire companies; again, industrial tire companies and passenger tire companies were listed and operated at home and abroad.
Bai Yuping revealed that the integration of industrial tire assets will be completed in 2017.
According to reports, in order to coordinate the integration work, they established a new organizational structure. This organizational structure includes the lean headquarters in Beijing and a number of factory bases.
Among them, the Beijing headquarters is responsible for strategy formulation, main business process guidance and coordination, transfer of knowledge and best practices; Shuangxi Base and Huanghai Base will gradually be transformed into cost and quality centers; Jiaozuo Base will be the production base of TBR and OTR products and will become new The company’s technical headquarters has a strong R&D center and other experienced auxiliary departments.
With this integration, Fengshen Tire (including Huang Hai, Double Happiness, and Guilin) ​​will be reborn and all Pirelli genes will be implanted.
The Chinese and Western management teams have been appointed to jointly lead the new Aeolus and have signed technical licensing and technical assistance agreements with Pirelli.
In view of this, all Fengshen's businesses will benefit from the management and technology of the original Pirelli industrial tires.
In the field of industrial tires, technology is the core competitiveness. The signing of technical licenses and technical assistance agreements between the two parties will enable them to step by step permitting China to use various patents and technologies and provide relevant technical assistance to improve the performance of Chinese products.
According to the plan, its initial effect is to improve the stability of product quality, improve the performance of certain products, and introduce new products in the near future.
The reporter was informed that at the Tire and Auto Show held in Italy at the end of May, Fengshen will release the third generation of the Neo series of truck and bus tire products. This product line is based on Pirelli technology developed for the European market.
"A perfect marriage"
The key to this asset integration is the introduction of PTG assets to Fengshen.
However, many people in the domestic industry know about Pirelli only in the F1 race and high-end cars, and they do not know much about industrial tires.
According to reports, Pirelli was founded in 1872 and has a reputation in the international high-end and luxury car market. It also has a leading position in the market for truck tires and agricultural tires.
PTG is an industrial tire business unit that was spun off from Pirelli and owns the world's top industrial tire technology.
PTG CEO (CEO) Paul. According to Paolo Dal Pino, Pirelli Industrial tires have core competences in terms of technology, management, channels, branding and other aspects.
Pirelli long-term integration of innovation, quality, brand, name more than 5,000 patents. 6 percent of its annual sales of high-end products are used for scientific research, which is the highest level of scientific research investment in the tire industry.
Currently, PTG has two major R&D centers, one in Brazil and the other in Italy. The Brazil R&D Center focuses on developing technologies related to agricultural tires, while the Italian Center studies all product combinations and integrates R&D personnel and resources.
Emerging markets are the main source of PTG’s revenue and profits. In 2016, 70% of the company’s revenue came from Latin America and the Middle East and Africa. These two regions plus the Greater Europe region (EU, Russia, Turkey) represent the most important market for PTG.
In 2017, they established contacts with North American partners and are expected to achieve new growth in this area.
PTG's product portfolio focuses on high-end markets. They have established a huge sales network and an efficient trade structure in South America and Europe, which have commercial advantages.
Taking the Brazilian market as an example, PTG has about 120 sales points and more than 1,500 direct distributors, which has a very high market share.
Aeolus has good performance in China, North America and Europe, while PTG is a leader in South America and has a certain market share in Europe, the Middle East and Africa. This allows each region to complement each other.
In Paul. According to Dalino, this integration is "a perfect marriage."
The future strategy is clear
According to reports, after the completion of the integration, Fengshen Tire will not only have a sharp increase in body mass, but will also significantly increase its profitability.
New Fengshen will be the first giant company in the world to focus on the production of truck tires, engineering tires and agricultural tires. With an annual production capacity of 18 million units, it will become the fourth largest industrial tire entity in the world. Its manufacturing base includes eight factories in four countries (Brazil, China, Turkey and Egypt).
Paul. Dalpino said that in the next few years, especially in Asia, tire production capacity will continue to increase due to development needs.
The new company will establish two strategic centers located in Beijing and Milan, Italy. The core of industrial tire business innovation lies in three R&D centers located in Italy, Brazil and China.
In market competition, New Fengshen will optimize its product portfolio to cover various market segments. The high-end products are the Pirelli brand. The Aeolus brand enters the second tier and the third tier has the Yellow Sea, Double Happiness and Guilin. The goal is to do the best in each echelon.
According to reports, the strategic goals of the new company in the future are based on the synergy integration of various companies, and increase sales revenue by increasing sales and prices globally.
Among them, the influence of Fengshen brand has been re-evaluated in the market, which can significantly increase the brand premium ability.
In the short term, they plan to make a strong investment in manufacturing foundations, quality and technology to improve the efficiency of production processes, provide products with stable quality and continuous improvement, and at the same time, integrate cultures among different companies.
In order to accelerate the growth in the medium term, New Fengshen intends to continue to invest in technological and business optimization, while consolidating the market share of integrating agricultural and engineering tires, and providing fleet services for each echelon, including retreading services.
Tire World Net understands that the main goal of Aeolus is to consolidate the status of all market echelons globally, and by 2020, to achieve growth in all regions, especially in North America and Africa.
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