Pirelli world 39

Poste Italiane Spa-Spedizione in Abbonamento Postale-70%-DCB Milano. Reg. Trib. Milano n. 494 del 24.9.1994 – Redazione: Via G. Negri 10 Milano
W RLD
The quarterly magazine for Pirelli’s management throughout the world - Apr/Jun 2004 - No.39
Naomi Campbell for Pirelli Planet
CONTENTS
Pirelli Technology Day
The Group’s outlook 2004-2006
illustrated to the financial community
page 2
Code of Ethics of the
Pirelli Group
Read the nine articles composing
the recently released Code of Ethics
page 5
A Manual for All
Pirelli publishes the first
“Shareholder Manual”
page 10
A Well Spread Success
The BU Moto latest successes
in both racing and road tyres
page 14
Pirelli-Shod Victories
FIA GT: the winning cars
on P Zero tyres
page 20
A Support to Be Proud of
Pirelli’s social projects in Venezuela:
from art exhibitions to
sanitary support for children
page 21
Pirelli Group prospects for 2004
are very positive, but the financial
results for 2005 and 2006 will be
even better, judging by the forecast
shown to the financial community
and international press by the top
management on Pirelli Technology
Day (p. 2-4). Sharp focus on higher
value-added market segments, unremitting commitment to research and
development, product innovation and
increased organisational efficiency
will be the drivers of value creation
over the next three years. Meanwhile,
corporate ethics based on transparency, fairness and loyalty will be at the
heart of Pirelli people’s behaviour, as
stated in the Group’s Code of Ethics
(p. 5-6) and in corporate governance
rules illustrated in the new Shareholder Manual (p. 10).
Another source of inspiration for
Pirelli people is feminine beauty,
especially when it emanates from the
new worldwide testimonial for Planet
Zero ultra-high performance tyres (p.
7-9), Naomi Campbell. A top model
for a range of top tyres for the planet’s most powerful and elegant cars.
Pirelli’s state-of-the-art MIRS™/
SATT™ technology is also the key
to the success of the new truck tyre
FH85 Amaranto, the colour that
identifies high performance capability in the giant tyre business (p. 11).
The MIRS™/SATT™ technological
breakthrough is becoming increasingly evident in many tyre market segments. In the World Superbike Championship, Pirelli is setting fastest lap
times and enhancing brand visibility
on racing circuits across the globe.
At the same time, it is also winning
product comparison press tests and
achieving optimum results (p. 14-15).
In world championship rallying, the
most revealing compliment paid to
Pirelli’s domination in Greece by
the Subaru of Petter Solberg, came
from archrival Sebastien Loeb, who
said: “Against those tyres, there was
nothing left for me to do but aim for
second place” (p. 23).
1
FOCUS
The Pirelli Group outlook for 2004-2006
Pirelli
Technology Day
Marco Tronchetti Provera and the top management of the Group met
the financial community to explain targets and strategies for the next three years
and illustrate the technological progress of the Sectors
P
irelli Technology Day took
place on 17 May at the new
Headquarters of Pirelli RE in
Milano – Bicocca. During the meeting,
Chairman Marco Tronchetti Provera
presented to the financial community
the Group’s outlook for the 2004-2006
period, as well as main technologies
and research projects carried on in all
its activity sectors. In the last two years,
Pirelli completed an important process
aimed at relaunching and developing its
activities, based on increased efficiency,
on EBIT growth and on focus on new
technologies, thus consolidating and
strengthening its position and presence
on international markets.
Thanks also to reduction and rationalization measures, Pirelli can today
maximize benefits of any upturn in
energy and telecommunication sectors
and reach further goals in terms of
EBIT, market share and new products,
thus confirming its role of leader in new
technologies and innovation.
R&D and innovation activities
– where Pirelli employs approximately
1,500 people – play a key role, with
2003 investments equal to 3.4% of its
sales. This is witnessed by more than
400 patents registered in the last two
years.
Pirelli has today also a strongly
motivated management team, with an
international career path.
Group’s guidelines 2004-2006
• focus on higher value-added market
segments,
• strong commitment to innovation of
products,
• further increased efficiency of orga-
The Driver of Innovation
“Innovation has always been a major driver for the Pirelli Group. We believe R&D must have a dual purpose” – said Pirelli Group Chairman
Marco Tronchetti Provera: “to generate disruptive innovation and to continuously improve the offering of products and services. To accomplish
both objectives we have organized our R&D human and
financial resources on two levels:
- Pirelli Labs enjoy an appropriate level of independence
from the day-to-day business to allow them to focus on
breakthrough initiatives to guarantee a flow of growth
opportunities. 112 scientists are dedicated to two areas of
research: Materials Innovation and Optical Innovation.
The research has already produced new businesses such as
Broad Band Access systems and photonics (in 2003 revenues
from the new BBA product portfolio amounted to 29 Mln).
Future opportunities are likely to lie in Fuel Cells, new
recycling technologies and the distributed sensor network.
- Our R&D centers employ more than 1,400 people. They
provide continuous product and process improvements and
are also responsible for the industrialization of Pirelli Labs
projects”.
2
•
•
•
•
nizational structure and business
models,
development of opportunities in new
markets.
Targets:
strong improvement of EBIT: CAGR
(Compound Annual Growth Rate) of
+25%,
total growth of sales: approx. 10%,
better net financial position, forecast
at 1,350 million Euros in 2006, compared to 1,745 million at end 2003.
Industrial activities:
Pirelli aims at strengthening its position
of innovation leader in all its Sectors
through:
• the growth in “high performance”
segments,
• a market approach integrating products, systems and services,
• a further development of international
presence.
For Industrial activities, Pirelli therefore forecasts:
• CAGR of sales between 3 and 4%,
• CAGR of EBIT of 23%,
• ROS in 2006 equal to approx. 7%.
Energy Cables and Systems Sector
In the three years period, outlook is
based on:
Marco Tronchetti Provera
with the new Pirelli shod
Maserati MC12.
• an increased presence in higher
value-added market segments,
• the realization of innovative production processes,
• the development of products based
on new materials,
• a commercial approach diversified
by client.
On the basis of the above guide-lines
the targets are:
• CAGR of sales of 2%,
• strong improvement of EBIT, with a
CAGR of 25% and ROS at 6% in 2006.
The Group also forecasts a continuous attention to efficiency and rationalization of resources, with a particular
attention to quality standards of its
services.
In a market where utilities’ investments are still stagnant and prices of
lower value-added products are still
under pressure, Pirelli growth drivers
will be a better mix of its solutions, a
stronger focus on high voltage cables
and systems – capitalizing on its leadership in submarine systems and cables
From Ideas to the Market in 18 months
“Our industrial activities are present all around the world,
with 77 factories, 33.401 employees and 6 billion sales”, said
Managing Director Giovanni Ferrario. “From our history,
and also thanks to the support of Pirelli Labs, one third of
our products hits the market between 18 months and two
years: this is a fact, which enables us to gain from what we
invested. The time to market is always short, the faculty to see
market needs comes also from the cooperations we have with
the Telecom Italia Lab, with the University and outside our
company. Moreover, we are able to control the technology we
use in our Pirelli Labs and therefore we hit the market with
a new generation of products. On the right hand of the slide
you can see what I mean when I say new products: we cover
the access gateway, the CWDM (Coarse Wavelength Division
Multiplexing), the Tunable laser and the Radio Over Fiber. “
3
The Energy Cables &
Systems stand at Pirelli’s Technology Day.
for extreme applications (offshore platforms, mines and power plants).
Telecom Cables and Systems Sector
In a market where recovery signals
in demand of optical cables and fiber
can be detected, with prices still under
pressure, Pirelli expetcs to grow in the
sector through:
• a new business model based on
Group’s technological leadership,
• a complete and excellent product
portfolio,
• a competitive costs structure.
Innovative technologies for broadband access and second generation photonics will have a growing importance:
in 2006 these activities will account for
one third of Sector’s revenues.
Thanks to these factors, Pirelli
forecasts:
• CAGR of sales of 10%,
• positive EBIT and ROS in 2006
equal to approx. 5%.
In particular, Pirelli is already
marketing its innovative gateways for
broadband access, winning important
contests for some of the main European carriers. Pirelli forecasts that in
2004 revenues from these activities
could reach 50 million Euros.
During second half of 2004,
Pirelli also forecasts to market first
products of second generation photonics, thanks to which costs of telecommunication networks could be
reduced. In particular, first solution
marketed will be a tunable laser for
data transmission on long haul fiber
optic cables.
4
Tyres Sector
After a period when a strong growth
of all economic indicators and a performance better than competitors were
posted, Pirelli forecasts of a further
improvement are based on continuous
growth in high performance segments
– where Pirelli is one of the leading
international players – on growth in
Truck and Moto segments and on
increasing contribution coming from
MIRS innovations and from its application to traditional processes.
The guide lines of the Sector are:
• boost of innovation, thanks to focus
on new “high performance” products
based on proprietary technologies:
MIRS for tyres production and CCM
– Continuous Compound Mixing for
new materials industrialization,
• growth in North American market,
• production delocalization.
On the basis of the above guide-lines
the targets are:
• a CAGR of sales of 4%,
• a CAGR of EBIT of 10%,
• ROS in 2006 growing at 9%.
Also in this Sector, Pirelli aims at
confirming its leadership capitalizing
on MIRS technologies through:
• increased production volumes in
three plants in Germany, UK and
the USA,
• focus of MIRS technology on runflat, SUV and motorcycle tyres,
• the application of some MIRS technologies to traditional production
processes, with positive effects on
flexibility and quality.
Pirelli aims also at reaching a 12%
share of North American “Performance” market segment, thanks to a selective business model, both in Original
Equipment and in Aftermarket, to a
logistic system that integrate MIRS
plant in Atlanta, Georgia, and new Brasilian plant in Feira de Santana, and to
the appreciation of Pirelli brand in the
US, as witnessed by recent JDPower
award. In the next three years, Pirelli
forecasts to develop Tyres Pressure
Monitor systems, able to interact with
electronic systems of the vehicles thus
improving driving safety.
Pirelli Labs
Pirelli Labs, the excellence R&D
center of the Group, has already
launched many research projects,
also in parternship with important
international centers: MIT, CNR and
Politecnico of Milan. These projects
focus on:
• new generation optical components
and chips based on nanotechnologies,
• new materials for cables and tyres,
• fuel cells.
The main research projects will be
capable of generating a significant
proportion of additional value for the
Group in the three-year period.
Real Estate activities
Real Estate activities, managed by
subsidiary Pirelli & C. Real Estate,
have reached in 2003 maximum targets outlined in “2003-2005 Three
Years Plan”. The new three years plan
has been presented to financial community and media on June 1st 2004.
For the 2004-2006 period, Pirelli
RE foresees an average growth rate
of EBIT (including income from
equity participations) of 20%, thanks
to integration of asset management
and service provider activites, to new
funds launch and to development
of new activities in the field of non
performing loans and in distribution
of real estate and financial products
through its franchising network.
P.W.
ETHICS
In business, ethics runs along success
Code of Ethics
of the Pirelli Group
Below, we reproduce the nine articles which indicate the line of conduct
of the Company inspired by the key values of transparency, fairness and loyalty
ARTICLE 1
PREAMBLE
Pirelli Group conducts its internal
and external operations in accordance with the principles set out in
this Code, in the belief that business
ethics must be pursued alongside
business success.
ARTICLE 2
GOALS AND VALUES
“T
he Group’s identity
has traditionally been
based on a set of
Values that over the years have been
pursued and preserved by us all”,
explains Chairman Marco Tronchetti Provera, “which has enabled us to
consolidate and advance our corporate culture. From these values, the
Company has extracted a set of principles and rules that are enshrined in
the Code of Ethics recently adopted
by the Board of Directors of Pirelli
& C. SpA.”
The Code of Ethics embodies the
general principles - transparency,
fairness and loyalty - that have
informed our business dealings
across the board at every level in
Pirelli Group. We are convinced
that business cannot act as a driver
to civil society and the economy
unless is grounded in solid ethical
values.
The main aim of the Group’s companies is to create value for shareholders. The industrial and financial
strategies and resulting operations
are guided accordingly, targeting the
efficient use of resources.
In the pursuit of this goal, the
Group’s companies are unfalteringly
committed to the following principles of conduct:
- As active and responsible members of the community in which they
operate, the Group’s companies are
committed, in both their internal and
external relations to observe national
laws and the standard ethical principles sanctioned by international
business management: transparency,
fairness and loyaty.
- They reject and condemn all
and any recourse to illegitimate
or dishonest behaviours (towards
the community, public authorities,
customers, workers, investors and
competitors) for the achievement
of business goals. The latter shall
be pursued exclusively through
excellence in performance in terms
of quality and the value for money
of products and services, based on
experience, customer focus and
innovation;
- Organizational structures are
designed to prevent any violation
of the principles of legality, transparency, accuracy and fairness
by employees and partners and to
monitor the observance and implementation of these principles;
- The market, investors and the
community in general are to be
assured of complete transparency
while at the same time ensuring that
the business’ competitiveness in not
compromised;
- Fair competition is encouraged,
this being central to the interests of
the Company as well as to competitors, customers and stakeholders in
general;
- Pirelli companies pursue market
excellence and competitiveness,
offering customers a quality of
service that effectively meets their
requirements;
- The Group’s human resources are
to be valued and developed;
- Resources are to be used responsibly, focusing on sustainable development, respect for the environment
and protecting the rights of future
generations.
5
ARTICLE 3
SHAREHOLDERS
Group companies are committed
to ensuring equal treatment for all
categories of shareholders, avoiding any preferential treatment. The
mutual benefits derived from being
part of a group of companies are
pursued in accordance
with the relevant legislation and
the autonomous interests of each
Group Company as it seeks to create value.
ARTICLE 4
CUSTOMERS
The excellence of the Group’s
products and services is based on
customer service and the ability of
companies to meet clients’ demands.
The aim is to offer an immediate and
intelligent response, tailored to the
needs of customers, governed by
the principles of legality, courtesy
and collaboration.
ARTICLE 5
COMMUNITY
Group companies are committed
to contributing to the economic
well-being and growth of the community in which they operate by
providing efficient and technologically advanced services.
In line with these objectives, and
with their commitments towards the
various stakeholders, Group companies regard research and innovation
as being the key to growth and
success.
Group companies maintain relationships with local, national and
supranational authorities based on
full and active cooperation and transparency that does not compromise
their independence, economic targets and the values enshrined in
this Code. Group companies
6
encourage and where necessary provide support for social, cultural and
educational initiatives geared towards promoting personal development
and improving standards of living.
Group companies do not contribute or confer advantages or other
benefits upon political parties and
trade union organizations or their
representatives and candidates,
without prejudice to compliance
with the relevant legislation in
force.
ARTICLE 6
HUMAN RESOURCES
Group companies recognize
the central importance of human
resources in the belief that the key
to the success of any business is
the professional contribution of the
people that work for it, in a climate
of fairness and mutual trust.
Group companies shall safeguard
health and safety in the workplace
and consider respect for workers’
rights as fundamental to the business. Working relationships are
managed with a view to guaranteeing equal opportunities and promoting the personal development of
each employee.
ARTICLE 7
ENVIRONMENT
Group companies believe in
sustainable international growth in
the common interest of all stakeholders, present and future. Their
investment and business decisions
therefore reflect respect for the
environment and public health.
Without prejudice to compliance
with the specific legislation in force,
Group companies take account of
environmental issues when making
choices, not least in the adoption of
specific technologies and manufacturing methods
(where this is technically feasible
and economically viable) that shall
allow to reduce the environmental
impact of their operations, even
beyond the minimum limits set
down by regulatory requirements.
ARTICLE 8
INFORMATION
Group companies are aware of the
importance of providing the market,
investors and the community in
general with fair and accurate information about their businesses.
Therefore, without prejudice to
the obligations of confidentiality
attendant upon any business dealings, Group companies see transparency as key to their relations with
stakeholders.
In particular, Group companies
communicate with the market and
investors in accordance with the
principles of accuracy, clarity and
equal access to information.
ARTICLE 9
COMPLIANCE WITH THE CODE
The governance bodies, management and workers across all Group
companies, as well as external
partners such as consultants, agents
and suppliers, are all bound by this
Code. Group companies are committed to implementing the proper
procedures, regulations and directives aimed at ensuring that the values
enshrined in this Code are reflected
in their actions and in the behavior
of all their employees and partners,
providing proper sanctions to be
applied for any infringement where
appropriate.
PRODUCT
Simply the world’s best
Tyres From
Another Planet
Pirelli presented in Rome Planet Zero: the first range of tailor made, ultra high performance
tyres, with Naomi Campbell as special guest and testimonial
able to remain indifferent. After the
Son of the Wind Carl Lewis, soccer
prodigy Ronaldo, sprinter Mary-Jo
Perec and the beautiful Sharon Stone,
we give you Naomi Campbell, who
has lent her name – and her stunning
beauty – to Pirelli’s top level tyres. Or
rather, to a concept: the significance of
Planet Zero goes well beyond the technical values of the products it offers
and is destined to write a new page in
the history of not only Pirelli but the
whole world of UHP tyres.
S
ay Zero and you have said it
all, at least in the tyre world.
Pirelli proudly presented Planet Zero to the press in Rome last May.
The most complete range of ultra-high
performance (UHP) tyres, designed
and built to satisfy the ever more refined and pressing needs of demanding
cars, but more than anything else launched in a seemingly unending race for
technical and technological progress.
That is not all, though. Planet Zero
adds one more variable: its tyres are
tailor made to meet the requirements
and necessities of the wide-ranging
tastes of motorists at the wheel of the
world’s most powerful cars and sports
utility vehicles (SUV).
Today, cars of all market segments
are united by a shared technical con-
cept: a continual increase in performance. All with a general upsurge in
vehicle weight, that makes the management of performance even more
critical. Cue Planet Zero, offering the
ideal medium that ‘actively’ manages
this complex situation. Really fast utility cars, coupés on the threshold of a
racing capability, SUVs able to climb
fast on slippery unmade roads, yet also
able to exceed 250 km/h on asphalt:
Planet Zero is able to manage all of
this. In fact, it is able to optimise the
situation: to almost make suggestions,
so high is the level of performance
it guarantees – even in on-the-limit
conditions.
Faced with a ‘tailor made dress’ of
this level, not even the queen of top
models, Naomi Campbell, has been
P Zero System: divide and rule
P Zero, today’s symbol of maximum
tyre modernism, is in reality a marque
nearly a quarter of a century old. The
first ‘modern’ P Zero-stamped memory
emanates from 1987 and is linked to
the legendary Ferrari F40. Then, the
revolution came in 1994. It was called
the P Zero System and was a completely innovative combination: directional tread pattern for the front wheels,
asymmetric for the rears. From that
moment on, that car segment opened
up, and always at higher speed. The P
Zero range responded to increasingly
pressing demands. From 2000, it was
P Zero Rosso; a tyre homologated
as original equipment for many high
prestige cars with sporting or luxury
connotations. For cars of even higher
performance, like those of the tuners,
along came the P Zero Nero in 2002:
a tyre aimed mainly at the replacement
market and tailor made to meet specific
7
requirements. P Zero Nero is produced
with MIRS™ technology, another new
page in innovative tyre production.
In 2003, P Zero Corsa was a new
step forward for the P Zero car range.
A road tyre oriented towards the needs
of cars of extreme performance, with
a particular inclination towards circuit
driving. The P Zero Corsa System for
Europe unveiled at the Rome press
event is a logical evolution.
Its DNA? A new, further optimised
pairing of a directional tread pattern
for the front and asymmetric for the
rear. Some of P Zero Corsa System’s
production phases are by the MIRS™
production process, further confirmation of the availability of a maximum
technological level.
The arrival of the P Zero Corsa
System enriches and almost completes
Planet Zero. It is no exaggeration to
say that, today, the Pirelli tyre range
for top to extreme performance has no
rivals and constitutes a starting point,
as much a galaxy apart in Pirelli production as it is in the global panorama
of tyres.
Naomi during the presentation of the new Planet Zero range of tyres in Rome and, above, a
moment during the press conference, held in the Roman Acquarium (opposite page).
8
Scorpion Zero: the choice of
HM Queen Elizabeth II
Few people missed pictures of a new
car of great prestige being presented to
Her Majesty Queen Elizabeth II a few
weeks ago. It was a special version
– obviously – of the Bentley Diamond,
built to meet the specific needs of the
British royal family. And its tyres are
Pirelli P Zero Scorpion, to be precise,
in 19-inch diameter.
The range that bears the Scorpion
tread pattern is the other side of
Planet Zero. It is aimed at the needs
of uncompromisingly lusty cars of
elevated mass, with ambitions of
robustness, also motivated by offroad use, but without forgetting high
speed on asphalt, for which the tyres
offer maximum performance. The first
Scorpion Zero appeared in 1997: a tyre
created expressly for high performance
sport utility vehicles (SUVs). With an
expanding and increasingly ambitious
segment of vehicles with off-road
aspirations spreading across the world,
along came a preview of the Scorpion
Zero Asimmetrico in the United States
in 2003. The first tyre of its kind to be
made with MIRS™ technology for
this type of vehicle and, therefore, of
maximum product uniformity.
With the Scorpion Zero Asimmetrico, the 4x4 steps into the future. Now,
the vast range of SUVs has expanded
out of all proportion and involves
almost all the major European and
American car manufacturers. In Europe, the off-road proposition multiplies
year after year, but without renouncing
the maximum in equipment. Sometimes even luxurious. And especially
taking the ultra-high performance
road, with a speed potential of well
over 250 km/h.
Scorpion Zero Asimmetrico was
designed and developed especially to
meet these continually growing performance ambitions without, obviously,
abdicating from maximum efficiency
in the rough and on other awkward
surfaces. Many sizes are on offer, right
up to 24 inches in diameter. There is
clearly an increase in comfort, braking,
handling in both the wet and dry. All
with an unstinted liking for pure speed.
The proof of that is the world record
for pick-ups, set last winter by a Dodge
STR10 fitted with 22-inch diameter
Scorpion Zero Asimmetricos.
Punctured tyre?
Just keep going!
We have talked of the P
Zero Nero and of MIRS™
technology. Concepts of
maximum technical and
technological value, robots
that produce tyres – but always
under the control of man and his
experience – to guarantee maximum
uniformity, performance and safety.
All very well, all full of significance
for the future. But often a long way
from the ‘feel’ of the ordinary motorist, perhaps attentive to every aspect
connected to driving and the road,
but without the necessary technical
knowledge with which to appreciate
certain nuances planned for the future.
But here we have Eufori@, technology that automatically becomes the
motorists’ travelling companion. A
particularly welcome one.
In fact, Eufori@ is an intelligent
tyre. If it is punctured, it does not
deflate. Its special technology enables
the tyre to retain a perfect load carrying capacity for up to a maximum
of 150 kilometres: just remember not
to exceed 80 km/h. A turning point
on the safety front. No need to stop,
change tyre and wheel, perhaps on a
dark, rainy night. No danger to the
motorist: he just continues his journey.
But Eufori@ is not only a tyre: it is a
concept. A winning concept. It quickly
came to the notice of the car manufacturers. Today, the New Mini fits Eufori@ as original equipment: but the tyre
is also available in bigger sizes. That is
confirmed by BMW, who are always
increasingly interested in this kind of
tyre for its saloons and station wagons.
And the Eufori@ original equipment
portfolio is set to expand rapidly.
Always in the laboratory.
And fast…
Planet Zero offers a vast range of
sizes (in inches) able to satisfy every
possible demand or need from both the
car manufacturers and the end user,
right up to a 25-inch diameter Scorpion
Zero for the Hummer H2. P Zero
and Scorpion Zero breathe
even more life into the total
overview of Planet Zero,
which today, with its more
than 240 different products, constitutes an offer
undoubtedly greater than
any other tyre manufacturer. Ten
years ago, few car makers had homologated P Zero. Today, the situation is
exploding: as well as BMW, Ferrari,
Lamborghini, Jaguar and Ford, other
manufacturers involved are Audi, Mercedes-Benz, Bentley, Maserati, Aston
Martin, Alfa Romeo, Porsche, Lotus,
Saab, Subaru and Volvo. The niche
market phenomenon of the Eighties
is now aimed at a full range of cars of
totally different levels and purposes.
In sales terms, the phenomenon is
imposing. In 1994, we spoke of a few
hundred thousand tyres sold:
today, the figure is not far off
5,000,000. And with great
diversification: at the end of
2004, Planet Zero will be
offering the market 46 sizes
of P Zero and Scorpion of 20
inches or more in diameter.
It would be incorrect to
forget that all of this is in
total synthesis and coordination with Pirelli’s motor
sport activities, as the company has always considered
racing an irreplaceable
mobile research and development test laboratory. The
P Zero range wins as much
on the road as it does on
the track. For instance, the
tyre won its 19th world rally
championship last November
with Norwegian Petter Solberg, driving for Subaru, a
A variety
of sizes
to satisfy
all users
manufacturer that has won all six of
its world drivers’ and constructors’
titles on Pirelli. For many years, the P
Zero range for unmade special stages
has been a winner, particularly when
surface conditions are especially
harsh. Those for use on asphalt excel
when there is little road surface grip,
the enemy rather than the ally of the
driver.
Now, the adventure continues on
the track. With Pirelli and its partner
Ferrari in the FIA GT championship,
in which the duo celebrated the winning debut of the Ferrari 575 in the
autumn of 2003. This year, the commitment continues: Pirelli will also fit
its tyres to the Saleens, American cars
that almost always set the fastest lap
in qualifying and that dominated the
third race of the season at Valencia
in May. And that is not all: the long
awaited Maserati MC12 will make its
debut on Pirelli P Zero in the FIA GT
Championship next September.
Like the roads, the circuits are
Pirelli’s friends. On the best cars in
the world.
by Roberto Boccafogli, Milan
9
CORPORATE
Pirelli publishes its first “Shareholder Manual”
A Manual for All
A guide aimed at informing on the Group’s changes and developments in corporate governance
O
n 28 April 2004, in
the setting of Palazzo
Mezzanotte in Milan
(the headquarter of Milan’s Stock
Exchange), Pirelli presented
its “Shareholder Manual”. The
Group’s Chairman Pirelli Marco
Tronchetti Provera, present at
the event together with many top
representatives of the economic
and financial scenario in Italy,
commented the birth of this
manual saying: “Like many
major international businesses,
the Pirelli Group works with public
and private entities in numerous
countries and regions around the
world. Operating at the centre of an
extensive network of relations and
obligations, the Group grows and
develops by increasing the number
of its transactions and entrepreneurial
initiatives, by adding to its knowledge
through research, and by developing
innovative technologies and solutions.
Thus it fulfils its mission of generating
value for shareholders, customers and
employees.”
“The Group” – continued Marco
Tronchetti Provera – “can only pursue
this objective by working together,
more often in co-operation with individuals, corporations, institutions and
other bodies. All this presupposes not
only strict compliance with standards
and regulations, but also a fully shared
set of values, proper practices, and
total transparency. In short, the need is
to create a network of relations based
on trust. Indeed trust, built up over
time, together with the credibility of
its management, represents an intangible asset of immense importance to
Pirelli & C., both economically and
10
otherwise. It
is an asset
to safeguard
and to nurture constantly.
Our intention was and
is to make
the Company
increasingly
modern,
transparent
and competitive in its
organizational structure. However, for
more than 130 years, the name Pirelli
& C. has stood for trustworthy professionalism, and we have no intention of
departing from this great tradition, or
of abandoning our heritage of ethical
values. Times do change, and with
them legal and organizational requirements; but there must be no change
in our management style, a scrupulous
courtesy, loyalty and transparency
towards employees and consideration
for shareholders, on which Pirelli has
always focused.
This Manual has been written with
the specific intention of informing its
main readers - our shareholders - on
innovations to the Company’s
system of corporate governance. It
traces the steps in this rapid development, from the full implementation of the recommendations of
the “Code of Self-Government of
Listed Companies” to the rationalization of our shareholding
structure, placing all the main
activities under the auspices
of a single industrial holding
company. The Manual reviews
the adoption of the Ethical Code
and the finalization of a rigorous,
modern Internal Audit system and some
of the most advanced systems for environmental management and corporate
social responsibility in existence.
Finally, it describes the decision
to propose to the meeting a series of
amendments to our Articles of Association, in order to encourage further
all shareholders to participate in our
corporate life. The motions include one
to introduce a voting list for appointments to the Board of Directors. The
process I have just described stems
from the Company’s conviction, which
I personally share, that a well informed
shareholder is better able to participate
knowledgeably in decisions which may
be decisive to the Company’s success.”
The shareholder manual is divided
into two main parts: the first is devoted
to Pirelli & C. SpA; the second contains information and useful advice,
especially for small shareholders and
debenture holders, in particular on their
rights, means of accessing the information and documents of the Company.
The “Shareholder Manual” can be
consulted in Italian or in English on the
Internet site www.pirelli.com.
P.W.
TRUCK
Amaranto, the new truck and bus tyres
The Colour
of Success
With its investment of 100 million Euros over three years in
the new MIRS™/SATT™ technology, the Truck Tyre Business
Unit will continue to play a major role in the Group
P
irelli chose the magical city
of Naples and its captivating
folkloristic charm for the presentation of the Truck Tyre Business
Unit’s new FH85 Amaranto tyre for
industrial
vehicles
and buses
on 16 and
17 April.
More than
200 tyre
dealers
from
all
over Europe, plus 50
journalists
attended
a series of
conferences held
at Mostra
d’Oltremare. Apart
from the
weather, the
event turned out to be highly successful
and particularly important to the Truck
BU for more than one reason.
Not only because the new FH85
Amaranto was launched at the Naples
Truck Tyre Day, but also due to the fact
that the event heralded a new generation of products, born of the application
of second generation MIRS™ technology.
“The Pirelli Amaranto results from a
phase of ‘cross-fertilisation’ of MIRS™
process technology”, Francesco Gori,
Managing Director of the Pirelli Tyre
Sector, told his guests in Naples. “We
have always maintained that MIRS™
is not just
a robot, but
a concept.
We have
transferred
all
the
innovative
potential
represented
by the heart
of MIRS™
to the production of
tyres
for
commercial
vehicles”.
T h e
Amaranto is
made with
S AT T ™
technology, a spiraling process that has been
used to produce various of the tyre’s
components. That brings with it the
elimination of joints, with consequent
improvement in uniformity and driving comfort. Technological developments that Pirelli has derived from
the experience it has gathered over
the last three years by producing car
and, later, motorcycle tyres with the
MIRS™ system, as well as advanced
developments at the base of the new
product technology: SATT™ – Spiral
Advanced Technology for Truck - is an
applied science with which Pirelli identifies the high performance capability in
its truck tyres.
So Amaranto is not just a fancy name
with which to enhance the FH85 in
the marketplace. By tradition, it is the
colour that identifies high performance
Pirelli tyres, very much a characteristic
of the FH85 for trucks and buses.
The new Pirelli is the maximum
synthesis of the qualities required today
of high performance tyres designed for
long distance and motorway truck and
bus use: operational economy, structural uniformity, comfort, progressive
response and maximum driving precision. An extremely demanding segment
of application, in which testing carried
out before the official launch returned
optimum results.
The high performance capability
of the new tyre was well established
during a long series of indoor and
outdoor tests, conducted by Pirelli’s
test drivers, whose expertise and professionalism comprise the first severe
examination to which any new truck or
bus tyre is subjected.
During testing, the Pirelli Tyre Sector
also enjoyed the cooperation of major
Italian haulage firms and bus operators.
In sizes 295/80 R 22.5 and 315/80 R
22.5, the FH85 Amaranto was run for
thousands of kilometers on their fleets,
some of which do not normally use
Pirelli tyres at all, while others run a
mixture of different brands. That way,
the fleets reported in unbiased terms
on the new product’s performance, and
tested it against competitors’ products.
Positive test results were fed back
to Pirelli from the fleets, as they were
from those attending the Naples event.
Remarks like:
- “It is hard for me to revise the choice
made in the past in favour of other
brands, but now I have to change my
opinion. Pirelli is a valuable outsider”
(Autoservizi Cattaneo).
- “180.000 km with perfect integrity
11
range. The Business Unit has
and reliability. FH85 Amatripled its results in the last
ranto has overcome our drithree years”.
vers’ wariness, confirming
So the Truck Tyre BU conthe value of our choice”.
tinues to play a strategic role
(Chinotti Autotrasporti)
within the Pirelli Group, not
- “With the FH85 Amaranto,
only in terms of its relative
we have experienced a
The Truck Tyre Day
weight – 29% of total Tyre
tyre that fully satisfied our
event held in Naples.
Sector sales in 2003 were in
needs of ‘global perforthe industrial market – but
mance’ with a cost per km
also as a fundamental axis in
programme and the application of sophiwhich is really competitive
in terms of quality/price. (Air Pull- sticated systems of factory automation,” the tyre operation’s development. “We
explained Alberto Pirelli, director of have planned investments totalling 100
man).
- “We can confirm the ongoing impro- the Business Unit, “Pirelli production million Euros over three years, destined
vement of Pirelli tyres, linked to the centres specialising in truck tyres have to increase our production capacity”,
development of the performance of globally increased their output by over says Alberto Pirelli. “Already substannew vehicles. FH85 represents the 16% in three years. All plants that have tial in Europe and Latin America, we
best global performance we have achieved quality certification are accre- recently consolidated our presence in
dited with ISO 9002 and are managed Egypt, where production is slated both
tested so far! “ (So.tra.m).
Feedback that bolstered Pirelli’s by the TPM system. In respect of the for the promising North African /Middle
belief that its presence in this segment diverse production vocations, we have East market and for Europe. The next
of the market - particularly people reached an optimum integration of the step will be further reinforcement in the
transport - is at a turning point, and different requirements, with production markets of the greatest growth”.
by Valeria Aiesi, Milan
will be consolidated in the future by the investment privileging high growth
production and launch of other tyres markets and the renewal of the product
manufactured with the same MIRS™/
SATT™ technology.
FH85 Amaranto: the magic of steel and rubber
The Naples launch was also the
The
bead is the part of the tyre that marries itself to the rim and must resist slippage,
first event at which Pirelli was able to
remaining
firmly in place without moving from its seating. The Amaranto does this by means
confirm its commitment to the industry
of
special,
patented
bead wire in steel foil, which permits greater ease of fitment to the rim and
after a four-year period, during which
less
deformation,
so
ensuring higher mileage, even after the carcass has been remoulded. The
a new management strategy was put
new
belt
structure,
achieved
with reinforcement materials developed ad hoc for this application,
in place and began to yield successful
contributes
to
providing
good
driving comfort, while at the same time guaranteeing optimum
results.
resistance
to
phenomena
such
as oxidisation/corrosion, with consequent advantages for the
In 2003, the Pirelli Truck Tyre Busiremoulding
process.
ness Unit achieved a turnover of more
The rubber: this has been developed for the Amaranto so as to combine itself
than 870 million Euros, an increase in
in
the
best possible way with the tyre’s steel. The tread compound is also
volume of 9% on the previous year.
of
a
high
quality standard, able to guarantee low hysteresis (dry grip)
And over the last three years, the growth
without
penalising
roadholding in the wet or even wear. In its
trend has exceeded 16%. Faced with a
“front”
directional
configuration, FH85 Amaranto has a
competitive scenario characterised
tread
pattern
that
meets
European directive 2001/43/CE,
by increased raw materials costs and
which
requires
a
noise
level
inferior to 76 db. To that is
a negative exchange rate differential,
added
ECE54/INMETRO/FMVSS
119 (DOT) certificalast year Pirelli continued to expand its
tion,
which
testifies
to
the
conformity
of the product to the
sales and strengthen its market share.
more
severe
European
norms.
The Pirelli Truck Business Unit has
The tread pattern has four straight grooves to ensure
an optimum product manufacturing
low
severity of wear, essential to grand touring buses and
set-up in terms of allocation, with 20%
heavy
vehicles, which are habitually driven on motorway
of production in Italy and the remaining
networks.
The tyre tread’s dense siping guarantees out80% in countries of high market growth,
standing
wet
grip and even wear and the “small steps”
such as Brazil, Turkey and Egypt.
in
the
central
channels avoid the unpleasant phenomenon
“Thanks to the enactment of an industrial rationalisation and investment
12
AWARDS
The eighth edition of the Pirelli Internetional Award
Exploring the Brain
Through the Internet
The winner of the 2003 competition - an American multimedia network - created an Internet
site to explain the most secret workings of the human brain, from infancy to old age
Salvatore Ricco reports from Rome
T
he Pirelli Internetional Award
(www.pirelliaward.com),
launched in 1996, is the world’s first Internet multimedia award.
Its aim is the diffusion of scientific
and technological culture worldwide,
awarding multimedia projects able to
explain complicated concepts in a sim-
ple and visually friendly manner.
This year, on the 27 May, the
awards - for a total of 100,000 Euros
- have been assigned in the historic
Temple of Hadrian, in Rome, during
ceremony attended by Marco Tronchetti Provera, Chairman of the Pirelli
Group, and many representatives of
the Italian technological world. After
having evaluated more than 1,700
entries, the international jury assigned
the awards, subdivided into three main
categories: Multimedia Education,
the Environment, Information and
Communication Technologies (ICT),
in addition to this year’s new Alice
Generation Award.
The 25,000 Euros Top Pirelli Prize
went to the American David Grubin
Productions and Thirteen/WNET,
which, in cooperation with Docstar,
created an effective multimedia presentation on the human brain; the
work, The Secret Life of The Brain
(http://www.pbs.org/wnet/brain/) has
also been awarded as the
best entry in Multimedia
Education. It is a virtual
journey inside the human
brain, the functioning
and evolution of which
are explained throughout
the various stages of life, by means of
videos, animations and detailed scientific data. “We believe that the diffusion
of scientific and technological advances are as important as their discovery”, stated Marco Tronchetti Provera.
“This Award fully reflects Pirelli’s
spirit, because it merges research and
technology with transparency and
divulgation of knowledge.”
The Environment category has
been won by NASA, with the project
NASA’s Sun-Earth Viewer (http:
//ds9.ssl.berkley.edu/viewer/flash/flash/
html/) on the interaction between
the Sun and the Earth, and a publicprivate partnership of Melbourne
(Australia) for the multimedia work
Home Water Investigator (http:
//www.curriculum.edu.au/projects/
enviro.htm).
The ICT Award went to the Romanian firm ATS (Advanced Technology
Systems) for the e-government project
Atlas (http://www.ats.com.ro), an integrated information system for local
public administration in Romania.
The first edition of the Alice Generation Award, offered by Telecom
Italia and reserved to projects by
Italian creators attracted over 420
entries. The Senior category (worth
15,000 Euros) has been won ex aequo
by the INFM – Istituto Nazionale per
la Fisica della Materia, for the Project
Energy and its transformations (http:
//maccw.sns.it/energia),
dedicated
to physics, and by an interuniversity
group from Milan for the interactive
exhibit Matemilano (maths+Milan)
(http://matemilano.mat.tnimi.it). In the
Junior category, for under-21 candidates, the winner has been the Nautical
Institute Nino Bixio of Piano di Sorrento (Naples) with the project Water:
the world of algae, which has been
awarded 10,000 Euros.
13
MOTO
Latest news from the BU Moto
Overall
Winners
Six victories in the Superbike Championship, 86,000
spectators at the race in Monza, test victories for the Sportec
and Roadtec: Pirelli Moto is covering itself
with glory on both the racing and road tyre fronts
P
irelli is flexing its muscles for all the riders in the three classes
across the whole motorcycle of the series, so the sheer numbers
market: a statement which is involved in this new project are
impressive.
convincinThey inclugly confirde eight
med by the
trucks that
incredible
travel all
press coveover Eurorage
the
pe with a
brand
is
full-time
r e c e iv i n g
s t a f f ,
both on its
supported
products
by local
and
its
importer
racing sucpersonnel
cess.
in
each
T h e
host counSuperbike
try to make
Supersport
up a team
W o r l d
of 25 PirelChampionli specialiship and the
sts at every
European
event: and
Superstock
Pirelli
C h a m takes an
pionship,
average of
for which
5,500 tyres
Pirelli is the
to
each
official tyre
race. All of
s u p p l i e r,
which is a
passed the
Régis Laconi on the podium at Monza.
significant
half way
undermark of six
events with the June races, and the taking in terms of technical expertise
commitment is substantial. As it has and logistics. But it is also a clear
exclusivity, Pirelli supplies the tyres statement of Pirelli’s confidence in
14
its products, laced with its inevitable
desire to show that the company can
meet the needs of such a resoundingly successful world championship
series on both the technical and promotional fronts.
The halfway point is a good juncture at which to take stock of this
initiative, and the first assessment
has produced extremely satisfactory
results.
The basic reason for Pirelli being
the exclusive tyre supplier to the
championships is to provide every
competitor, from the novice privateer
to the fastest works (experience)
rider, with the same level of tyre
choice, quality, service and advice
to give each one of them the chance
to lap competitively and consistently;
a goal that has been fully achieved.
So far this year, there has been some
breath-taking racing, a constant turnover on the podium of both works
riders and “wild cards” - and the
championships are still wide open,
with an ever-changing list of potential winners jockeying for position to
make the series really exciting.
The benefit to the series of a single
tyre brand has now been completely
understood by the teams and manufacturers. Carlo Fiorani, Honda’s
racing chief in Europe, visited the
Monza race, and he was positively
impressed by the championships’
high technical level and riding standards. In an MCN interview, Fiorani
also recognised the fact that the Pirelli control tyre rule has worked and is
giving the riders an equal chance of
success.
An immediate confirmation of the
increased interest for the Championship came from Pirelli’s home race
at Monza, where a crowd of 86,000
spectators – 14,000 more than last
year – watched some thrilling racing
and a Pirelli parade on the track just
before race two, headed by Radio 105
DJ Ringo.
These rejuvenated championships
are also attracting the attention of all
the media, in which Pirelli brand visibility is reaching a really impressive
level. Monitoring only the 30 most
important international television
channels among the 85 stations covering the series, the Pirelli logo could
be clearly read on TV screens across
the world for a total of 15% of the
whole race transmission time.
Success also stems from other
“open” world championships, like
motocross in which Pirelli is still
perpetuating its supremacy of many
years’ standing, leading the 2004
world title chase with Stefan Everts
and no less than four riders in the top
six positions.
And Pirelli has won in China,
where the People’s Republic opened
its doors to a motorcycle racing
championship for the first time.
Under the patronage of the Fédération Internationale Motocycliste, a
six-hour race in the World Endurance Championship took place on
the Zuhai circuit between Macao
and Hong Kong. An event won by
the French team GMT94 and their
Yamaha R1 on Pirelli Dragon Slick
16.5.
Pirelli is not only harvesting
victories on the racing circuits of the
world, it is also winning product tests
in the specialist motorcycle press.
The company’s flagship tyre, the
Diablo, won the latest test carried out
by Bike magazine in May, when the
tyres under examination were Bridgestone BT014, Michelin Pilot Power,
Dunlop D208, Metzeler Sportec M1
and Avon Azaro SP Sport. The Diablo
chalked up optimum results in ride
quality, feel under breaking, turn-in,
cornering grip, steering precision,
flickability left to right, drive out of
turns and confidence, scoring higher
than any other in rider feedback and
setting the fastest lap time. Looking
at all-around performance, Bike
magazine’s 2004 sports road tyre
test concluded, “there isn’t much that
comes close to the Diablo”.
by Ilaria Casarini, Milan
Sportec M-1 and Roadtec Z6:
comparative test winners
A highly positive feedback
on Metzeler’s latest products,
Sportec, Racetec and Roadtec,
has come from German press
tests. More than three years
after its launch, Sportec M-1
is still top of the Supersport
tyre segment. The last of a
long series of test victories is
the tyre’s win in the German
magazine Motoroad’s comparative test. Fitted on the
Supersport Suzuki GSX-R 750,
the publication said of the
Metzeler, “On normal roads,
no matter if dry or wet, with
the Sportec M-1 there is little
room for further requirements
from the rider”. That is how
the German test riders saw the
situation, highlighting the quick and precise feedback as one of the M-1’s most impressive characteristics. On top of that, the Sportec’s outstanding dry grip and cornering
stability make it literally “one of the best sport tyres, with the highest performance and
an extremely safe feeling”. The three-year-old Sportec M-1 achieved a higher rating
than the latest products unveiled by Metzeler’s competitors this year.
In the French MotoRevue test, that winning tradition was
confirmed once more, this time by the Roadtec Z6, part of
Metzeler’s backbone segment of Sport Touring radials.
Using the brand new Yamaha FJR 1300, the latest
product of the only two-wheel specialist brand scored outstanding results, due to its performance in
trajectory precision and its progressive handling
characteristics. The successor to the glorious ME
Z4 emerged as the new benchmark for its behavior
in the wet, dry grip and ease of trajectory change.
The new tyre has been developed to enhance the
performance of the latest sport touring bikes, for
extended riding pleasure.
Metzeler’s product performance has also been
recognised in sports circles. The new Racing
Supersport tyre, Racetec, which was successfully
presented to the international press earlier this year
at Spain’s Valencia circuit, is to compete in the National Supersport Championships,
helping the most competitive
teams in their pursuit of the
title.
by Andrea Clerici, Milan
15
RISK
Pirelli wins the
“Best Loss Prevention Strategy” award
Excellence in
Risk Engineering
Risk management and loss prevention are two very important themes to face in a
company: here is how Pirelli has built an efficient and winning structure
to implement them within the Group’s culture
P
irelli has been named the winner of the “Best Loss Prevention Strategy” award, as part of
the “2004 European Risk Management
Awards” organised by the prestigious
British magazine, “Strategic
Risk”. The award was received at a ceremony in London
on May 13 by Luca Laghi,
Group Risk Engineering and
Loss Prevention Manager,
accompanied by myself,
Group Risk Manager.
The award recognises
excellence in the management
of Pirelli’s risks by the use of
effective risk identification
and risk assessment and the
implementation of an effective property loss prevention programme, leading
to measurable risk mitigation.
The award is a recognition of the
results achieved by the Group in this
field in the past 10 years. It was in
1993 that a brand new concept of
Property Conservation was launched
in the Group and the implementation
of the new Property Loss Prevention
programme was initiated.
The starting point was the recognition of the need of a more effective
management of our risks, and particularly of those threatening our industrial
plants in terms of hazards such as fire,
earthquake, flood and storms. Insuran-
16
ce is a very important and effective
way of transferring such risks to a third
party (the Insurance Company), but
the cost has to be kept under control
as well as the amount of risk which,
one way or the other remains on the
shoulders of the insured company.
In fact the insurance policy always
foresees deductibles (or “self insured
retentions”), limits of indemnity, and
exclusions, and so every loss has a portion not paid by the insurer. At the same
time, the lack of an adequate policy in
terms of physical protection of the
Group’s properties, can result in an
escalation in the number of losses, and
this, together with exogenous market
factors, may result in an escalation of
the level of the insurance premiums.
More importantly, losses can result in
a reduction in market share that may
never be fully recovered.
When the frequency and magnitude of losses increase, the insurance
premiums escalate, and the uninsured
portion of losses becomes bigger, it is
time to seriously work on risk control
and loss prevention rather
than concentrate just on risk
transfer. These were the
considerations that lead the
Group’s Management in 1993
to establish a global property
loss prevention programme.
The responsibility of designing and implementing such
a programme was assigned
to the Risk Management
Department, which in turn
decided to set up a dedicated
Risk Engineering team. The first step
was to issue of a Property Conservation
policy, stating very clearly the commitment of the Group in this field, and a
Loss Prevention Manual detailing the
guidelines and the technical tools to be
used for the achievement of effective
risk mitigation.
However the actual achievement of
such risk improvement and mitigation
has not been left to the plants on their
own. Our Loss Prevention Engineers
visit each of the plants on a regular
basis, and after each visit issue a report
detailing the current status of the
risks and all the identified actions for
improvements, which are formalized in
Risk Improvement Recommendations.
Since the inception of the Loss Prevention program, almost 600 inspections
have been carried out and almost 2,500
recommendations have been issued.
The Risk Engineering department also adopted a “rating system”
allowing the clear identification of the
areas of strength and of weakness of
each plant in terms of risk awareness
and of risk mitigation measures. The
rating system was designed to provide an easy and effective “intragroup
benchmarking” tool for our plants, but
also to be recognized by the international insurance markets as a measurement of our improvements. Since the
rating system is a numeric rating, it
also allows the calculation of average
ratings by country, sector,
and for the entire Group
When the program was
initiated in 1993 the average rating for the Group
was 35 points (equivalent
to a fair level), but several
plants were ranking worse
than average and were considered by the international
standards “poor facilities”.
The top category in the
rating system is defined as
HPR or Highly Protected
Risk, and a plant, in order
to qualify as HPR has to
fulfill all of the requirements of the most restrictive international loss prevention codes, both in
terms of physical protection (hydrants,
fire pumps, automatic extinguishing
systems, etc..) and in terms of organizational procedures aimed at the prevention and control of hazards. Since
the implementation of the program in
1993, 47 plants all around the world
have reached the HPR qualification.
At the end of 2003, the Group reached
an overall average rating of 10, which
is considered as an “Average HPR
rating”.
No plants rated as “poor” remain
and very few are rated “fair”, whilst
the majority are either “Good” or
“HPR”. Another measurement of the
work that has been done is the fact that
out of the 2,500 recommendations,
almost 85 % have been implemented,
including numerous recommendations, involving significant investments in protection tools such as automatic
sprinkler systems.
The Risk Engineering
department expands
In the meantime, the Risk Engineering department expanded its area
of activity from the traditional loss
prevention activities to new areas.
Several projects have been launched
in the past 3 years aimed at a more
precise mapping of specific categories of risks, and/or the identification
of possible tools for controlling or
mitigating such risks.
Among these projects, it is worth
mentioning the ones dedicated to the
precise and detailed mapping of the
natural hazards exposures, such as
earthquake and flood. Thanks to the
work of our risk engineers, supported
by outside consultants and by very
sophisticated simulation software and
very complete databases of historical
events, a detailed mapping of earthquake and flood exposures has been
completed. This allows an optimization in the purchasing of the limited
insurance coverage available, but even
more importantly, allows to program
and to assign the right priority to the
investments needed to mitigate such
exposures.
Another area where our risk engineers have been particularly active
is the in depth analysis of the loss
of profit exposure resulting from an
accidental interruption of the activity
at our plants (business interruption
exposure). This analysis is conducted
taking into consideration the overall
integrated Group’s perspective, whereby the various plants are interconnected, and an interruption at one of
them could also affect others. Even
certain critical suppliers, if affected
by significant losses leading to the
interruption of their activity, might
have an undesired business interruption impact on our own
plants. Possibilities of
“mutual aid” plans have
also been taken into consideration in terms of the
potential positive contribution to reduce the overall
business interruption loss.
This analysis is known as
Business Impact Analysis,
and its results, beside their
intrinsic value in terms of
risk mapping, can also be
used as the basis to develop
more effective Business
Continuity Plans, i.e. set
of pre-defined measures
allowing the fastest possible return of
the business to the conditions existing
before the catastrophic event.
All in all, the award received confirms the level of excellence that our
Group has reached in this field. No
need to say that there is always room
for improvement and that even those
plants which already reached the
HPR level have to be continuously
monitored to guarantee that the high
standard achieved with so much effort
is maintained. That’s why the work
of our Risk Engineers and our Risk
Management department has to continue with dedication and intensity.
by Maurizio Castelli, Milan
17
HEALTH
Health at work
Turkish Blend
In February Pirelli launched a No Smoking campaign for all the
Group companies all over the world. How has it been applied
to all the different realities? Let’s start by looking at Turkey...
Above, the No Smoking sign in one
of the Turkish offices. Below, the positive
effects of quitting smoking according
to Turk Pirelli.
T
he three separate companies
that comprise Turk Pirelli
- Tyres, Cables and Systems
and Steelcord - introduced their own
blend of a no smoking campaign in
February, in line with Giovanni Ferrario’s initiative of earlier this year,
aimed at turning the Pirelli Group
into a no-smoking organisation. The
Turkish operation affects a total of
almost 2,000 employees in both their
offices and factories. As with the
18
Pirelli Group undertaking, the Turkish
campaign is in support of creating a
no-smoking company atmosphere and
culture, and a healthier working environment for all of its employees.
First, the Turk Pirelli companies
introduced and implemented an action
plan that specified the initiatives to be
undertaken within its headquarters and
plants. Then it put teams together at
each location to flesh out the project
and execute it. Next, common areas
like offices, the production sites and
dining areas, where employees spend
most of their time in all three factories
were examined and reorganised at the
headquarters, as laid down by the no
smoking campaign. In addition, information and dissemination activities
were conducted to acquaint employees
with the initiative and the effects of
smoking on health.
In particular, at Türk Pirelli Cables
and Systems, actions undertaken included the construction of a separate rest
room in the dining area for smokers
and the prohibition of smoking everywhere else; the identification and
consequent restriction of a smoking
area in the production site, where flammable materials are
used; an information campaign for
the employees by
e-mail (sent to all
individually) and
by a brief seminar
(to be held within
the next months by
a specialist) on the
negative effects of
smoking on health.
As far as the Türk Pirelli Tyres
company is concerned, signs have
been placed in affected areas, smoking
restricted and Mr. Ferrario’s Internal
Rule and No Smoking Campaign
doctrines published on the Intranet.
An air extraction system will be installed in all smoking areas, the internal
personnel procedure has been updated
and the necessary changes made. Türk
Pirelli Tyres has also established an
on-going relationship with the Fighter
Against Smoke association, in order to
produce and distribute anti-smoking
brochures, information and training
programmes.
At Steelcord, the campaign is
moving ahead in a similar way.
Signs have been put up and smoking
restricted to specified areas, but other
“motivation” initiatives are also taking
place. For example, employees who do
not smoke at work for at least six months are rewarded with a dinner offered
by the company. Moreover, employees
can obtain informative material and
documents on the theme ‘Fighting
Against Smoke’ in many areas of the
buildings.
In general, reaction to the campaign by smoking and non-smoking
employees has, of course, been twopronged. Although the undertaking has
been welcomed by most employees in
the offices and factories, initially
smokers expressed their dislike for
the restrictions. But, most smokers
do accept that such action is inevitable if the health of non-smokers is to
be protected. The non-smokers point
of view is that they are pleased with
the campaign, and that the smoking
restrictions have created a healtier
place in which to work.
Besides that, it is a fact that smokers have decreased the number of
the cigarettes they consume each day
since the implementation of the campaign. Turk Pirelli hopes that one day
all its employees will stop smoking as
a result of this sweeping initiative.
by Aylin Olsun, Istanbul
EVENTS
The Pirelli Trophy charity match
Not Only Football
Stars of Italian TV, cinema and radio turn out on a hot Monday night in the famous San Siro
Stadium in Milan to play for charity, to raise funds for underprivileged children
ver 32,000 tickets sold,
132,000 Euros raised: a
success. Those are some of
the numbers that count after the ninth
Derby del Cuore-Pirelli Trophy charity
football match, held at the impressive
San Siro Stadium in Milan, on a sultry
28 June. A traditional, light-hearted
soccer challenge between two teams of
famous Italian actors, singers and show
business personalities, one squad wearing Milan’s red and black strip and the
other Inter’s blue and black stripes.
Pirelli has sponsored the event for
many years, collecting the proceeds
and then donating them to a network
O
used to seeing in completely different
circumstances, who make themselves
available for a charity match that brings
enjoyment to everyone, without asking
for anything in return.
So that warm June night at San
Siro, players like Vieri, Schevchenko,
Adriano, Kakà had made way for no
less famous, top-rated TV programme
of charities that care for less fortunate
children, keeping development projects
going in various countries across the
world.
Like all football matches in Italy, the
Derby del Cuore is always an event in
itself. This year, perhaps, even more
so: the players included TV presenters, journalists, singers, radio and
cinema stars. Faces that people are
presenters, comedians, stars of reality
shows – and some immensely popular
DJs. And the stadium rose to its feet to
cheer the showbiz players’ surprising
skill with the ball and some deadly
shooting power. They also thrilled to
a phenomenal two-goal finale by the
dj Fargetta, star of one of Italy’s most
popular radios. Commentary and the
inevitable interviews were by two gor-
geous members of the Italian TV star
system, while on the bench a look-alike
of Fabio Capello, the new Juventus
team manager, was in a state of constant
agitation. Before kick-off, there was a
parade of girls carrying the national
flags of all the member countries of the
European Union, followed by a multicoloured firework display that signalled
the start of the game.
Despite the hot weather, the players put everything into 90 minutes
of pure entertainment
and some quite flashy
football. Inter went into
the lead immediately
with a penalty that was
cracked into the net by
Paolo Bonolis, Italy’s
king of the TV presenters. Then Inter
got stuck into a counter attack against
a harder working Milan, who equalised.
But black and blues went ahead again
and produced another two goals…
but then came the big surprise. A few
minutes before the end, it looked like
the visitors would romp home to a 3-1
win, but they did not reckon on talented
DJ Fargetta – a footballer in days gone
by – who injected some real excitement
into the game with two devastating
goals that took the score to a 3-3 draw
in the 44th minute.
As was so often was the case with
the European Championship, the Derby
del Cuore also went to sudden death
penalties, not exactly the speciality of
the Inter stars. They were off target too
many times and so Milan eventually
took the honours by making it 5-3.
by Daniele Pirola, Milan
19
COMPETITIONS
FIA GT Championship
Pirelli-Shod
Victories
Saleens and Ferraris on Pirelli P Zero tyres
make the motor racing world sit up and take notice
with victories and fastest laps galore
T
he last three races in the FIA
GT Championship certainly
left no-one in doubt about
the excellent form of the Pirelli tyres
that equip the Saleens of Team Konrad
Motorsport and the Ferrari 575 and
360 of GPC Squadra Corse. At Magny
Cours in France from 30 April–2 May,
the Konrad team revelled a great
weekend in which the Pirelli-shod
Saleen S7-Rs dominated all three days,
ending up with a first win of the season
for Michael Bartels and Uwe Alzen.
During free practice at the French circuit and in changeable weather conditions, cars number 4 and 5 of Alzen and
Lechner recorded the fastest lap times
of the day. In qualifying on the second
day, the team impressed its opponents
by taking pole position and the second
place on the grid. And during the prerace warm-up, the Saleens confirmed
their perfect equilibrium and absolute
compatibility with the new tread compound of their Pirelli P Zero tyres which
turned out to be a fundamental contribu-
tion to a Saleen-Pirelli victory at Magny
Cours and was a sensational conclusion
to the weekend.
Magny Cours:
the Saleen-Pirelli shine
The French race saw the SaleenPirelli duo in top form: the winning
Saleen had inflected almost a minute’s
deficit on the second placed Ferrari 550
of Matteo Bobbi and Gabriele Gardel,
even after being hit with a 50” penalty
for coming into contact with a Saleen
driven by Walter Lechner jr. The Saleen
topped off the day by also setting the
fastest lap time, all of which showed
the real potential of the car.
There were some teething troubles for
the Ferrari 575s of GPC Squadra Corse:
the Emanuele Naspetti-Mike Hezemans
car number 13 retired with mechanical
problems. The Fabio Babini-Philippe
Peter number 11 Ferrari had a difficult
race, due to an aerodynamic component
being broken by wreckage left on the
track after an accident.
Uwe Alzen in action during
the qualifying session
at Brno, Czech Republic.
20
In the N-GT class, the Pirelli-shod
Ferrari 360 shone in qualifying by
taking pole position ahead of the Porsches, but was hit in the back by a JMB
Team Ferrari 575 on lap 69 and was
forced to retire.
At the Hockenheim race in Germany,
on 14-16 May, wreckage left on the
track by a number of collisions denied
GPC Squadra Corse’s Babini and Peter
their first win. The Italian team’s Ferrari
575 hit some of the wreckage a minute
from the chequered flag and punctured
a tyre.
The P Zero-fitted Saleens driven by
Michael Bartels and Uwe Alzen and
Walter Lechner- Thomas Seiler did not
win their race, but they did dominate
the weekend: Lechner took pole with
Saleen number 4 on the Saturday and
on the Sunday the Bartels and Alzen
car 5 ruled the race until starter motor
trouble meant they could not re-start
the car following their second pit
stop. Meanwhile, Fabrizio De Simone
and Christian Pescatori were keeping
the Porsches at bay, leading their race
and had put up the fastest time in their
category. But an electrical fault with
their Ferrari 360 GTC meant they lost
precious minutes trying to sort out the
problem during their last pit stop – and
saw victory slip from through fingers.
Brno: Pirelli tyres score a full house
For Pirelli, the weekend at the Czech
Republic’s Brno circuit from 28-30 May
turned out to be the stuff that dreams are
made of: the tyres scored a full-house.
Victory for the Michael Bartels-Uwe
Alzen Team Konrad-Vitaphone Saleen
and the Ferrari 360 of GPC Squadra
Corse driven with flare by De Simone
and Pescatori, who also took their category’s pole position. The P Zero-fitted
Saleen literally dominated the race, zipping past Bobbi in the Ferrari 550 at the
start. Then, in a continuous crescendo,
the Saleen-Pirelli drivers recorded the
fastest lap of the race before losing a
wheel and a position. But the BartelsAlzen car climbed up through the field
again, its tyres still running efficiently
SOCIAL
after 30 laps of racing, to cross the
finish line and take the win.
“A perfect race”, said Uwe Alzen,
“and I would like to thank the team,
which has worked so hard for this success, as well as Pirelli, because they helped us to a performance that thrashed
the competition”.
A top-level performance also came
from the Ferrari 360 of Fabrizio De
Simone and Christian Pescatori in
the N-GT category. After taking pole
on new construction Pirelli tyres, the
drivers confirmed their excellent form
and the car-tyres’ tremendous technical
potential in their fight against the Porsche opposition.
The Donington Park race
In round 6, in the United Kingdom
at Donington Park, once again optimal
performances obtained from the P
Zero Saleen: the best time obtained in
the free practice, the pole conquered
by Walter Lechner Jr. on wet track
and the victory, after the nr 17 JMB
Racing Ferrari 575 had been given a
five-minute penalty for breaking parc
fermé regulations. All confirmation
that the Konrad – Vitaphone team cars
offer always great performances and
form a great binomial with the Pirelli
P Zero tyres of last generation.
The second step of the podium
has been gained by Babini and Peter,
drivers of the Ferrari 575 Pirelli equipped of the GPC Squadra Corse team.
These drivers unfortunately have lost
more than 20 second in the first pit
stop arriving slowly to the box due to
problems at the fuel feeding: the delay
accumulated, although the double stint
with the same tyres, therefore it has
not allowed a direct comparison with
the 575 of the competition. In NGT
class, one-party Porsche podium with
Ortelli on the first position, while De
Simone and Pescatori with their Ferrari
360, also for a contact had in race with
the Wendlinger’s Ferrari, have had
difficulty to express themselves during
the race.
by Emanuele Balbo, Milan
Solidarity in Venezuela
A Support to
Be Proud Of
Pirelli Venezuela’s policy in the social field is to help
the local communities by sponsoring projects to fight
drugs and diseases, support hospitals and create
sports teams for street children
The Pirelli plant in Guacarà.
P
irelli is not just an industrial
company which produces
tyres and cables; it is also
a sensitive organisation that concerns itself with people’s well-being
and culture. Latest confirmation of
this policy comes from the Group’s
Venezuelan office, which has made
sure its plans include a series of both
social and cultural events and a wide
range of initiatives that are aimed
directly at the well-being and enrichment of life in local communities.
One such venture is Pirelli
Venezuela’s participation in, and
promotion of, the Salón Pirelli de
Jóvenes Artistas, an exhibition of
young artists’ work and an event that
brings together more than 50 creative
Venezuelans between the ages of 18
and 35. This bi-annual undertaking is
held in the impressive surroundings
of the Caracas Museum of Modern
Art, which houses the works of world
famous artists. The exhibition is characterised by its freedom of expression, and the support it receives from
the company allows the young participants to communicate their ideas in
an avant-garde and modern way. The
event has launched some outstanding
artists, some of whom have gone on
to exhibit beyond the shores of their
own country. Pirelli Venezuela sup-
21
ports this young talent by awarding
cash prizes and citations for the work
shown, so taking part in the project
gives the youngsters a solid start to
their careers.
In the social context, Pirelli
Venezuela actively attempts to establish close links with its surrounding
communities, as confirmed by the
different donations and sports sponsorships it provides.
The contribution the company
makes to the Hospital de Niños de
Guacara is an important source of
support for the institution, which
provides medical care to children
from poor families. This enterprise
is a good example of how Pirelli is
always looking ahead, secure in the
knowledge that these children are the
agreed to form a partnership with
the country’s Ministry of Health
with a view to eradicating one of
the illnesses that afflicts much of the
population. It is called dengue
fever, an infectious disease
carried by mosquitoes,
and comes from any one
of four related dengue
viruses. The illness is
often called break-bone
fever, because it sometimes
causes severe joint and muscle
pain, and it can lead to death by fatal
hemorrhaging. Dengue fever first
broke out in Asia in 1780, but it has
now spread to most Latin American
countries. In order to help prevent
further propagation of the disease,
Pirelli Venezuela is contributing to
Bonding with
the local
community
World distribution of dengue fever
foundation of the Venezuelan society
of the future. Pirelli makes regular
gifts of medical equipment to the
hospital to help ensure the local
people have a better quality of life.
The hospital not only serves Guacara, the town in which the company’s
factory is located, but also four other
neighbouring communities. So Pirelli Venezuela is justly proud of this
commitment, which it took on two
years ago, and is developing well.
Placing great emphasis on the
importance of good health, the
Venezuelan subsidiary has also
22
ts. It does so by, providing them with
advice through a social programme
called “Un camino seguro sin drogas” - a safe, drug-free path. Pirelli is
providing support, by increasing
awareness of the terrible toll
that the deep-rooted drug
problem has taken on
Venezuelan society.
Another way in which
Pirelli Venezuela is involved in the fight against
drugs is through its sponsorship of sports teams. The company
plays an extremely active role in a
number of different sports, including the Escuela de Fútbol Pirelli
football school, which provides
support for youngsters of between
6 and 16. The school has scored
some notable victories in its various
matches
against
other
Venezuelan
clubs while wearing
its Pirelli strip.
Another initiative
is Pirelli’s support
of the Escuela de
Béisbol
Menor
Pirelli junior baseball school, which
has also achieved
good results, and the
company provides
its patronage for
a new form of the
sport known as flat
football, which is played at university level in the country.
So Pirelli Venezuela can certainly
say that, not only is it a manufacturer
of top quality tyres, but it also passes on its top level experience and
support to the country in which it
operates. “In Venezuela, our brand is
growing stronger from day to day”,
said a company spokesman, “but
being involved in this way with the
local people is a real source of pride
to us”.
by Xavier Bracamonte, Guacarà,
Venezuela
the development of a publicity campaign with which to increase public
awareness of the need to eliminate
stagnant water, in which mosquitoes
thrive. The campaign is now being
introduced at the company’s sales
outlets on a national level.
Pirelli Venezuela is also becoming
deeply involved in the fight against
drugs and has signed an agreement
with CONACUID – the national
commission against illegal drug
use – an organisation dedicated to
fighting and preventing drug consumption by young people and adul-
Petter Solberg
on his Subaru
during one of the
rough stages of the
Turkish Rally.
The World Rally Championship
Going for it
With 19 world titles to its credit, Pirelli now lies second in the
2004 drivers’ and third in the constructors’ world rally championships
T
hird, at not much more than
36 seconds behind the winner.
That was the finishing order
of the Rally of Turkey, the seventh
round in the 2004 world championship,
as seen from Petter Solberg’s point of
view. Reigning world champion after
the triumphant finale of last season, the
Norwegian driver was undoubtedly the
man to watch on the Turkish unmade
special stages. In fact, it was on such
rough surfaces that he delivered the
coup de grace to his opponents to win
last year’s title. And it is worth remembering that in 10 years of techno-sports
partnership – this is the 11th – the
Impreza and its Pirelli P Zero tyres
have performed best on special stages
of earth, stones and gravel.
Rough surfaces
But this year, the equation seems
even more precise. Since it made its
debut, the Subaru Impreza WRC 2004
has competed in five world title rallies.
All on rough surfaces. The car’s maiden outing was in Mexico in March,
when Solberg dominated the event,
until a disciplinary decision stopped
him in his tracks. In New Zealand
in mid-April, absolute domination
to commemorate the debut of a new
Pirelli tyre with a KP structure: developed to perform better on that strange
and dangerous condition midway
between wet and dry and right on target - victory.
Then, Cyprus. More domination:
Solberg’s pace was impossible to beat.
Until an unfortunate landing after a
jump: earth sucked into the radiator,
engine flooded and risked cutting out,
another win had gone up in smoke but
not a useful placing. The Greek triumph
at the beginning of June was a classic by
the now legendary Subaru-Pirelli duo.
Incredibly hard, unmade stages, almost
mythical, the most perfidious in the
world rally championship thanks to (it
would be better to say because of) extremely high temperatures. This mix of
environmental conditions often ends up
bringing cars, drivers and tyres to their
knees. But not so Subaru and Pirelli.
Solberg’s rivals commented on his
domination in Greece. Sebastian Loeb
said, “Against those tyres, there was
nothing left to aim for except second
place”. And now, Turkey. A long way
from victory, because of a famous ford,
Solberg still won six special stages. His
young team mate Mikko Hirvonen came
sixth in his first world championship
rally finish in Turkey. The conditions
were almost always difficult, with hot,
rocky special stages, but also tracts of
heavy mud on the first day after an
unheralded thunderstorm, which had
revolutionised the appearance of the
countryside. Surprisingly, in that mud
the KP-type tyres showed they could
perform outstandingly. When the stages
dried, the Subaru drivers moved on to
the exceptionally robust XR tread pattern, ideal for hard surfaces and high
temperatures, as well as capable of
being hand cut in the search for maximum grip in all conditions. Solberg said:
“I was impressed by the endurance and
resistance of the Pirelli tyres and the car
in one of the toughest rallies in which I
have ever competed”.
The longest season
On goes the world championship; with
nine more rallies in the longest season in
history. Of those, only three will be on
asphalt: Germany in August, Corsica
and Spain in October. The rest, all rough
with really fast gravel in Australia and
often in Argentina. On earthen stages as
smooth as a billiard table in Finland, the
harsh surfaces of Sardinia, which will
host the Rally of Italy in early October.
But Pirelli and its P Zero are not afraid.
No matter what they are like, unmade
special stages have made the P Zero
great in world championship rallying, a
sport in which the company and its tyres
have earned a total of 19 world titles so
far. Now Solberg and Subaru, second
and third in their respective championships tables, are arming themselves for a
lot more action.
by Roberto Boccafogli, Milan
23
STRATEGY
World Brief
Celebrations down Mexico Way
Pirelli’s commercial relationship
with Mexico began in 2001, when
Volkswagen adopted the Group’s
tyres as original equipment. Since
then, the German manufacturer’s
confidence in Pirelli products has
grown to the point that VW has
joined a P7 development project created especially for the 2004 Jetta (see
the picture above). The Jetta is the
top selling model in Mexico and is
also exported to the U.S.A. The 195/
65R15 91H P7 for the Jetta is made
in Brazil at Pirelli’s Campinas plant,
and then track tested in the Lone Star
state of Texas. Due to Volkswagen
Mexico’s complete satisfaction with
the P7, the tyre enjoys a large slice of
new car sales in Mexico. The German
car manufacturer recently celebrated
its 50th anniversary in Mexico with
an ad hoc-organised event, to which
Pirelli contributed a new size of P7.
Pirelli Cables and
Energy Systems
wins a contract in Argentina
Pirelli Energy Cables and Systems
– through its Argentine subsidiary
Pirelli Energía Cables y Sistemas
S.A – has been awarded a contract to
supply overhead conductors for the
24
realisation of a high-voltage power
network between the cities of ChoeleChoel (in the province of Rio Negro)
and Puerto Madryn (in the province
of Chubut). Under the terms of the
contract, which is worth approx. USD
10 million, Pirelli will supply more
than 3,000 km of 500 kV aluminum
conductors, which will be used to
realise two thirds of this Argentine
power line, with a total length of 354
km. The project - expected to last
about one year - is the first stage of a
wider plan of power interconnection
in Argentina between the province of
Patagonia and the rest of the country.
Le Mans 24 Hours:
the myth is renewed and
Pirelli wins the LMP2 category
More than 200,000 spectators supported their preferred teams and drivers at the 72th Le Mans 24 Hours.
The race was dominated by the Audis
in general classification, victorious
for the fourth time in five years, while
the Lola Judd Pirelli equipped of the
Intersport team has won in the own
category running with performances’
constancy for all the race. Binnie,
Field and Sutherland (see the picture)
have gained various positions in the
first half of the race, well supported
from the Pirelli covers that excelled
for reliability, allowing the Lola of
the Intersport Team to cover -during
the night- four consecutive stint with
the same rubber set. That has allowed
the American car to gain and remain
at the own category lead for the
following twelve hours. Pirelli Competizioni had provided its teams with
P Zero tyres recently tested at Le
Mans, and the result was particularly
appreciated by Pirelli’s drivers: both
in the warmth of the daytime and the
low temperatures of the night as they
offered good adhesion e and the best
consistency of performance.
WORLD
The quarterly international newsmagazine
for Pirelli management
APR-JUN 2004 - NO 39
www.pirelli.com
Published by Pirelli S.p.A.
Direzione Comunicazioni Esterne
Editor Fabio Magrino
Assistant Editor Livia Armellini
Editorial Consultant Robert Newman
Artwork Y&R Communications, Milan
Printed by Arti Grafiche Meroni, Milan