Purchases performance

The following graphics show the value of Pirelli Tyre purchases and percentage of suppliers broken down by geographical area. This information shows that the value of purchases in OECD countries is about the same as the value of purchases in non-OECD countries, but the number of suppliers in OECD countries is significantly higher. It should be pointed out that 76%1 of suppliers are located in the same area as the supplied Pirelli affiliates, in accordance with the Local for Local procurement policy.

PERCENTAGE VALUE OF PIRELLI PURCHASING BY GEOGRAPHICAL AREA*


2011 2010 2009
OECD
COUNTRIES
EUROPE 43.2% 50.0% 47.4%
NORTH AMERICA 2.6% 2.4% 3.1%
OTHERS 1.3% 2.5% 3.1%
NON-OECD
COUNTRIES
LATIN AMERICA 27.0% 18.2% 26.4%
ASIA 18.9% 20.8% 15.4%
AFRICA 1.0% 1.5% 1.4%
OTHERS 6.1% 4.6% 3.1%
* The figures shown above do not include the discontinued operations that belonged to Pirelli & C. Real Estate S.p.A. (now Prelios S.p.A) and Broadband Solutions. The figures for 2009 and 2008 were consequently restated on a comparable basis.
PERCENTAGE OF PIRELLI SUPPLIERS BY GEOGRAPHICAL AREA*


2011 2010 2009
OECD
COUNTRIES
EUROPE 59.2% 58.7% 63.5%
NORTH AMERICA 3.3% 3.2% 4.3%
OTHERS 0.3% 0.2% 3.4%
NON-OECD
COUNTRIES
LATIN AMERICA 25.5% 26.7% 22.9%
ASIA 5.2% 4.7% 4.5%
AFRICA 1.2% 3.0% 1.3%
OTHERS 5.3% 3.5% 0.1%
* The figures shown above do not include the discontinued operations that belonged to Pirelli & C. Real Estate S.p.A. (now Prelios S.p.A) and Broadband Solutions. The figures for 2009 and 2008 were consequently restated on a comparable basis.

For more complete information, another two graphics show a breakdown of purchases by Pirelli Tyre broken down by type and a snapshot of the number of suppliers corresponding to the types of goods/services acquired by Pirelli Tyre.

The following table, which shows the percentage value of Pirelli Tyre purchases by type, shows that raw materials remain the most important purchasing category, accounting for 58.5% of the total, while maintaining the growth trend of the previous years due to price increases. The total spent on “Capital goods” has also increased, being closely tied to the increase in industrial capacity during the period.

PERCENTAGE VALUE OF PIRELLI TYRE PURCHASES BY TYPE

2011 2010 2009
Raw materials 58.5% 55.4% 52.4%
Supplies 4.6% 4.6% 4.8%
Services 23.8% 28.7% 34.1%
Capital goods 13.1% 11.4% 8.8%

In regard to the second table, Percentage of Pirelli Tyre Suppliers by Type and Number, the criteria used to classify supply and service vendors were refined in 2010. The number of vendors in these two categories continues to account for more than 80% of the total, although their weight on the total value of purchases is much less than, for example, that for raw material purchases. The fragmentation of supply and service vendors is evident, in comparison with the substantial concentration of just a few vendors of raw materials.

PERCENTAGE OF PIRELLI TYPE SUPPLIERS BY TYPE AND NUMBER

2011 2010 2009
Raw materials 2.8% 3.0% 3.3%
Supplies 40.5% 38.9% 9.7%
Services 46.2% 47.3% 73.8%
Capital goods 10.5% 10.8% 13.2%

What follows is a graph illustrating the percentage composition of the mix of raw materials purchased by Pirelli Tyre in 2011. Alongside it we see the 2010 and 2009 data published in previous sustainability reports. Specifically in comparison with 2010, the weight of natural rubber rose in 2011 against a decrease in chemicals and textiles.

The volume of raw materials used in 2011 for the production of tyres was about 1 million tonnes, including about 7% derived from recycled material, with this last component growing continually from about 6% in 2010 and 4% in 2009.

MIX OF PURCHASED RAW MATERIAL

2011 2010 2009
Natural Rubber 35% 33% 24%
Synthetic rubber 27% 24% 23%
Carbon Black 11% 11% 13%
Chemicals 12% 14% 17%
Textiles 8% 10% 13%
Steel cord 7% 8% 10%

1 Does not include suppliers of raw materials