Prysmian, $180 million in investment and R&D in Brazil over 2009–2010

Objective: 25% growth in sales in 2010-2011 (on 2009).

New plant will start to produce flexible pipes in 2010: investment and R&D of $165 million.

$270 million invested in Brazil over the period 2007–2010.

Prysmian has presented its development plans for Brazil during the Business Mission to Brazil organised by the Italian government, Confindustria (Italian confederation of industry), ICE (Italian foreign trade board) and ABI (Italian banking association). The Group will have invested some $180 million in Brazil over the period 2009–2010, which, combined with investments made in 2007-2008, takes the total to around $270 million in the past few years, in this strategic country for the Group's worldwide growth. In the wake of the crisis-driven downturn in 2009, the objective is to increase sales in South America by around 25% in the period 2010-2011. The Group is particularly anticipating this business recovery on the basis of the effects of the growth-acceleration plan (PAC) launched by the Brazilian government for new infrastructure development and on its entry into the flexible pipes market for offshore oil extraction, thanks to its partnership with Petrobras.

"The agreement with Petrobras – explains Prysmian CEO Valerio Battista – represents a major step forward for Prysmian in expanding its business in the Oil Gas & Petrochemicals industry, confirming the Group's strategic commitment to investing in value-added, high-tech businesses requiring specialist know-how."

The strategic sectors on which the Group is focusing in Brazil are medium and high voltage electric cables, cables for the construction sector, optical fibre cables for telecommunications, and special cables for various specific industries. Prysmian's investments in Brazil are aimed at diversifying and further expanding its activities in the market of technology and products for the Oil Gas & Petrochemicals industry. After investing some $45 million in 2007 in building a new plant for umbilical cables (that connect offshore wells to drilling platforms), the Group plans to start producing flexible pipes in 2010. For the purposes of expanding into this new market, Prysmian will have invested around $125 million in building the new manufacturing facilities (against an initial budget of $110 million) as well as spent some $40 million on R&D. The new plant in Vila Velha will join the existing umbilicals facility in Vila Velha and will employ 100 people.

For its entry into the high-tech, specialist sector of flexible pipes, Prysmian can rely on its strategic partnership with the Brazilian oil major of Petrobras. In fact, Prysmian has signed a four-year frame agreement with Petrobras for the design and supply of flexible pipes. The initial value of material supplied under this agreement is $135 million. Other important orders will be placed under this agreement over the four-year period. In detail, Prysmian will supply a wide range of dynamic risers (flexible pipes and conduits that link subsea oil fields to drilling platforms or ships) and static flowlines (flexible pipes and conduits that link up the various components of subsea extraction systems), which can be installed in depths of over 2,000 metres.

Prysmian will develop this new range of flexible pipes under a series of Technical Cooperation Agreements with Petrobras. The first prototype flexible pipes, produced with machinery already installed in the existing Vila Velha plant, were recently presented at the Offshore Technology Conference in Houston, attended by the world's major oil industry players. The addition of flexible pipes to its current production of umbilicals will enable Prysmian to offer the OG&P industry a comprehensive range of SURF products (Subsea Umbilicals, Risers and Flowlines).

Present in Brazil since 1929 as Pirelli Cavi e Sistemi, the Prysmian Group is now one of the largest Italian industrial concerns in Brazil, active in all the more strategic businesses of the energy and telecommunication cables and systems sector, from high and extra high voltage systems to high-tech cables for the oil industry and optical cables for telecommunications. With six plants and one R&D centre, Prysmian has more than one thousand employees in Brazil. Over the years the Group has forged important partnerships with the country's foremost industrial players, such as the oil major Petrobras, large utilities such as Eletronorte and Eletropaulo, telecom operators like Telefonica, and construction and industrial groups like Siemens, Yazaki and Alstom.