Pirelli & C.

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Breakdown of Group purchasing by geographical area and type

The following table illustrates the geographical breakdown of purchases made by the Group, which are distinguished as OECD and non-OECD countries, with the “weight" of the various areas on the total amount.

Group purchases by geographical area - % of suppliers on total number of suppliers

2009 2008 2007
OECD countries Europe 68.7% 51.6% 69.9%
North America 3.8% 1.4% 2.1%
Others 2.9% 0.4% 0.2%
Non OECD countries Latin America 19.3% 25.4% 19.0%
Asia 4.1% 19.4% 7.3%
Africa 1.1% 1.8% 1.5%
Others 0.1% - -
100% 100% 100%

Group purchases by geographical area - % of purchases on total value of purchases

2009 2008 2007
OECD countries Europe 52.1% 50.7% 67.0%
North America 2.7% 1.3% 3.0%
Others 2.6% 0.4% 1.0%
Non OECD countries Latin America 22.6% 25.0% 13.0%
Asia 16.0% 20.9% 15.0%
Africa 1.2% 1.8% 1.0%
Others 2.7% - -
100% 100% 100%

The following table instead shows the breakdown of purchases by type of purchased goods and services, and the relevant percentage “weight” of the types of supplies over the total number of suppliers and over the total value of all purchases made.

Breakdown of Group purchases by type of goods and services / weight on total number of suppliers

2009 2008 2007
Raw materials 4% 3% 6%
Consumables 9% 6% 7%
Services 75% 82% 80%
Plant and equipment 12% 9% 7%
100% 100% 100%

Breakdown of Group purchases by type of goods and services / weight on total value of purchases

2009 2008 2007
Raw materials 49% 59% 48%
Consumables 4% 5% 5%
Services 39% 27% 39%
Plant and equipment 8% 10% 8%
100% 100% 100%

It should be emphasised that the goods and services purchased by the Industrial, Tyre and Eco Technology Sector – the Company’s core business – represent more than 80% of all purchases by the Group.

The following table shows the distribution by type of goods and services purchased by Pirelli Tyre and Parts in 2009 (and thus including the Eco Technology business for 2009, while the figures shown for 2008 and 2007 refer only to the Tyre business). The table also gives the percentage weight of purchases made in each category over the total number of suppliers and over the total value of all purchases made.

Breakdown of Pirelli Tyre and Eco Technology
Purchases by type of goods and services / weight on total number of suppliers

2009 2008 2007
Raw materials 4% 3% 6%
Consumables 10% 6% 7%
Services 73% 82% 80%
Plant and equipment 13% 9% 7%
100% 100% 100%

Breakdown of Pirelli Tyre and Eco Technology
Purchases by type of goods and services / weight on total value of purchases

2009 2008 2007
Raw materials 53% 59% 48%
Consumables 5% 5% 5%
Services 34% 27% 39%
Plant and equipment 9% 10% 8%
100% 100% 100%
Note: the 2007 and 2008 figures do not include the Eco Technology business

Raw materials are selected in order to reduce as much as possible the use of substances that are harmful to humans and the environment. Accordingly, Pirelli systematically evaluates the environmental and toxicological characteristics of any new chemical before using it in production processes.

The average volume of raw materials used in 2009 for the production of tyres was about 800,000 tonnes, including 4% derived from recycled material.

The following graph illustrates the percentage composition of the mix of raw materials purchased by Pirelli Tyre in 2009. The 2008 figure published in last year’s Sustainability Report is shown aside.

Raw material mix

Percentage composition of the mix of raw materials purchased by Pirelli Tyre

Natural rubber 23%, Synthetic rubber 23%, Chemicals 17 %, Textiles 14%, Steelcord 10% and Carbon black 13% Natural rubber 28%, Synthetic rubber 22%, Chemicals 14%, Textiles 11%, Steelcord 13% and Carbon black 12%