Pirelli Tyre, the world's fifth largest tyre manufacturer, signed a Memorandum of Understanding with Hixih Group (previously the Yinhe Group) on Tuesday to build a new filter plant in Yanzhou Shandong province, the company said in a press release material.

The new factory will be located in the same area with their existing tyre plants jointly established by the two sides. Construction on the new factory is expected to begin in the first quarter of 2010.

Investment on the new filter plant could reach 50 million euros in three years, when it is expected to employ approximately 1200 staff and has a manufacturing capacity of around 100,000 filters per year.

The Pirelli Group has had an industrial presence in China since 2005, when its first factory for truck tyres was built in Yanzhou. By the end of 2007, the Group launched a second factory in the region for manufacturing of high performance car tyres.

The plan for creating a site for production of particulate filters represents the third phase of development for the Pirelli Group in China and a further step in its international consolidation. Today Pirelli counts 23 factories in 12 countries.