The new Pirelli Labs

Milan, May 3^rd, 2001 - Pirelli Labs, the Group's new basic and advanced research centre, were presented today. With an overall investment of 270 billion Liras - they will specialise in projects in the fields of photonics, optical fibres, superconductivity, new materials and undergrounding. The laboratories will be built in the 'Progetto Bicocca', managed by Pirelli & C. Real Estate, and will cover an overall area of more than 13 thousand square metres.

The Pirelli Labs will provide the reference point for all Pirelli's research activities world-wide. They will be directly linked to all the Group's research centres as well as to leading private and university research centres in the USA, the UK, Russia and Italy, thanks to a series of special agreements and consortia. The new laboratories aim to further strengthen the Group's leadership in the sector of research and development of increasingly advanced technological products and solutions, both in Italy and abroad. With over 12,400 national patents registered, Pirelli is already the leading industrial player in Italy.

"The Pirelli Labs represent the cutting edge of our advanced research", points out Marco Tronchetti Provera, Chairman and Chief Executive Officer of the Pirelli Group. "Through these laboratories, Pirelli aims to become a genuine 'knowledge company', evolving and creating value through the development of new know-how and technologies. Bicocca, once the very heart of the Italian industrial manufacturing system, has today become the hub of this major project, a centre of technological excellence equipped with state-of-the-art laboratories that will play host to the creation and development of new ideas and innovation for the next-generation products that will be born in the medium and log run, in 2 to 10 years. This new structure integrates and completes the large network of Research and Development laboratories of the Group currently operating in the most important countries worldwide".

The building and fitting works for the Pirelli Labs will be completed by November and the new structures will be fully operational by the Spring of 2002. Once fully up and running, the Labs will employ roughly 250 researchers and technicians and will be divided into two sections: Optical Innovation and Materials Innovation. On the optics front, the efforts of the new laboratories will be concentrated on photonics and the development of new optical components based on nano-technologies (see notes attached), as well as on the industrialisation of new super-high performance optical fibres, able to transmit up to 10 Terabits per second over distances far in excess of current limits.

Amongst the advanced research projects to be undertaken by the Pirelli Labs in the photonics field, research into nano-technologies is worthy of particular mention. The creation of structures on a nanometric scale (1 nanometer = 1 millionth of a millimetre) means that it is possible to control the fundamental properties of materials, including optical materials, without changing their chemical composition, thus obtaining so-called photonic crystal devices. The application of nano-structures to optical components will enable Pirelli to fully exploit all the wavelengths currently available in fibre optic cables, thanks to DWDM technology, thus maximising the quantity of data transmitted through a single fibre.

Other applications within the optics field will also be studied at the Pirelli Labs: these will include quantum computing, i.e. the possibility of using the quantum characteristics of light to develop optical computers, based on radically new principles. The laboratories will also carry out research into the transmission of data not only through photons but also through neutrino.

In the energy transmission field, the Pirelli Labs will address in depth the issues related to superconductivity, with innovations in materials and existing technologies. The most technologically advanced solution in this field is the system of cables using HTS - High Temperature Superconductors, created by Pirelli in collaboration with leading international institutions such as the EPRI (Electric Power Research Institute) and the United States Department of Energy. This technology is based on the properties of certain materials which, when cooled below a critical temperature peculiar to each material, are able to carry large amounts of current without any electrical resistance. Pirelli, using HTS materials developed with the American Superconductor Corporation, has recently completed the construction of a three-phase HTS cable system that will be installed within the electricity grid of the city of Detroit. This system is able to carry an alternating 100 Megawatt current at 24,000 volts - 3 times greater than that of a copper cable of the same size. This will be the first installation of a HTS cable within a real power network, where the existing cables will be replaced with their new generation counterparts of similar size but with greater transmission capacity, making use of existing underground ducts. In addition, the Pirelli Labs will undertake advanced research aimed at identifying the characteristics of superconductivity and applications of the charging of hydrogen in palladium and, more generally, of quantum accumulators.

There will also be research projects in the field of distributed generation: in particular there will be research into technologies such as fuel cells, that lend themselves to the direct production of energy at the site of the user, with power levels lower than 20 Megawatts.

Lastly, the Pirelli Labs will carry out in-depth research into 'undergrounding' - the underground laying of aerial electrical lines. In recent years there has been growing pressure to transfer current lines underground, for two main reasons. The first of these relates to the reliability and safety/security of electrical power grids. The second area of concern is the impact on the environment and electro smog (the magnetic fields generated by electrical lines). Pirelli have already patented and prepared a series of leading edge technologies (Compact, Pit-stop, Opto-power,...) designed to reduce the time and costs of undergrounding by more than 60%, while further enhancing reliability. One of the pilasters of these areas of innovation is the exclusive Pirelli patented technology known as AirBag.

Thanks to this technology, electrical cable cores are inside a polymeric stratified structure, capable of being modulated in process, that is particularly resistant also to mechanical threats and which is, in the most advanced version, even able to "repair itself" if damaged. The AirBag technology is also the starting point for the next generation cables and systems, conceived for innovative laying. The first undergrounding projects based on AirBag technology were recently successfully completed in Milan, Rome and Trieste. Even if this technology is in its starting lifecycle, Pirelli forecasts that by the end of 2001, about 1 million metres of AirBag cables will be installed in the most important countries worldwide.

For further information:
Ivan Domp
Pirelli Press Office
Tel. 02 85354249
e-mail: ivan.dompe@pirelli.com