Pirelli boosts investment at Mexican plant

ERJ staff report (TB)

Silao, Mexico - Pirelli Tyre SpA has inaugurated production at its car and light truck tyre plant in Silao and is nearly doubling the investment in the plant to $400 million by 2017.

The 1.45 million-sq.-ft. plant, under construction since November 2010, will focus on premium segment tyres, Pirelli said, including high- and ultra-high-performance tyres for cars and SUVs for the domestic and U.S./Canada markets.

The plant is expected to produce 400,000 tyres this year and hit 3.5 million units a year by 2015. When fully operational in 2017, production is expected to be 5.5 million units annually, with about 70 percent of the output destined for the U.S. and Canada.

Pirelli inaugurated the factory today with Mexican President Felipe Calderón Hinojosa and Pirelli Chairman and CEO Marco Tronchetti Provera presiding, along with other dignitaries, invited guests and international media in attendance.

Tronchetti Provera said opening the new factory “represents an important step in our international development plan. This is a country that offers excellent opportunities both because of the positive dynamic of local demand and its strategic position, making it an ideal industrial base to serve the entire NAFTA area, which we think one of the most promising for the success of our premium strategy.”

The new plant, equipped with the group's most advanced conventional technology and production processes, will create about 1,000 new jobs by 2013 - 700 direct positions with the group and 300 external positions. When fully operational, the plant will require a further 700 direct employees and 100 indirect.

Pirelli said the Silao plant will raise the locally produced share of product for the NAFTA market to 53 percent by 2015, vs. 6 percent last year. The plant also will allow Pirelli to reducte its logistical costs, offer more efficient customer service and reduce shipments from Brazil to NAFTA, thus freeing-up production capacity there to serve Latin American markets.

Pirelli sees demand for car tyres within NAFTA growing 2.1 percent annually through 2015 to 361 million units. Within this sector, Pirelli expects 6-percent growth for premium products, which should make up nearly two-thirds of the firm's revenue in the region by 2014.

Pirelli projects its sales in NAFTA will grow about 7 percent annually, hitting nearly $900 million by 2014.

Pirelli said the new plant was built with “great attention to the reduction of its environmental impact both in terms of processes and products” and tyres produced there will be in line with Pirelli's “green performance” strategy - i.e., tyres that combine road performance with reduced rolling resistance and lower and noise reduction.

The plant incorporates a number of environmentally sensitive features, such as a centre for the treatment of residual water to optimise consumption and state-of-the-art sensors designed to help reduce wasting water and electrical energy.

In addition, Pirelli transplanted all the trees uprooted for the factory's construction to areas around the factory

From Tire Business (A Crain publication)

Press release from Pirelli