Official opening for Pirelli’s Mexico plant

Yesterday Pirelli inaugurated its new factory in Mexico, the company’s first facility in the country and 22nd worldwide. The plant will mainly focus on producing performance tyres for the premium passenger car and 4×4 segment, and capacity by the end of 2012 is expected to be 400,000 units, rising to 3.5 million by the time the plant’s first development phase ends in 2015. When fully operational in 2017, production is expected to reach 5.5 million units. Phase one work involves an investment of approximately US$300 million, and a further $100 million will be spent between 2015 and 2017. The plant’s workforce will reach the 1,000 mark next year and rise to 1,800 when full operational status is reached.

Dignitaries present at the opening of the 135,000 square metre plant included Mexico’s President, Felipe Calderón Hinojosa, Guanajuato state governor, Héctor López Santillana and the country’s minister for the Economy, Bruno Ferrari. Pirelli chairman and CEO, Marco Tronchetti Provera, also attended.

“The opening of the new factory in Mexico represents an important step in our international development plan,” stated Tronchetti Provera. “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.”

NAFTA to be more than 50% self-reliant

In line with Pirelli’s strategic focus on the premium segment, in which the group aims to achieve world leadership in 2015, the production from the new plant in Silao, Mexico will be mainly high-end and very high-end (car and SUV) and will serve the entire NAFTA area: 30 per cent of production, in line with Pirelli’s local for local strategy, will serve growing Mexican demand, while the remaining 70 per cent will go to the USA market and, to a lesser extent, Canada. The new factory will augment the other facility the group has in the NAFTA area, its Rome plant in the US state of Georgia, which uses MIRS technology in its production and which has an annual output of 400,000 units. Combined, Pirelli’s total production in the region in 2015 will be 3.9 million tyres, rising to 5.9 million in 2017. This will, says Pirelli, result in a decided strengthening of the group in this geographic area: Thanks to the new factory, Pirelli says it will be able to increase its capacity to satisfy NAFTA area demand; while in 2011 only six per cent of demand was supplied from local production, this proportion is expected to rise to 11 per cent this year and 53 per cent in 2015. The tyre maker also anticipates the plant’s opening will bring reduced logistical costs, more efficient customer service and lower imports from Brazil. As a result of this last point, production capacity in Brazil that currently serves the NAFTA area will be freed-up to serve the Latam region.

Within the NAFTA area, Pirelli estimates the passenger car tyre market will grow by an average of 2.1 per cent a year to 361 million pieces by the end of 2015, while the premium segment is tipped to grow at an average annual rate of six per cent. As indicated in its industrial plan, Pirelli’s revenues in the region will amount to around 710 million euros in 2014, with an average annual growth rate of 7.1 per cent from 2011; it should equal over nine per cent of total revenues at the end of 2014. At this time, 66 per cent of Pirelli’s revenues in the region will come from the premium segment (30 per cent medium segment and four per cent standard), a marked increase from 55 per cent premium (36 per cent medium and nine per cent standard) at the end of 2011.

By 2015, 60 per cent of Pirelli’s total production will come from facilities that are less than ten years old. The tyre maker says the new factory in Mexico is, together with its Settimo Torinese plant, one of Pirelli’s most technologically advanced; it says the plant was built with great attention to reducing its environmental impact, both in terms of processes and products. The facility contains a residual water treating plant to optimise water consumption, while a series of state-of-the-art sensors have also been installed throughout the factory to minimise the wastage of water and electricity.

Inter Campus Pirelli Silao

The inauguration of the Silao factory coincides with the start of the “Inter Campus Pirelli Silao” project. The F.C. Internazionale project, with the support of Pirelli, offers local children a meeting point where they can play sports, in particular football. In the first two years, the “Inter Campus Pirelli Silao” program will benefit children in the “Casa Hangar Peter Pan” Foundation (about 65 have already participated in the preliminary phase of the project), as well as around 150 children of Silao plant employees. In the first two years, the aim is to involve 200 children and train five local educators to manage the activities using the Inter campus methods.