Wind powered Sentury Spain tyre factory on-track

How green energy is making business sense for Sentury Tire

At the end of 2021, Sentury Tire announced that it is planning to build a half-a-billion-euro tyre factory in the Galicia region of Spain. 10 months down the line, is the Sentury Spain factory still going ahead as planned? The short answer is yes and the project is designed to be powered by wind energy. Tyres & Accessories spoke to Warren Rudman, general manager Sentury Tire (Spain) S.L. in order to find out more.

The latest news is that Spanish energy giant Endesa has reached an agreement with Sentury whereby Endesa will invest 229 million euros in energy facilities to supply the tyre factory. When news of the Sentury’s investment broke at the end of 2021, the price tag associated with the new tyre factory was 523 million euros. Now, Endesa’s statement refers to a 477-million-euro investment on the part of Sentury. Either way, the announcement is another indication that Sentury’s tyre factory is moving forward and that it will use renewable energy.

Talking to T&A, Warren Rudman explained that, while ground hasn’t yet been broken and construction work has not yet begun, the project is going ahead as planned: “There have been some small delays, but nothing significant.”

Indeed, during the time since the initial investment announcement was made, Sentury established a new company in Spain which is fully operational called Sentury Tire Spain. The required land has been purchased and all contracts relating to the purchase of the related 26 hectares of land have been purchased from Endesa in AS Pontes, Galicia. In addition, all the necessary documentation related to the Spanish factory project has been submitted to local authorities for approval.

“We anticipate that this project will be declared a strategic project in Spain and we should have approval in the first week of October”, Rudman explained.

Green tyre production

While the whole tyre industry has been affected by the unusual set of circumstances associated with the pandemic, chip shortages, until-recently high shipping costs and latterly the war in Ukraine, these don’t work against the construction of the Spanish factory, according to Rudman: “I think the war is affecting everybody in the tyre industry. For Sentury, we have an advantage moving forward relating to energy”.

As well as signing the aforementioned power purchase agreement with Endesa to supply renewable energy for this facility, a number of other points, make the Sentury Spain project a particularly eco-focused factory. For example, Sentury has also signed a letter of cooperation with Reganosa for the supply of green Hydrogen. This will enable Sentury to run its boilers on hydrogen in order for the factory to operate with CO2 neutrality for the production of steam.

“Our goal is to run this facility on renewable energy”, Rudman explained, offering what, to many, might sound like a lofty goal. However, the details explain the rationale. Endesa is the biggest energy producer in Spain. Sentury bought the land from Endesa and the two companies are working together to make the tyre factory a reality. Endesa will construct six wind farms in the area of As Pontes. Three of these wind farms are dedicated to supplying renewable energy for this facility.

“This is unique and I don’t think any other tyre facility has that”, Rudman further commented, highlighting the pioneering approach to European tyre factory construction.

Electricity consumed by Sentury’s Spanish tyre factory will come from several wind farms in the area such as the pictured control centre of the nearby Leboreiro wind farm (Photo: Endesa)

Meanwhile, Reganosa which is also a supplier of energy and liquified natural gas (LNG) in Spain is busy constructing a hydrogen plant three kilometres from the Sentry site. As we have seen, Reganosa will supply hydrogen for the boilers. Such is the relationship between the two companies, they are negotiating a fixed price for hydrogen supply. And since “we don’t rely on any LNG”, the result is that Sentury’s operational energy cost for energy will be fixed. Currently most tyre producers are facing difficulties with energy as the cost has spiralled out of control as a result of the Russia-Ukraine war.

“How long this situation will continue is unknown so there is uncertainty for tire producers. My goal is to eliminate all the risk and secure stability for Sentury Tire production. This will also put Sentury in and unique position to try and reach CO2 neutrality for the production process (across electricity and steam)”, Rudman further explained.

On the subject of shipping costs, Rudman points out that the new Sentury factory will be 32 kilometres from the port of Ferrol, “which has sufficient container capacity to handle all our requirements,” adding: “We are working closely with Yilport and shipping lines to ensure that we will have logistics in place for this project when production starts.”

In addition to all the other points, Sentury has contracted Ayesa to design the factory and the project is described as “already in an advanced stage of design”, Rudman explained, adding: “We expect construction to start in 2023. This will depend on when we get the construction permit. Local authorities have been very supportive of the project and speeding up all the procedures.”

In other words, Sentury Tire executives hope the company’s strategy of focuses on sustainable energy puts the wind in the sales of the whole business.