MERLO, Argentina (Oct. 22, 2010)—Pirelli Tyre S.p.A. is investing $100 million over the coming two years in its plant in Merlo to boost capacity 20 percent overall and double capacity for the higher value-added SUV and light truck sizes.
The expansion of the 59-year-old plant to 6 million units a year will entail a 25-percent increase in the plant's size to 645,000 square feet and will add 300 jobs by 2013 to the 900 employed there now, Pirelli said.
The project coincides with Pirelli's growth projections for Argentina, where sales are expected to grow 55 percent this year to $365 million and another 40 percent by 2013 to $500 million.
Pirelli expects domestic demand will absorb about half of the new capacity, with primary export markets—including the U.S.—accounting for the rest. The Merlo plant ships tires to key OE customers throughout Latin America, Pirelli said.
A portion of the investment will go toward installing equipment to raise capacity for a rubber compounding process for “low environmental impact tires” to half of the plant's output, Pirelli said.
The investment in Argentina is in addition to $300 million Pirelli has committed to upgrading and expanding its factories in Brazil.
Latin America accounted for about a third of Pirelli Tyre's global sales last year, or $1.9 billion, and nearly 40 percent of its employees. Pirelli also has a plant in Venezuela.
Pirelli disclosed the investment recently at a ceremony at the Merlo factory marking the centennial of Pirelli's doing business in Argentina.