NEW YORK (Nov. 12, 2010)—Pirelli & C. S.p.A.'s new car and light truck tire plant in Silao, Mexico, will be based on conventional tire building technology and not the company's automated Modular Integrated Robotic System, company executives confirmed recently.
The $210 million plant is scheduled to start production by the first half of 2012 with a daily output of 10,500 tires, according to information presented this week to financial analysts and journalists in New York. That will ramp up over time to more than 14,000 tires, or 6 million a year, by 2015, with as-yet undisclosed additional investment.
Pirelli broke ground on the 1.29 million-sq.-ft. plant recently with Pirelli officials and local dignitaries present. The site, in the Puerto Interior industrial park in Silao, will be prepared to allow Pirelli to double the factory's size when demand warrants it, according to Tom Gravalos, vice president, marketing, motorsports and OE for Pirelli Tire North America Inc.
The plant will have the capacity to build tires with rim diameters up to 26 inches, according to PTNA Chairman and CEO Mauro Pessi, who indicated 70 to 80 percent of the plant's output would be exported to the U.S. and Canada.
Pirelli is projecting annual growth in North America of nearly 10 percent through 2013 to about $725 million from roughly $525 million this year.
Pirelli selected Silao as the site for the plant because the region's good infrastructure, stable local and regional government, qualified labor, access to efficient transportation corridors and Mexico's tariff-free status as part of NAFTA, Pessi said.
“We are a brand on the move and this is the type of support we need to continue reaching our goalsà,” Pessi said.
The plant is about 350 miles from the Texas border, which should allow Pirelli to improve its distribution efficiency to dealers measurably once the plant is on stream, Pessi and Gravalos said. Silao is in the central Mexican state of Guanajuato, about 175 miles northwest of Mexico City and 125 miles east of Guadalajara.
The site is within 75 miles of Continental A.G.'s plant in San Luis Potosi and Group Michelin's in Queretaro. There are many other vehicle component plants and car assembly sites in the area.
The investment in Mexico is part of Pirelli's five-year industrial plan, for which the Italian tire maker is budgeting $2.65 billion toward modernizing its manufacturing capacities globally, with a goal of ensuring 60 percent of equipment is less than 10 years old.