SAN LUIS POTOSI, Mexico—Flexitech Group has opened an automotive brake hose plant in San Luis Potosi that will help ease capacity concerns at a facility in France and serve as its hose construction factory for the Americas.
The firm held a grand opening in late August at the 86,000-sq.-ft. site that will extrude high-pressure brake hose, according to Chris Carmody, Flexitech director of sales for North America. Initial production will be 3 million meters of hose per year, with expansion next year to 6 million and forecast to hit 10 million meters in 2015.
Employment at startup is 80 but is projected to increase to about 140, he said. Investment in the project was not disclosed.
The new auto hose factory was placed in an existing building that Flexitech expanded, and is located just 200 meters from a brake hose assembly plant that the firm opened in San Luis Potosi just three years. That unit employed 30 when it opened but now has a staff of 220 assembling 11 million high-pressure brake hose assemblies a year, Carmody said. It is ISO/TS-16949 certified and recently was awarded General Motors' Supplier Quality Excellence Award for 2013.
Hose production from the new facility also will supply Flexitech's other North American assembly plant in Bloomington, Ill. Initial output will be of Flexitech's global standard hose—the 4010, made of EPDM inner and outer tubes with PVA braid—that is the automotive supplier's largest volume hose. Carmody said at some point the company will add localized hose construction for specialized customer needs.
Flexitech is pleased with the support provided by the San Luis Potosi local government to grow business in the area to support the rising number of automobile makers that have located in the region.
"The government was great to work with," he said. "They do a great job of supporting companies such as ours to get established. To go from opening our doors three years ago to the size of the operations we now have, you can't do that without good support."
The area also is a prime area to export from, he said, because of the free trade agreements that Mexico has with a number of other countries.
Japan's Mitsubishi Corp. is majority owner of Flexitech Group, with Meiji Flow Systems Co. Ltd.—also of Japan—the minority owner.
Flexitech's capital spending in Mexico, along with other investments in Brazil, Romania and China over the past several years has enabled the group to become the top global supplier of automotive hydraulic brake hose, Carmody claimed. Future expansion plans include more spending in Japan and possible additions in the Association of Southeast Asian nations.
Sales in North America are projected at about $75 million this year, with combined revenues there and in Europe pegged at $135 million to $140 million for 2013, he said. If Meiji Flow Systems totals are included, sales this year for the group will be about $250 million.
