Breaking it down: 4 numbers behind ContiTech's massive Mexico hose plant

AGUASCALIENTES, Mexico—ContiTech's hydraulic hose factory in Mexico is taking shape. The business group of Continental A.G. broke ground on the project and celebrated its start with a January ceremony.

The plant, first announced in 2022, should begin production in the second half of 2025.

"Strengthening our industry business in the Americas region is a focus for us," said Philip Nelles, a member of Hanover, Germany-based Continental's Executive Board with responsibility for ContiTech. "This investment is our answer to the demand and growth of the hydraulic hose market in the region and underlines our strategic approach to become the innovation leader and full range supplier for hydraulic hoses."

Here's a "by the numbers" look at the ContiTech project.

The planned investment for the hydraulics hose factory in the Mexican state of Aguascalientes is about $90 million, which ContiTech said will be one of the largest for its business during 2024.

The price tag is more than double the $40 million ContiTech estimated it would spend on the hose plant when it first disclosed plans for the project 18 months ago.

"The new plant will allow us to further expand our hydraulics business with an extended portfolio of hoses for diverse key industries like agriculture, mining, construction, manufacturing and energy," Nelles said.

While Continental has a long history in hydraulic hose, its manufacturing footprint for the products was relatively small in North America. The Goodyear Engineered Products business—known as Veyance Technologies at the time Continental purchased it—historically had been a leader in industrial hose, but was relatively new in the hydraulics side of the business.

ContiTech officials in 2022 acknowledged the firm wasn't a top five player globally in hydraulic hose. Still, the business was bringing double digit growth, a sign that new capacity was needed.

"The hydraulic market is the largest hose and fittings market segment in our region," said Andreas Gerstenberger, head of ContiTech's Industrial Solutions Americas unit. "We have been in the hydraulic hose business for over half a century.

"With our new plant in Mexico, we will double our capacity in this field and address current and new customers in multiple industries, embracing our 'in the region, for the region' approach."

Given that soccer is the top sport in both Germany and Mexico, it's not surprising that Conti would note that the footprint of the facility will represent approximately the size of 12 soccer fields.

In traditional terms, the plant will tick in at right around 915,000 square feet, which will be ContiTech's largest location in Mexico. And it could be even bigger.

"With its state-of-the-art infrastructure, including solar panels, process water reuse technologies, SmartFactory tools as well as machinery with high automation and optimal energy utilization, our new plant is perfectly prepared for additional expansion activities in the future," Gerstenberger said.

Construction is expected to begin the second half of this year, with operations commencing in the second half of 2025.

Continental said the hydraulics hose facility will complement and increase the firm's manufacturing capabilities within the region and will create 200 jobs in its first stage.

Besides overseeing the groundbreaking in Aguascalientes, Nelles also visited ContiTech operations in San Luis Potosi, Chihuahua and Delicias, where he toured the shop floors and exchanged ideas with team members.

"Our Mexican operations are key to the success for our Americas business," Nelles said in a LinkedIn posting. "With a truly diverse and robust manufacturing network close to our customers, we at Continental Industry are committed to this region.

"... A very special moment during this tour was the celebration of the 25th anniversary of our Chihuahua plant. This milestone isn't just about years, it's a testament to the quality and commitment of the Mexican people to our company."

The new hose site will be Conti's 22nd plant in Mexico and the second in Aguascalientes. The firm's operations in the country produce automotive components, rubber products and tires, filling both domestic and export needs. The German firm said it employs more than 23,000 people in the country.