Pirelli Tyre has announced plans to consolidate its already strong position in South America by expanding production at its Buenos Aires, Argentina, factory to 6 million units a year by 2013 with investment of $100 million.
By the end of 2010, Pirelli’s Argentinean sales are expected to grow by 55% to $365 million; the target for 2013 is $500 million. This compares with $235 million in 2009.
Company representatives did not comment on what, if any, effect the expansion plans would have on its existing European production capacity.
Pirelli has operated at the Merlo site since 1951 and currently produces more than five million units annually for its passenger and light truck/SUV ranges. At the moment this accounts for 10% of the group’s total production in Latin America and 20% of car tire production in the area.
The increase in production capacity will specifically result in the doubling of production in the high value SUV and light truck segments, which typify the Argentine auto market, with 50% of future production will be absorbed by “increasing internal market demand.”
The rest will support demand from export markets, principally Brazil and the other South American markets and the U.S. The factory counts the major carmakers Volkswagen, GM, Fiat, Ford, Peugeot and Iveco as clients. Toyota is expected to join the list soon.
The $100 million investment is scheduled to be phased in entirely by 2013, but about $20 million will be spent this year.
The Merlo site’s production area currently covers 48,000 square meters, which, by the end of the period, will grow to 60,000 square meters. Overall, the investment plan will generate 300 new jobs in due course, with a total of 1,200 employees compared with around 1,000 in 2010 and 900 in 2009. (Tyres & Accessories)
