Pirelli to build $300m - $500m truck tyre plant in Argentina

Pirelli to build $300m - $500m truck tyre plant in Argentina

14 October 2011

Buenos Aires, Argentina -- Facing losing market shares in the Mercosur region, Pirelli is to build a new radial truck tyre factory in Argentina. Connstruction will begin in 2012, with first-phase capacity on stream in 2014. THis first-phase project is worth some US$300 million.

This investment is part of the total foreseen for the industrial segment as announced to the market last year with the presentation of the industrial plan. A second phase would require additional investment of about 200 million dollars.

The first investment phase aims to deliver an annual production capacity of 700,000 pieces and employ about 700 people. The second phase would enable the plant to reach a potential production capacity of 1.4 million pieces, at full operation, and employ about 1,200 people.

Pirelli said in a 13 October press release, "The planned strengthening of Pirelli’s position in the country could bring Argentina to represent 13 percent of the Pirelli group’s total truck tyre production. The investment will not only allow us to satisfy growing internal market demand, which will absorb 50 percent of production, but also that of the important export markets like other markets of the Mercosur area." In 2011, Pirelli estimates that its revenues in Argentina will reach 500 million dollars, an increase of 40 percent from 2010.

Output from the new site, would be in addition to the 5 million pieces already produced annually for the entire car, Suv and light truck range at the Merlo factory, in the province of Buenos Aires, where Pirelli has operated since 1951 and where production capacity is already being increased. Last year, Pirelli announced a 100 million dollar investment to increase capacity in the SUV and Light Truck segments in Merlo. Merlo’s output today represents, as said earlier, 10 percent of total production in South America and 20 percent of car tyre production in the area.

Pirelli’s Truck Business Unit has six plants, located in Turkey, Italy, Egypt, China and Brazil, where there are two. All the division’s factories utilize the group’s most modern production technology and draw on Research and Development carried out in Izmit, Santo Andrè (Brazil), Yanzhou (China) and Milan, which ensure that the tyre design is in line with the specific needs of different markets.