MercoPress. South Atlantic News Agency

Pirelli to invest 500m in Argentina factory to recover Mercosur tyre market

The first phase anticipates a production of 700.000 per annum

Facing losing market shares in the Mercosur region, Italy’s Pirelli is to build a new radial truck tyre factory in Argentina involving an investment of 500 million dollars. Construction will begin in 2012, with first-phase capacity on stream in 2014.

The first phase of development is scheduled to give the plant a 700,000 unit per annum production capacity. Second phase development is expected to double the plant’s capacity and increase its workforce from 700 to 1,200 people.

This project is part of Pirelli’s drive to increase its direct industrial presence in fast-growth markets. The company estimates it 2011 revenues in Argentina will reach 500 million dollars, a 40% increase on 2010, and the country is presently attracting significant automotive industry investment.

Pirelli’s truck business unit in South America counts Ford, Scania, Volvo, Man, Iveco, Mercedes and Agrale amongst its clients. At the moment Pirelli satisfies truck sector demand within Argentina with imported tyres and 50% of production from the new facility will go towards meeting the local market demand, with the remainder directed to important exports markets, notably within the Mercosur region.

The plant will be the seventh within Pirelli’s truck business unit; the tyre maker currently operates facilities in Turkey, Italy, Egypt, China and Brazil, where it has two. Pirelli says that, with this plant, Argentina could represent as much as 13% of its global truck tyre production. Product lines manufactured in Argentina will be made using the latest generation SATT technology.

The Argentine government has committed itself to aid the factory project by funding part of the investment at a facilitated interest rate and by guaranteeing the delivery of utilities.