Pirelli to expand Argentine plant 20% by 2013

Tire Business staff report, a Crain Publication

Merlo, Argentina - Pirelli Tyre SpA plans to invest $100 million over the coming two years in its plant in Merlo to boost capacity 20 percent overall and double capacity for the higher value-added SUV and light truck sizes.

The expansion of the 59-year-old plant to 6 million units a year will entail a 25-percent increase in the plant's size to 59 000 m2 and will add 300 jobs by 2013 to the 900 employed there now, Pirelli said in a 20 Oct announcement.

The project coincides with Pirelli's growth projections for Argentina, where sales are expected to grow 55 percent this year to $365 million and another 40 percent by 2013 to $500 million.

Pirelli expects domestic demand will absorb about half of the new capacity with key export markets - including the US - accounting for the rest. The Merlo plant ships tyres to key OE customers throughout Latin America, Pirelli said.

A portion of the investment will go toward installing equipment to raise capacity for a rubber compounding process for “low environmental impact tyres” to half of the plant's output, Pirelli said.

Pirelli disclosed the investment recently at a ceremony at the Merlo factory marking the centennial of Pirelli's doing business in Argentina.

Among the dignitaries present were Argentinian president Cristina Fernández de Kirchner, the governor of Buenos Aires Province Daniel Scioli, Pirelli SpA chairman and CEO Marco Tronchetti Provera, Pirelli Tyre CEO Francesco Gori, Pirelli Pneus America Latina CEO Guillermo Kelly, and Pirelli Neumáticos Argentina CEO Franco Livini.