Pirelli has opened its 22nd tire plant worldwide, and its second in the NAFTA region in Silao, Guanajuato Mexico.

Mexico’s President, Felipe Calderón Hinojosa shakes hands with Pirelli Chairman and CEO Marco Tronchetti Provera at the inauguration.

The new $300 million plant is Pirelli’s first in Mexico and will focus on producing tires for the Premium segment, (HP and UHP for cars and SUVs). Output will reach 400,000 pieces by the end of this year, rising to 3.5 million pieces by 2015 and 5.5 million pieces by 2017 when the plant is fully operational.  Pirelli estimates an additional $100 million investment to bring the environmentally sustainable factory fully online by 2017 for a total investment of $400 million.

The Mexico plant features the group’s most advanced technology and production processes adding 1,000 jobs by 2013, (700 direct and 300 external positions with an additional 700 direct and 100 external employees when fully operational for a total of 1,800 jobs).  The new factory has been designed to augment the Rome, Georgia MIRS facility’s output of 400,000 pieces to bring Pirelli’s total NAFTA production in 2015 to 3.9 million tires, rising to 5.9 million in 2017. The Silao, Mexico plant will serve the emerging Mexican market with 30% of the plant’s production and the remaining 70% of production headed to the US and Canadian markets.

“The opening of the new factory in Mexico represents an important step in our international development plan,” said Pirelli Chairman and CEO Marco Tronchetti Provera. “This is a country that offers excellent opportunities both because of the positive dynamic of local demand and its strategic position, making it an ideal industrial base to serve the entire NAFTA area, which we think one of the most promising for the success of our Premium strategy.”

Pirelli will now be able to increase its capacity to satisfy NAFTA area demand through local production, which in 2011 accounted for 6% of the company’s total output, rising to 11% in 2012 and finally 53% in 2015. It will also reduce logistical costs, offer more efficient customer service, lead to lower imports from Brazil and free-up production capacity there which today serves the NAFTA area, allowing Brazilian production to focus on the LATAM area.

In particular, in 2014, 66% of Pirelli’s revenues in the area will come from the Premium segment (30% Medium segment and 4% Standard), a marked increase from 55% (36% Medium and 9% Standard) at the end of 2011.

Keeping in line with the strategy of constant technological innovation at Pirelli’s sites – by 2015 60% of production will come from factories/facilities under 10 years old – and the group’s commitment to sustainability, the new factory in Mexico is, together with the hub at Settimo Torinese, one of the most technologically advanced extant and was built with great attention to the reduction of its environmental impact both in terms of processes and products. In the new plant expected production will entail a great commitment to the production of tires in line with Pirelli’s “green performance” strategy, which is to say tires that combine road performance with the containment of environmental impact in terms of lower rolling resistance – which means lower fuel consumption and noise reduction.

Right from the planning stages, environmental and energy themes were given great attention at the Mexico plant, which led among other things to the creation of a center for the treatment of residual water to optimize consumption. A series of state-of-the-art sensors have also been installed throughout the factory to reduce wastage of water and electrical energy. In order to preserve the environmental balance, Pirelli also transplanted to the area around the factory all the trees that were uprooted for its construction.  This will help Pirelli meet the goals the company has set for itself in the industrial plan which call for a of 70% reduction of water usage by 2015 compared with 2009, and a 15% improvement in specific energy efficiency and the reduction also by 2015 along with specific 15% reduction of CO2 emissions.