Italian tire manufacturer Pirelli intends to invest as much as $500 million in the construction of a new factory in Argentina, according to company and government officials. Pirelli will spend $300 million through 2014 to erect the radial truck tire plant, with an additional $200 million reserved for increasing capacity in case market situations are positive, a company spokesperson disclosed.
The investment in Latin America's No. 3 market was a part of an industrial strategy revealed by the company late last year, the spokesman said. However, the venture was presented to government authorities on Thursday.
The action to increase production in Argentina is part of Pirelli's strategy to grow into fast-emerging markets. The company, which currently has a facility near Buenos Aires, is forecasting a 40 percent increase in its revenues in Argentina to $500 million this year.
Initially, the new radial truck tire plant would generate 700,000 units per year, with the second stage potentially rising to 1.4 million units. Pirelli stands No.89 on the Automotive News Europe list of the most notable 100 international suppliers with global original-equipment automotive components sales of $1.3 billion in 2010.