Röchling Automotive officially opened its first production facility in Mexico, the company said in a press release early this month. The Germany-based supplier invested EUR5.7 million (USD6.4 million) for the construction of the new facility, which is located in Silao, in the state of Guanajuato. The 9,100-square metre facility is located inside an industrial park in Silao, near to assembly plants operated by several international automakers. The facility currently has 18 employees, a number which is likely to increase sharply in coming years.
“The country [Mexico] is becoming increasingly important in the global automotive market, said Georg Duffner, CEO of the Röchling Group. “Any company that claims to be a global automotive supplier needs to have a presence here in Mexico. And that’s a claim which Röchling Automotive makes,” Duffner said.
Within a few months of the operation, Röchling has already begun considering expanding capacity in Silao. The company is preparing to expand the facility on an adjoining 18,000-square metre plot by the third quarter of this year.
Separately, Röchling Automotive laid a foundation centre for the new technical centre in Worms, Germany, the company said in a press release last month. The company is investing EUR9 million in the new Technical Center Worms, which is scheduled to start operations in 2017. The new technical centre will bring together around 230 employees, who are working at the Worms location on new developments and project management.
Significance: Automotive suppliers are following their customers and setting up new plants in Mexico. Being the seventh largest vehicle producer globally, Mexico is a preferred destination for automakers, thanks to its several bilateral and multi-lateral trade agreements. The low-cost country, as member of the North America Free Trade Agreement (NAFTA), offers hassle-free access to the United States, the world’s second largest automotive market, and Canada. IHS forecasts vehicle production in Mexico to increase from 3.57 million units in 2015 to over five million units by the end of this decade.
Röchling completed Silao facility’s construction and machinery installation within 14 months. The first production line at the facility was tested and approved in March this year. The facility has already started production of active grill shutter for Ford. Apart from Ford, the facility also supplies to Nissan, Volkswagen, BMW, Daimler and GM. The company expects EUR14 million in annual sales from its Silao facility this year, which is projected to reach EUR60 million by 2020.
Röchling is investing in the new technical centre as the company needs space at its Worms location for production and logistics management. From its current location in Worms, the company manages seven plants in Germany, Belgium and the Czech Republic. The new technical centre will serve as the compan'sy R&D location for product innovation and project management. Röchling Automotive employs 650 workers at Worms including 320 in production.
