German automotive industry supplier Boge Rubber & Plastics Group is building its first production plant in Mexico, it said December 13.
The 54,000-square-foot facility in San Luis Potosí, 270 miles northwest of Mexico City, is scheduled to come on stream in mid-2017.
Boge Rubber & Plastics specializes in vibration technology and plastics component production. It created a local subsidiary, Boge Rubber & Plastics México SA de CV, in early 2016. It is investing about 5 million euros ($5.3 million) at the site.
It expects to employ 30 when production begins, and up to 200 in the medium term.
“As a global player we are thus supporting our customers who, for the most part, already have their own production facilities in Mexico or are in the process of creating further [production] capacity,” CEO Torsten Bremer said in a news release.
The company's headquarters are in Damme. It did not specify what components it would manufacture in Mexico. Its initial customers will be German automakers with plants in Mexico along with Tier 1 suppliers. It is seeking business with U.S.-based automakers.
Through November, auto plants in Mexico had assembled 3.2 million light vehicles, 1.5 percent more than in the same period in 2015. Mexico ranks seventh among the world's largest producers of light vehicles.
The Mexican automotive industry has grown at an average of 8 percent a year over the past five years, Boge pointed out. By 2020, experts expect it to assemble 5 million light vehicles annually for local and global markets.
“With its location in Mexico, Boge Rubber & Plastics is closing a gap in its production network and also increasing its attractiveness among customers when it comes to awarding global platforms,” Boge added.
Once the new plant is up and running, the group will have 11 production sites in eight countries on four continents, Boge said. It employs 4,000 and has annual sales of about 740 million euros ($787.2 million).