Changing plans for its new North American headquarters, Germany's STS Group AG is investing $32 million to upfit and expand a facility in Salem, Va.
In 2022, the automotive interior and exterior parts supplier announced it would invest $39 million to construct its first U.S. manufacturing facility near Wytheville, Va.
"Due to changing market conditions and rising construction costs for a new building, the company reevaluated the project," the company announced.
"Salem is a perfect base for STS Group to start its footprint in the USA, following existing customers locally and extending the customer portfolio," CEO Alberto Buniato, said in a news release from Virginia Gov. Glenn Youngkin. "On top of a perfect existing location in a suitable industrial cluster, we were delighted to find very attentive and helpful support from the city of Salem, Roanoke Regional Partnership, and Virginia Economic Development Partnership."
Operating as STS Group North America, the facility will supply commercial truck assembly operations by Volvo Trucks in Pulaski County, Va., and other truck and automotive facilities throughout the Midwest and Southeastern U.S. markets, the release said.
The company plans to upgrade about 200,000 square feet of the existing space and construct a 32,000-square-foot addition. The project is expected to create 119 jobs.
Auto acoustics specialist Adler Pelzer Group purchased a majority of STS Group from investment firm Mutares SE & Co. KGaA last year.
Hagen, Germany-based STS Group develops, manufactures and supplies hard trim products made of plastics and composites for the automotive and trucking industries. The company operates 12 plants in four countries, with production facilities in Europe, China, and the Americas.