Optibelt putting down roots in North America

With supply chains still choked from pandemic-driven overpurchasing, manufacturing companies have to maintain proximity to their customers.

And Arntz Optibelt GmbH, a Hoxter, Germany-based industrial belt manufacturing firm, is seizing the moment to build its first manufacturing site in the Americas with a 107,000-square-foot V-belt production site in San Juan del Rio, Mexico, which sits on the central plateau in the Bajio region just north of Mexico City.

The company maintains its Americas sales headquarters in Bartlett, Ill., where Optibelt also does some polyurethane belt fabrication.

"Combined with the strong growth in North and South America — the Americas are the fastest growing markets — the time had arrived to invest in production in Mexico," said Konrad Ummen, managing director and chief operating officer of the new site. "From this point of view, we are very dedicated to our strategic decision to be in market production in Mexico."

Optibelt, one of the largest producers of belting for the power transmission industry in Europe, is investing between $22 million and $27 million in the greenfield project, which is set to come online in the fourth quarter of this year.

The facility initially will employ about 40 people in the production of raw edge-cogged V-belts for the mechanical engineering and agricultural spaces, with "modular growth" planned in the coming years for other types of belts, Ummen said.

Hiring could top out at 400 people in potential expansion phases.

"We came to the point where we could supply the European continent and other areas from our European factories," Ummen said. "But we had to plan for the potential growth in the North and South American markets.

"After Europe, where our roots and our largest markets are, it is America first, of course," Ummen said.

Europe accounts for more than 50 percent of Optibelt's overall turnover.

"The Americas represent the second largest market for us and—by far—the fastest-growing region," he said.

Capacity at the Mexican site "should be about 1 million units per year," Ummen said, though volume is difficult to estimate as the types of belts vary in size and weight. "The belt range is very diversified—we have long belts, heavy belts, lighter belts—but roughly in the first year, around 1 million pieces of belts per year.

"It is our intention to increase this capacity in Mexico," Ummen said.

Optibelt works in EPDM, polyurethane, SBR, chloroprene and many other common types of elastomers to make its belts.

The company controls eight production sites in six countries from its global headquarters in Hoxter and maintains its own logistics and sales centers in Europe, North and South America, as well as in Southeast Asia, Australia and New Zealand.

Worldwide, Optibelt sees approximately $345 million in annual net sales and has more than 2,400 employees.

The company sells direct to OEMs and to a distribution network for its belting products.

Much like Continental AG, another German company with strong ties to belt production in the Americas, Optibelt celebrated 150 years in business recently.

The family-owned company hit the milestone in 2022.

"We are a fifth-generation firm, definitely with the highest concentration in the industrial market," Ummen said. "And we want to maintain that strong strategic position there. Nevertheless, we do share to a certain extent a portion of the automotive market, as our auto shares are pretty evenly split between passenger and heavy truck and bus applications."

Optibelt also works in the pulp and paper, lawn and garden, and material distribution spaces.

"And material handling is becoming more and more important," Ummen said. "We are in many logistics applications."

The company also is seeing strong growth in lawn and garden belting applications.

"Since the 1970s, our company's own sales organization has already positioned itself successfully in the U.S. and the other large markets on the American continent," said Reinhold Muhlbeyer, CEO of the management board at Optibelt. "This greenfield project in Mexico underlines our wish to support and accelerate our growth in the region by manufacturing our product ranges locally."

Seated in his office in the German countryside between Hanover and Duesseldorf, Ummen said Optibelt has ambitious goals in bringing manufacturing to the Americas.

"When it comes to our new production facility, we are pursuing our goal to launch our standard drive belt range, geared particularly to the general mechanical engineering and agricultural machinery segments, in an initial phase in Mexico, despite the prevailing difficulties with supply chains and procurement markets," Ummen said.

The company is buying some equipment for the Mexico site on this side of the Atlantic Ocean, and it will tote other production equipment from European production sites to San Juan del Rio.

"Of course, we are still subject to supply line difficulties across the board," Ummen said. "And we always have to consider the changing political environment and the geopolitical situations across the globe.

"All of this is a strong argument to be closer to additional regional markets."

Ummen added that the company fared well otherwise during the last two years.

"Luckily we were quite happy and successful during the pandemic period—even with difficult supply chains," he said. "We had no breakdown of production in Europe or China. This was due to the performance and support of our teams.

"It is the right time to make an investment in Mexico," Ummen said.