Viva Mexico! Springboard to America

KSPG has pooled its Mexico business at Celaya.

For a long time Celaya was known only to connoisseurs of the international food industry. With its excellent climate, the region around Mexico’s third-largest city, located in the state of Guanajuato, has always been a favored location for food producers. But for some years now, the Celaya region has increasingly become a magnet for international automotive manufacturers, from not only the neighboring USA but also Japan and Germany.

And following in the footsteps of the automotive manufacturers, more and more suppliers are establishing new sites here, too. KSPG, for example, has pooled key production activities for the North American market in a new plant in Celaya, a site that it has expanded successively throughout 2012 and 2013. Most recently, in 2013, the Group won a series of major orders from US vehicle manufacturers. Worth more than € 400 million, these orders will enter the production phase in Celaya from 2015.

One feature that makes Mexico so attractive for the automotive industry is its geographical location in the middle of the continent of the two Americas. Above all, as a member of the North American Free Trade Agreement (NAFTA), Mexico enjoys excellent export opportunities with its northern neighbor. The market research company IHS Global Insight estimates that by 2020 around 4.1 million vehicles will be manufactured in Mexico. In 2013, this figure was just 3 million.

KSPG has enjoyed a presence in this strategically important, centrally located country since 2006 and, in Celaya – a city with a population of 340,000 – has pooled a number of different activities, for example the production of pistons and plain bearings as well as oil and vacuum pumps from Pierburg Pump Technology. The story of KSPG in Mexico begins with a takeover. In 2006, KS Kolbenschmidt acquired the OEM business of the Mexican company Pistones Moresa in Celaya, a long-standing company that since 1956 has been producing gasoline and diesel pistons for manufacturers of passenger cars and commercial vehicles. The aim of the newly established KS de México was to expand its piston business in the NAFTA region. Prior to this, the KSPG Group had supplied the Mexican market for pistons via a subsidiary of KS Kolbenschmidt headquartered in Nova Odessa, Brazil. KSPG now has more than 700 highly skilled employees in its piston business in Celaya and is continuing to take on employees in response to the excellent order situation. Its main customers are General Motors, Ford and Nissan.

Pierburg Pump Technology arrived in Mexico in 2007, initially opening production facilities in Chihuahua in the north of the country. These facilities were later relocated to the joint site in Celaya. And, in newly constructed facilities on this site, KSPG has since January 2012 also been producing plain bearings destined primarily for the North and South American markets. Previously, the subsidiary KS Gleitlager had manufactured these products in Brazil and the USA.

The importance of this site, with its currently 765-strong workforce, will grow rapidly over the next few years, particularly for the North American market. In fact, this growth has already started: In summer 2013, a number of US automotive manufacturers awarded KSPG a series of major orders worth more than € 400 million for mechatronic components designed to cut consumption and emissions. One product enjoying particularly high demand is a new generation of pumps, which will enter production at the start of 2015.

KS Gleitlager is also expecting strong growth at the Celaya site. The plain bearings manufactured here are used in, for example, transmission systems, shock absorbers and door hinges. Most of the customers are from the automotive industry – General Motors, Chrysler and Volkswagen among them, but also a number of supplier companies. The products are shipped primarily to North and South America, although a small amount is exported to Europe where they are installed, for example, in Volvo trucks. As you can see, these Mexican-made products are finding their way not only to the USA but also to the “Old World.”

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