CHICAGO Superior Industries International Inc. plans to spend $125 million to $135 million to build an aluminum wheel manufacturing facility in Mexico.
Groundbreaking is expected in the middle of this year, with construction likely to be completed two years later, the Van Nuys, Calif.-based aluminum wheel maker said in remarks released with earnings data March 1.
The facility, whose location has not yet been chosen, will have an initial capacity of between 2 million and 2.5 million wheels per year, said Superior, which currently makes about 12.5 million wheels per year.
"While our operations in Mexico consistently have performed at class-leading levels, it has been evident we are not currently positioned to participate fully in North American market growth," Superior chairman, chief executive officer and president Steven J. Borick said in a statement. "Accordingly ... we have decided to expand our manufacturing footprint."
Superior also plans to make improvements to its existing operations in both the United States and Mexico. Capital expenditures totaled $23 million in 2012, and Superior said it expects to boost investment at its current plants in 2013. "We believe there are great opportunities to improve the companys operating performance," Borick said.
Superiors 2012 net income fell 54 percent to $30.89 million from $67.17 million in 2011 on sales that were virtually even at $821.45 million. Fourth-quarter net income plunged 93.3 percent to $2.69 million from $40.19 million in the same period a year earlier on sales that slid 3.1 percent to $210.02 million.
Superior said the decline was in part due to lower aluminum prices, which it said hurt average selling prices, as well as operational issues at its older facilities, particularly in the United States.
Superior says it is the largest manufacturer of aluminum wheels and light-duty vehicles in North America.