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Aug 18, 2023

Dayco opens Mexico facility, supplying North America's belting market

ROSEVILLE, Mich.—The North American belting market is seeing near- and on-shoring with its manufacturing, and as a result, Mexico's belting market is booming as the geographic center of it all. In

ROSEVILLE, Mich.—The North American belting market is seeing near- and on-shoring with its manufacturing, and as a result, Mexico's belting market is booming as the geographic center of it all.

In response to this continental demand, Dayco L.L.C. has constructed an $11.4 million, 73,800-sq.-ft. production facility from the ground up in a major industrial park in San Luis Potosi for its poly-v belts.

The facility, with an expected production capacity of about 4.1 million belts per year in 2024, is complete and set to begin production in the first quarter of 2024, according to Dayco officials.

Dayco expects capacity to increase each year in San Lui Potosi's Parque Tres Naciones, a well-known industrial park in the city in central Mexico.

Tom Tecklenberg

"This investment is part of Dayco's targeted growth strategy to enable better service to our North America customers through this new San Luis Potosi facility," Tom Tecklenburg, vice president of North American aftermarket for Dayco, told Rubber News. "It was strategically selected to provide shorter lead times while maintaining Dayco's high-quality standards at a competitive cost. The SLP facility will be serving the automotive poly-v market segment during the initial launch.

"Dayco is continuing to review investments to expand into other market segments."

Dayco announced in late 2022 this "significant" multi-million dollar investment in a new belts facility in the industrial park that is popular with prominent businesses.

"This is an exciting strategic investment that allows Dayco to expand its presence in North America and its overall global footprint," Tecklenburg said. "As a result, Dayco will be even better placed to serve its valued customers and provide them with quality products at the right value.

"The Dayco team is thankful for the local authorities of San Luis Potosi for facilitating the resources in support of our investment."

Production is estimated to start in January 2024 with serpentine (poly-v) belts primarily for aftermarket customers in the U.S., Mexico and Canada. Poly-v belts typically find application in light and heavy duty original equipment.

The company also specializes in timing belts, pulleys and idlers, drive tensioners, dampers, friction wheels and decouplers for both the light and heavy duty conveyance markets.

Dayco added it will leverage its global team and "best-in-class" facility management to prepare the San Luis Potosi facility for production.

The newest Dayco plant boasts completely new "state-of-the art" equipment, Tecklenburg said, and "there will be extra amenities" for Dayco employees. Tecklenburg did not elaborate on those amenities.

"Dayco continues to look at other investment opportunities to help the company better serve its customers," he said.

Dayco executives see a number of benefits to having a facility in Mexico, including shortened supply lines and a quicker turnaround time on orders.

"Mexico's economy is booming due to the trending 'nearshoring' economic dynamic," Tecklenburg said. "Labor cost is very competitive, and quality meets or exceeds OE and aftermarket requirements.

"The geographic location is ideal to supply North America."

In addition, Mexico has free trade agreements with North America via the U.S. Mexico-Canada Agreement; South America via MERCOSUR; and Europe and Asia.

"This is an exciting strategic investment that allows us to expand Dayco's presence in North America and subsequently, the company's overall global footprint," John Kinnick, president of Dayco's Global Belt Division, said in a statement to Rubber News late last year. "As a result, we will be even better placed to serve our valued customers and provide them with quality products at the right value."

Founded in 1905, Dayco is a manufacturer of engine product and drive systems for the automotive, heavy duty, truck, construction, agriculture and industrial segments, servicing both OE and aftermarket accounts.

On Sept. 30, 2022, the firm formerly known as Mark IV was purchased by Boca Raton, Fla.-based private equity firm Hidden Harbor Capital Partners.

"This is an important milestone for our business, and we are excited as we enter our next phase of growth with our new partners at Hidden Harbor," Dayco CEO Joel Wiegert said when the deal was first announced in August 2022. "We look forward to teaming up with our new partners at Hidden Harbor and drawing upon the expertise of their operating partners to build on Dayco's success.

"Our partnership with Hidden Harbor will enable Dayco to have greater flexibility to deliver for our customers, supply chain partners and employees, and move forward together toward a successful future."

Terms of the transaction were not disclosed.

Dayco, with annual net sales of about $990 million, employs more than 3,600 people at 40 locations in 22 countries. The firm said its ability to transfer power quietly and efficiently has helped it become a solutions provider for hybrid electric vehicles.

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