To align with the Group’s “Local For Local” strategy, Impro Precision began to construct a new North America production base in San Luis Potosi, Mexico (the “Impro Mexico SLP Campus”) on our owned land since August 2019, with the objective to better serve the needs of end-markets for automotive, engineering and agricultural equipment, high horsepower engines, hydraulic systems and aerospace in North America. The total investment for the phase one development was over US$100 million, of which the total estimated capital expenditure for this year, including plant construction, machinery and equipment, may reach US$56 million (approximately HK$440 million).
As of September 2020, the two core business segments of the Group, including the Precision Machining Plant and the Sand Casting Plant are targeted for completion in phase by end of 2020 and 1Q 2021, and be in production by 1Q 2020 and 2Q 2021 respectively. The infrastructure works of Investment Casting Plant is also commencing steadily, which is targeted for completion by mid-2021 and be in production by 4Q 2021. Meanwhile, we have commenced a preliminary design for the Aerospace Components Plant and Surface Treatment Plant, the construction may commence in 4Q 2020 and be in production by early 2022. Upon the completion and at full capacity, Mexico phase one plants could generate approximately US$150 million revenue per annum.